The white elephants that dragged Spain into the red
Europe has already bailed out Spanish banks, now Spain's regions are clamouring for money from central government - and one of the reasons for this is their lavish spending on white elephant building projects, such as the airport at Ciudad Real, south of Madrid..........
http://www.bbc.co.uk/news/magazine-18855961
I was listening to this a few days ago on the radio
"We had an attack of wealth, we didn't know how but suddenly we were richIts reasons like this that I think sometimes certain countries deserve to go bankrupt.Carlos Otto believes the private investors who pushed the airport project assumed the regional government would ensure its profitability by subsidising airlines to fly there.
Just remember, stimulus spending always works! If it doesn't you're not dumping enough money in!
There is a Godly taste in this. It is subtle, very british but oh so wondeful.
Juan Jose Toribio, an economist with Spain's IESE business school, says that to tackle Spain's problem of white elephant projects you first have to tackle the country's sacred cows - the semi-autonomous regions.
"Regional governments enjoy the possibility of spending and inaugurating public works but they don't run the political risk or cost of raising taxes. Someone should be held responsible for this and perhaps we should return to a much more centralised system."
Just a side effect of irresponsible growth, achieved by building boom and housing bubble. First got bailout at 3% rather than lending from banks at 7%... for banks. Central government already cuts whatever they can and they want reward for their failed projects.
Last edited by Szarko32c; 07-28-2012 at 09:18 PM.
Central government haven't even began to cut.....................
I liked your slobbering dog avi better.Originally Posted by KoTeMoRe
I actually said this ages ago in another thread about irresponsible spending on white elephants in th EU.
In that case Sir, I shall submit your recommendation for the Internet Légion d'honneur Mydaille!
Yeah that Mayan calender date of Dec 21, 2012 is looking like a dead ringer.
This is not a white Elephant, it is a scam (as explained throughly in the Article).
Aw well its just a scam....well that makes everything just ok then.
Nope, it was in relation with what Min said last time. Last time he spoke about many white elephants (but which were serviceable and still used Ibiza/Athens Stadium). Here it is simply a scam. Which in return will be instumentalized to curb down local autonomy.
Whether they are used or not doesn't mean to say they are not white elephants.
But questions must be raised in the viability of 80,000 seat stadiums that barely host more then 8000 people for a football match or expensive freeways, high speed rail to small population centres the list is endless or so a few small nations could look equally impressive as France/Germany.
I know you have read the article so I will not start fencing, but the issue with the CR airport was that there were no funds allocated to operate it...IE from the get go, there was nothing planned, thought etc to keep the airport afloat.
Actually the *freeways* in France are mostly toll financed. And High speed rail is profitable. What is not is the level and speed of expansion of the TGV network. In a sense, one could always build now, than in the future when the cost would be higher by a margin.
To use the airport.
My cities airport has been a development by two local councils. Whilst it has and will always be a RAAF base it's actually a good example to use. Newcastle is only a two hour drive from Sydney International Airport.
This airport has always been profitable. They never took the approach of "Build it and they will come" rather they took the approach of we will build it after they come"
What started out as a modest facility in an old hanger is now a modern start of the art facility. Yet small enough to remain profitable, large enough to handle all but Airbus A380's. and with plenty of room for expansion, if and when required.
Improvements are only ever made if airlines themselves provide guarantees there is no building excess gates or baggage handling unless they are needed.
Oh yeah 500,000 live in the airports catchment. Yet the road to the airport is nothing more then a country road. No fancy public transportation or freeway to be found here.
A solid business plan, it's profitable, and now the same approach has been used to get cruise ships to operate out of an industrial port which has seen steady year on year off growth over the past 10 years. What started as ships only calling in for a few hours now has 2-3 ships calling the port home during the cruising season. Again the terminal is nothing more then a large portable/temporary shed/marquee.
Two local councils are doing this. Not a state government or federal but local council. You know the government apparatus that generally looks after sweeping streets, rubbish collection and local libraries.
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