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CORRUPTION ALLEGATIONS

PP sues Socialists over tram project

Total costs of transport system in Parla, Madrid, double to 255.9m euros thanks to interest

Pilar Álvarez
The tram system in Parla, located in the south of the Madrid region.
The tram system in Parla, located in the south of the Madrid region. Paula Villar

The opposition Popular Party (PP) group in the Madrid suburb of Parla on Thursday began legal proceedings against the leader of the Madrid Socialist Party, Tomás Gómez, as well as a further 15 current and former councilors from the municipality. The PP is accusing the Madrid Socialists (PSM) of corruption, diversion of public funds and fraud in connection with the construction of a state-of-the-art tram system in Parla. Among those targeted by the PP is the current mayor of Parla, José María Fraile. Before heading the PSM, Gómez was the town mayor for 10 years.

In the complaint, the PP refers to the contract for the construction, maintenance and exploitation of Line 1 of the Parla tram, which was awarded in 2005 with a budget of 93.5 million euros. That contract was modified in December 2006, raising the budget by 18 million euros. The PP is arguing that the extra works — which included the modification of a train station, a recycled-water project and the remodeling of a street — were awarded to companies without going to tender.

The spokesman for the Madrid regional government and the head of the PP’s electoral committee, Salvador Victoria, presented the legal complaint at the Supreme Court, given the immunity afforded to Tomás Gómez due to his position as a deputy in the Madrid regional government. The PP allude to a supposed “swindle” costing 42 million euros, as well as the awarding of contracts for works costing 36 million euros with no tender. Victoria said Thursday that if Gómez does not explain himself “today,” then he should resign.

The lawsuit also makes reference to a renegotiation of the debt taken on by the council to pay for the tram system. The total cost for the project was 134 million euros, but residents will end up paying almost double that amount over 30 years. The interest payments for the refinancing of the council’s debts for the project will cost 122 million euros.

The Madrid Socialists described the move as a "smokescreen"

The new repayment schedule was agreed on July 26, at an extraordinary council meeting where the issue constituted the only point of order on the agenda. The repayment schedule will run until 2037 and will cost a total of 255.9 million euros, according to the meeting minutes, which also include warnings from the city auditor regarding the payments.

Those warnings included a reminder that the Parla council “does not have the sufficient budget allocation to cover” the repayment amount scheduled for 2013 — nearly nine million euros — and that its financial situation represents “scant or zero solvency to cover short-term payment obligations.”

A member of the council, Fernando Jiménez, sought to justify the steep costs of financing, saying that they were “just as high for the administration as they are for the private sector, and Parla needed that tram, as is evident given that five million passengers use it every year.”

With regard to the lawsuit presented by the PP on Thursday, Maru Menéndez, who is the second in command of the Madrid Socialist Party, called the move a “smokescreen,” one that is aimed at “creating a distraction” ahead of the debate about the state of the region.

Menéndez pointed out that all of the initiatives presented by the opposition ahead of the assembly debate have been rejected, including a request to discuss the privatization of the management of six hospitals in the region, the high university fees recently approved in Madrid and the Eurovegas macro-casino project, planned for the Alcorcón suburb. “The councilor [Salvador Victoria] spends his time presenting intimidating lawsuits instead of doing his job,” she said.

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