PAYING off its debt of 14 million euros to its suppliers is going to prove expensive to Denia.
The adjustment plan approved by the local government means that the debt will attract 5% interest.
The council has an outstanding debt of €28.4 million, but will rise to nearly €39 million including interest over the next 10 years.
And a decade from now, Denia will still will owe banks €16.6 million. What is worse, in those ten years, it will have reportedly paid in loan repayments and interest 55.2 million.
Despite central government legislation covering the maximum period local authorities have to pay invoices delivered from their suppliers – 60 days – Denia does not plan to adhere to the law throughout the next ten years.
While in 2011 the average payment period was 132 days, this year is estimated at 93, the next year, one hundred days, and by 2022, when the adjustment plan ceases to be valid, the council will still take 93 days on average in coping with its bills.
By Paul Deed