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Cristina Vallejo
Malaga
Tuesday, 27 August 2024, 11:36
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The Colegio de Economistas de Malaga - the professional association of economists in Malaga province - is not happy about the slump in public investment across the province at the end of the first quarter of 2024. Between January and March tenders for works fell by more than 60% compared to the figures of a year earlier. In numbers the figures show up more starkly: 60.5 million euros for 2024 compared to the 160 million euros for 2023. Moreover, all three administrations were responsible for the decline: the regional government (Junta) invested 78% less in the province than in the first quarter of the previous year, local governments (councils) had halved their tender figures and Spain's central government had reduced its investment in Malaga by 34%.
We are now more than halfway through the year and the figures for construction tenders in Malaga are improving. Their fall is now limited to just 17%, from the 272.7 million recorded in the first six months of 2023 to the 226 million thus far in 2024, according to reports published by Seopan, the Spanish Association of Construction Companies.
This puts Malaga in eighteenth place in terms of the volume of tenders offered among the provinces of Spain.
But not all administrations are in the same situation as far as the treatment of Malaga is concerned. Central government and town halls in Malaga province have increased their investment effort compared to last year. Therefore, in the first half of 2024 the Spanish government has tendered works worth 21.24 million euros compared to 19.27 million in 2023. This is a lower figure, however, than that of 2022, when by this time the figure was over 32.6 million. It is also way below that of 2021 when the Spanish government tendered works in the province worth over 63 million.
Meanwhile, local councils have so far tendered 162.35 million in Malaga, a figure almost 5% higher than in the first half of 2023. Furthermore, in the first half of this year the town halls have accumulated the largest volume of public works tenders for at least the last five years.
But the Junta in Andalucía seems to be dragging its feet, although appearances can be deceptive. Yes, the 42.72 million euros tendered between January and June 2024 is less than half the 98.71 million euros put out for the same period last year. However, we should bear in mind that the figure recorded between January and June of last year was exceptionally high in comparative terms. For starters it was three times the volume tendered in the first half of the previous year (2022), which was 33.43 million. In addition, that nearly 100 million was the highest figure by far for a first half of the last five years since 2019. It was in March 2023 when the tender for the construction of the infrastructure and urbanisation project for the underground extension of line 2 of Malaga's metro to the Hospital Civil was put out for 46.8 million euros excluding IVA (Spain's sales tax) and 56.65 million including IVA.
Reviewing all these figures, it is clear that local government is taking the lead for the most significant volume of tenders in Malaga with more than 162 million euros in the first half of 2024, followed by the regional government with just over 42.7 million euros, and in third position is central government with 21.24 million euros.
Having put the public works tenders carried out in Malaga by each level of government under the spotlight, it is now necessary to see how Malaga province compares with the rest of the country. Well, the total number of projects run up by the end of June places this coastal region in 18th place in the national ranking, well below its demographic weight in the country, as it is the sixth biggest province in terms of population. The first two are Madrid (over 2.35 billion euros) and Barcelona (over 1.58 billion), followed by Valencia (667.42 million) and Seville (572.54 million). The latter is the only Andalusian province to exceed Malaga in terms of public investment. The next Andalusian province is Cadiz with 132.34 million.
Why is Seville ahead of Malaga? In this province, all three governing bodies have increased their tenders across the board: central government tenders more than doubled from 77.7 to 160 million euros, regional government tenders rose by 18.5% to almost 220 million euros, while local government tenders rose by 35.3% to 193.5 million euros. This makes a total for the first half of the year of 572.54 million euros, 41% more than a year earlier.
In any case, Malaga is not the only province where tenders are falling. In fact, the list of provinces in which public works projects are down compared to 2023 is made up of no less than 25 names. Spain is divided into 17 regions and 50 provinces, so half of the country's provinces are tendering less than last year.
Be that as it may, if public tendering falls in 2024 for Malaga, so will it also fall for all Andalucía. By this we mean not the Junta figures alone, but those resulting from the sum of all three ruling bodies for the region. To be precise, the numbers will fall by 11% to over 1.48 billion euros. In this case the main culprit is central government with a 27% reduction to 371.2 million, but the Junta also cut its tenders by 22%, to 461.62 million. Only local councils stand apart with a 14% increase in their tenders to 654 million euros.
So, if the attitude towards tenders by the different governing bodies is beginning to differ, so is it also beginning to differ depending on whether it is for civil works or for building. Of the 226.3 million euros tendered in Malaga province in the first half of this year, the majority (139.5 million) corresponds to building, 89% more than in 2023. In contrast, investment in civil works has fallen by half from nearly 200 million euros to just 86.80 million. Building, therefore, has overtaken civil works and infrastructures in terms of the volume of tenders. This is an unusual situation and, if it remains so by year-end, it is something that has not happened since at least 2019.
Building investments include buildings for administrative, educational, industrial or health facilities, among others. Civil works tenders involve roads, railways, supply networks or urban development.
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