Thursday, March 02, 2017

Who Pays For Projects?: Son Dureta

Palma's mayor-in-waiting, Antoni Noguera, recently made a presentation of what is to become the city's "urban forest". It was quite an impressive presentation, replete with large drawings of what the forest will look like. A media gaggle was all agog listening to Noguera extolling its virtues.

It is an ambitious and laudable project, but there is a snag. More than one in fact. The town hall doesn't own all the land for the forest, such as that occupied by the old El Tirador velodrome. No problem, the town hall will buy it. The cost could be as much as nine million euros.

Has this been budgeted for? Perhaps so. But if one goes back almost a year when the forest was first being talked up, half a million euros had been set aside in the 2016 budget for starting work on the project (which didn't happen) and which included some "rehabilitation" of El Tirador.

There is much publicity ballyhoo for projects at the end of which the odd caveat is sneaked in. Paying for a project will require, variously, European funding, tourist tax revenue funding, Madrid's largesse or - specifically in Palma's case - funding via the law for capital cities, which is provided by the regional government. Palma, thanks in no small part to the fact that President Armengol and the mayor (the current one) don't see eye-to-eye (or this at least is how it seems), has not received anything like what it should have from this funding source.

Still, it is always possible that financing for the forest will be in place. But the forest's presentation was an example of the way in which projects - typically grand schemes as this one will be - are announced with a blaze of glory without the funding i's having been dotted and t's crossed. Consequently, there is either a significant amount of wishful thinking that funding will be available or the project is being announced in the half (or more) expectation that it will fail. Not because the promoter of the project - Palma town hall in the case of the forest - will have failed, but because some other body has not come up with the cash. Political capital can thus be made, e.g. the government isn't being fair with the city's citizens by not forwarding the law for capital cities' investment or by not allocating tourist tax revenue. Alternatively, and more often than not, it will all be Madrid's fault.

Which brings us to the project to redevelop Son Dureta Hospital. With an estimated budget of 120 million euros, it would rank as one of the government's stellar projects, if not its most stellar - a five-star project for attending, justifiably, to the needs of an aging population.

Ever since it closed and Son Espases opened, Son Dureta has been a monument to a total absence of strategic thinking. There was never any plan or any idea as to what to do with it. Therefore, it has been a multiple edifice in search of a project, one that the current government has now alighted upon.

The first announcement regarding its redevelopment was made only a few weeks ago. The other day, the massed ranks of Armengol, Barceló, Santiago (social services) and Gómez (health) were paraded before the media to make another announcement, one which only added flesh to the previous by stating how many places it will have. Otherwise, why were they making the second announcement? Well, given the stellar nature of the project we can probably expect regular bulletins, but underneath all this is there a different agenda?

The point is that, like El Tirador and Palma, the government doesn't actually own the hospital; it is ultimately the property of the national government. While Madrid is unlikely to object to the redevelopment, there is the separate issue as to who is going to pay for it.

In principle, the regional government will pay, and President Armengol said as much earlier this week. But there are currently only one million euros in the 2017 budget for the project, which presumably are destined for preliminary work, such as drawing up the plans, given that any actual demolition or building won't occur until the end of next year at the earliest. It was what Armengol then also said that makes one wonder. She made another demand for improved financing by Madrid for public service infrastructure such as Son Dureta.

By being somewhat vague as to how it will pay for the redevelopment, the Armengol government appears to be leaving the door open to blame Madrid if there are any hitches. The health service budget, insufficient as it is, cannot be touched, so there has to be an investment fund source, and that it is something which Madrid have shown themselves to be reluctant to part with. Is there a half expectation of failure? If so, it won't be the regional government's fault.

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