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External view of the Faculty of Psychology, inaugurated last year. Marilú Báez
Junta de Andalucía to bail out University of Malaga with a 40-million-euro lifeline
Education

Junta de Andalucía to bail out University of Malaga with a 40-million-euro lifeline

The loan, with "very favourable" conditions, will give some breathing space to the UMA in the midst of the worst economic crisis in its history, but what are the reasons for its money troubles?

Alberto Gómez

Tuesday, 29 October 2024, 20:59

The Junta de Andalucía is finalising its rescue plan for the University of Malaga (UMA), which is going through an unprecedented economic crisis. The regional government has made an extraordinary loan of more than 40 million euros available to the academic institution so that it can meet its debts and maintain its essential expenses, according to sources from both the regional government and the university. The loan, which will be formalised in the next few days, will provide a lifeline in the midst of a situation that was beginning to be suffocating due to the UMA's cash flow problems, with a deficit exceeding 27 million euros.

Without cash and with accounts in the red, the university is in the worst financial situation since its foundation in 1972. The repeated use of surplus cash without authorisation from the Junta - more than 70 million euros from 2019 to last year - and several, huge, vanity building projects have ruined the UMA in recent years. This is a surprising situation considering that in 2018 the University had a surplus of more than 162 million euros. The new rector, Teo López Navarrete, was categorical in his speech at the opening ceremony for the academic year: "Our economic situation is dire." He added some words of warning to the Junta: "We urgently need the necessary support for the university to continue to be what society deserves."

"Long" repayment period

That support has now arrived. The loan offered by the Junta does not have zero interest, as demanded by the UMA, but sets "very favourable conditions" to be made public soon, with a "comfortable" repayment period of over ten years and an "advantageous" rate of interest at a percentage yet to be specified. The agreement is "on the verge of being finalised", according to SUR sources, and will presumably be made public at a ceremony to be attended by the rector and the heads of the two regional ministries involved: Economy and Finance (Carolina España) and Universities (José Carlos Gómez Villamandos). In recent months, especially since the change in the UMA's governing team, the meetings in search of solutions have not stopped. The Junta is making the granting of the credit conditional on the fact that the unauthorised remainder of the funds will no longer be used and the UMA, for its part, is demanding greater funding and "equality" with private universities, as well as highlighting that it has already implemented a 15-million-euro adjustment plan.

The use of surplus funds without authorisation from the Junta is a trend that began in 2019 and continued until last year despite warnings from the regional government. In a letter addressed to the previous rector, José Ángel Narváez, the regional government warned of these expenses, as well as requesting "actions to correct this deviation." The Junta called for "the implementation of preventive measures" and even warned of "the consequences" available under the law in the event of the University not doing something about it. All these warnings went unheeded to the point that, in 2023, bills for cleaning and security were left unpaid, debts were run up with builders and even no share payouts were made, as confirmed by sources from both the Junta and the UMA. Now some of these cases are in court. Acciona, for example, is claiming more than 26 million euros and has requested an embargo as a precautionary measure in the face of the university's non-payments for work done by the construction company, as well as compensation for damages.

In recent months there have been many voices calling for support for the UMA, some as authoritative as that of Bernardo Quintero, Google guru and a major tech figure in Malaga. In a letter of support published in SUR he stated that he trusts that the Junta "will know how to recognise the strategic value" of the university. Malaga's mayor, Francisco (Paco) de la Torre, although critical of "improper management", also extended the city council's hand for "the use of resources and land", confident that "a balance can be reached" despite the fact that there are no "miraculous solutions."

The latest projects: huge, grandiose and above the awarded budget

The underfunding and the cost of building work in recent years explain the current economic situation for the University of Malaga. Among the most costly of these is the Faculty of Psychology with more than 30 interior courtyards and a library of 1,600 square metres. Its cost exceeded 33 million euros, almost 10 million more than was awarded for the initial contract. Similar happened with the Faculty of Tourism, which gained an assembly hall with an audience capacity of 400, beating the capacity in most local theatres such as the Echegaray. The total cost of this new building, still to be inaugurated, is around 27 million euros, eight million more than budgeted.

The new building for the Rectorate is another example: it took more than two years to open its doors due to the high cost of furnishing it, almost five million euros. The University's own maintenance staff had to be in charge of the move to the new building, the cost of which amounted to 23 million euros. Its auditorium, with seating for almost 1,000 people, makes it the second largest in Malaga city, second only to the Teatro Cervantes.

In September the rector, aware of the titanic task of cleaning up the institution's accounts, referred to "the reckless decision" that "building new centres, however necessary they may be, without being certain of having budgetary liquidity" entailed, while also still pressing the urgency to launch new projects: "Some centres, such as my own Faculty of Sciences, after almost 40 years of use are terribly deteriorated. We cannot do research or improve teaching without new laboratories."

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