Going To Waste

Between the two town halls of Alcúdia and Sa Pobla, the company Tirme, which provides rubbish-treatment services on Mallorca, is owed in the region of 4.6 million euros. The amount is divided roughly evenly between the two administrations, a difference lying with how much interest they both owe (Alcúdia more than Sa Pobla).

This is not the first time that Tirme has gone in pursuit of outstanding debts from town halls. At the end of May, Inca got a demand for not far off two million. Just one strange aspect of the non-payments is that they relate to the period from 2008, in the case of Alcúdia, and from 2009 where Sa Pobla is concerned. How many other town halls are similarly in debt to Tirme? And if there are others, but even if not, how does a company operate when it is not being paid such vast sums?

Alcúdia and Sa Pobla are both negotiating payment terms, and the respective administrations are of course blaming the previous administrations. Which seems fair enough, but, just as one wonders how Tirme copes with not being paid, one wonders how it is that town halls can apparently just not bother paying. Sa Pobla is also in for about 1.35 million to three other service providers, including the rubbish collectors.

One gets the impression that the whole business world in Mallorca - that which has anything to do with the town halls or other public bodies - is surviving on the promise that they might one day actually get paid. But promises don't amount to a great deal and they certainly don't amount to cash flow or reassurances to lenders, if they are applicable.

Tirme, though, isn't quite like other businesses. Most would find 4.6 million plus the couple of million from Inca and whatever else might be outstanding rather too much debt to bear. Tirme doesn't. Or doesn't appear to. This may be because of who owns it - Endesa, Iberdrola, Urbaser and FCC. Tirme is also a monopoly, and its concession for waste treatment lasts until 2041.

Tirme's monopoly position is understandable in that its operations do demand heavy investment, so it has every right to be able to expect to have a period in which it can make a return on its investment. But not everyone is happy with this monopoly nor with how Tirme prioritises its investment and its operations.

A key part of Tirme's remit is recycling. Mention the R word and you can be sure that one organisation will prick its ears up: GOB, the environmental pressure group. In August, GOB issued a statement attacking Tirme for what it claimed was the company's concentration on incineration as opposed to recycling. GOB maintained that recycling plants were operating well below capacity, while the ovens were going full pelt in optimising as swiftly as possible the investment on incinerators at the Son Reus plant in Palma. Moreover, reckoned GOB, the incineration was allowing for the generation of electricity that was being commercialised.

GOB has accused Tirme of engaging in misleading marketing where its operations are concerned and has accused the Council of Mallorca, which, and truly bizarrely, has managed to extract a reduction in the cost of waste treatment for 2012 of slightly less than two centimos, of complicity.

But then, the story of waste management and treatment is far from straightforward; you wouldn't expect it to be, because nothing ever is in Mallorca.

In January this year, the anti-corruption prosecutors embarked upon the so-called "Operación Cloaca". This had to with allegations of false accounting centred on waste management operations sanctioned by the Council of Mallorca. Of those detained at the time, and I would make it perfectly clear that Tirme was not implicated in the Cloaca investigation, was an executive with FCC-Lumsa, one of the companies with a concession for recycling collection; FCC, which is a shareholder in Tirme.

Cloaca highlighted the dual system of waste collection (door to door as well as from green points) which had resulted in effect in payment for recycling doubling. Cloaca also revealed that town halls had been pressurised by an individual at the Council of Mallorca into adopting this dual system.

What Cloaca also highlighted was the sheer complexity of arrangements for waste management on Mallorca. Perhaps town halls simply don't understand what it is they are meant to be paying for. Now, though, Alcúdia and Sa Pobla accept that they have to pay Tirme. But you wonder how many other town halls owe the company and whether the reason for non-payment has been more than just an inability to pay.


Any comments to andrew@thealcudiaguide.com please.