Junta comes to rescue of Malaga university with 48.5- million-euro bailout loan but changes are demanded

Months of negotiations by three interested parties quietly working behind the scenes have finally borne fruit this week in the joint announcement made yesterday by the Junta de Andalucía's ministers for the economy and higher education and the rector of the University of Malaga (UMA), all three surrounded by the deans, directors and vice-rectors of the Malaga institution. A loan of 48.5 million euros has been agreed and is in the final stage of sign-off. This news means that the regional government is coming to the rescue of the university in exchange for an adjustment plan that UMA plans to submit to a vote midweek at its governing council. This loan, as already reported by SUR in English, will guarantee that the university will be able to meet all its debts and financial obligations, while at the same time carrying out its teaching and research activities as normal. There will be a three-year grace period and a 21-year repayment period. It is not an interest-free loan as UMA wanted, but almost - a fixed rate of 1% has been agreed.

With this loan, stated José Carlos Gómez Villamandos, regional minister for the universities, the Junta is providing a "response" to the "complicated situation that has arisen over the last few years", so that UMA "continues to fulfil its mission and so that students, administration and services staff and teaching staff do not see their aspirations and, of course, their rights undermined in any way." Both he and regional economy minister Carolina España avoided going into the reasons that have led UMA to this pressing financial situation after the university spent more than 70 million euros without Junta authorisation. Monday was the day to talk about the solution to the problem and not its causes.

The bailout, Gómez Villamandos explained, is "linked with an adjustment plan, as established by the Organic Law of the University System, which is what obliges us to set up this adjustment plan." He added: "This plan will allow the University of Malaga to enter a new management model, much more effective, much more efficient. All institutions have room for improvement and I believe that, making a virtue out of necessity, the UMA is going to substantially improve its management capacity and, together with this, also the search for new income streams." He concluded with the point that this rescue represents a "turning point in the history of the University of Malaga", which is going to go "from a very complicated situation to a situation of financial normality and, therefore, of academic activity and commitment to society." This adjustment plan must both be approved by UMA's main council and favourably received by the Junta, according to Gómez Villamandos.

Carolina España expressed her confidence that, "in all probability", the governing council of the Junta will approve the loan to the UMA on Tuesday this week, which will be made as a single payment. At the same time the Malaga institution will address in its own governing body, in an extraordinary session convened at 1pm, the adjustment plan that goes along with this bailout. The rector, Teo López, has only made known two details of this plan aimed at rebalancing UMA's accounts, which will logically address both income and expenditure. "We have many perspectives and many projects in relation to improving income, which are essentially linked to the new hall of residence, which is already in the tendering phase and which, as it is a public-private initiative, will mean a very significant injection of funds for the University of Malaga, as well as the exploitation of an estate we have near the airport, La Máquina Grande. And cost containment always involves an adjustment in what has to do with the ordinary budgets and also with chapter one, which is what has to do with staff growth," he explained.

With this financial boost, López explained, the university guarantees that it will be able to meet its existing debts, such as the 26 million euros that a construction company is claiming in court for the new Faculty of Tourism, and those that will arise with work currently being developed and are "extremely important for the University of Malaga in the coming years." This is the case with the extension to the Faculty of Philosophy and Arts, which is still 20% complete.

Carolina España said that "it is only fair not only to solve this financial problem, but also to pay the construction companies that have carried out these builds." She continued: "We are aware that the university has to continue with its classes, with the academic work and that, without a doubt, we had to guarantee the continuity of educational services, so we got down to work between the two ministries and the rector's team to sort out this financial injection, which means that it can continue to provide academic services on a daily basis without the burden of debt." She stressed that this financial injection "will benefit not only the University of Malaga and the educational community, but the whole city."

The bailout has, according to España, "good conditions that guarantee, on the one hand, the financing of the university, but also guarantee that the university can repay this loan and thus also pay its suppliers." "I hope that this adjustment plan does not represent an excessive burden to the University of Malaga, because that is not what is intended, far from it in fact. What is intended is that it can continue to provide its academic services, as it has been doing until now. The UMA is a powerful university and what it needs to do is leave behind this financial debt and begin to function with a certain degree of normality," she added.

The rector warned, however, that he would continue to "need the help of the university council". "You won't get rid of me so easily," López smiled at Gómez Villamandos.