High speed rail test ring project is proposed for Antequera.
Until recently, the contract for a major public construction project was a prize dozens of firms fought for. Now bids are few and far between and tenders are being abandoned with no takers.
Behind this change is a new mistrust of authorities. Firms fear they won’t be paid and are put off by budgets so tight that the contracts are barely profitable.
Earlier this month Adif, the rail infrastructure agency, finally abandoned the tender to build and manage the high speed rail test ring planned for the Antequera. With a budget of 386.2 million euros it was hoped that a consortium of firms would bid for the contract. Not one had come forward by the August 7th deadline.
This is the only major infrastructure project that is planned for in the province of Malaga. Progress seemed on track before this summer and in April the owners of the 700 estates affected by the scheme (inAntequera, Fuente de Piedra, Humilladero, Mollina,Cuevas Bajas and Benamejí) were invited to lodge their objections before the expropriation process.
While several groups had shown an interest in building the circuit (as many as five, according to Adif), they all backed down; the contract included tough economic conditions and excessive responsibility.
During a visit last month the Minister for Development, Ana Pastor, confirmed to Antequera’s mayor, Manuel Barón, that the contract would be put out to tender again. In fact Adif is working on new clauses to attract businesses. The test ring has not been included in the state budget for 2014, although it is hoped that it will be mentioned in the amendments.
The rail infrastructure firm Adif, has also tried unsuccessfully to rent out the two old buildings outside Malaga’s María Zambrano station to be used as offices. They were asking for 6,000 euros a month, an offer that attracted no one.
In the city of Malaga, one project that has been abandoned for the time being was for work to get rid of the bad smells at the mouth of the river Guadalmedina. One firm did bid for the contract but its offer was rejected. In the past similar projects have had between 20 or 30 suitors.
Sources have put the lack of interest down to the low budget. The contract had been put out to tender for 476,754 euros with a work time of two months. The local water board Emasa had previously estimated the cost of a similar project at more than two million.
Another recent example in the city is the new quay for luxury yachts and sailboats that is due to stretch out into the port area from the corner of the new commercial and leisure area, Muelle Uno.
The contract to design and manage a marina with berths for a hundred vessels, some of them of considerable size, has received no bids, nor even enquiries. The president of the local port authority, Paulino Plata, has said they will rethink the project, which did pose possible technical problems caused by water currents.
The main reason for construction firms’ reluctance to bid for contracts is undoubtedly financial. Barring exceptions - such as Malaga City Hall - public authorities have a reputation for not paying their bills on time, and often put off settling their debts for more than a year.
Pedro Javier López is a lawyer with the firm Consultores de Contratación Pública (CCP), whose clients are firms bidding for public contracts in Spain and abroad.
“Does this institution pay? Within how much time? These are their main fears,” he explained.
López highlights Malaga City Hall as one of the few positive stories. “It pays up, in less than 30 days. It’s a record.”
At the other end of the scale is the Junta de Andalucía, especially when it comes to education infrastructure.
“I have clients who are planning to take legal action to claim the money owed after more than a year without payment,” he said.
“It’s a real problem for small firms with few resources that are ignored by the banks.”
Another reason is the fact that some large construction firms have cut their workforces right down, which adds to the problem of the low profitability of projects.
“Sometimes they take on a contract just to have money in circulation, with no profit, but there are works that can even cost them money,” said the expert.
Meanwhile López pointed out that local firms are getting positive results bidding for contracts in other countries, despite the risks involved.