White elephants leave a financial black hole

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© Gabri Solera
STUDIOS: Backlot at Ciudad de la Luz, Alicante.

THE Generalitat has debts of €41.708 billion and a sell-off of all its assets would leave €20 billion unpaid. 

“It would seem, unless there is proof to the contrary, that the Generalitat’s activities will continue indefinitely,” said the reassuring Sindic de Comptes, the official body that audits and controls the region’s accounts.

The regional government which took over the Generalitat following the May 2015 elections has inherited the aftermath of overspending during the pre-2008 boom years.

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The region has notorious white elephants like the Agora, a ‘multicultural covered space’ for sports and other events in Valencia City inaugurated in 2009 before completion.  Its potential buyer will conclude the deal only if the Generalitat carries out repairs costing an estimated €10 million.  

The abandoned Formula One circuit, the half-finished T2 tram line, an underused marina built for the America’s Cup and the incomplete Sociopolis development of 3,000 homes – of which only 400 were built – are decaying reminders of years of extravagance.  

The €270 million Ciudad de la Luz film studios outside Alicante City are the province’s own white elephant. They were the most modern in Europe and 60 films were shot there between 2005 when the studios opened and October 2012 when they closed.  

After receiving a complaint from the UK’s Pinewood Studios in May that year, the European Commission ruled that public money received from the Valencia government infringed competition regulations.

Ciudad de la Luz was ordered to repay €265 million and be put up for sale.  The first round of offers did not produce a buyer and it now enters the second round, although the European Commission agreed to raise the reserve price.  

This will now start at €50 million instead of €19 million but is still only a drop in the ocean of Generalitat debts.

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