Estepona City Council Resolves Massive Debt Inherited from Previous Administration
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The current governing body was forced to settle a debt of nearly 3 million euros, which included both the principal and interest accumulated due to late payments, as a result of a legal claim filed by the construction firm for works that were contracted in 2005. In April of this year, the Estepona City Council finally managed to clear the entirety of the substantial debt left behind by previous administrations led by the PSOE, stemming from outstanding payments related to the construction of the city’s Fire Station. The socialists had left behind a debt totaling 2.8 million euros, consisting of both the principal amount and interest on overdue payments which the current governing body had to address. The Fire Station project was initially awarded in 2005, with subsequent modifications in 2006 amounting to a total of 3,153,716 million euros. While 53% of the payments were made between 2005 and 2007, totaling 1,605,293 million euros, no payments were made by the Socialist Executive between 2008 and 2011, leaving 1,202,412 million euros pending. Following the arrival of the current government team at the City Council, efforts were made to tackle the significant municipal debt and unpaid bills, including attempts to include this debt in the Payment Plan to Suppliers initiated by the PP Government of Spain. However, only a certification of 346,010 euros could be paid under this plan, as the construction company had transferred much of the debt to the bank, rendering it ineligible. Despite this setback, the initial payment made during José María García Urbano’s mayoral term allowed the facility to finally open its doors after a prolonged closure. The remaining outstanding debts, attributed to the mismanagement of the PSOE, ended up in court, resulting in a ruling in 2020 that mandated the City Council to pay 1,202,412 euros in principal along with an additional 1,306,395 million euros in interest. To address this substantial debt, the Council negotiated a payment plan extending until 2025. The principal amounts were settled in 2021 and 2022, while the outstanding interest was paid off in 12 quarterly installments of 108,866 euros, with the final payment being made this April. Ana Vilaseca, the deputy mayor overseeing the Treasury, criticized the socialist approach to financial management, highlighting the significant cost overruns incurred due to delayed payments. She emphasized that these interest payments had inflated the total cost of the project by 45%, underscoring the detrimental impact of such mismanagement on public administration. Vilaseca concluded that the protracted process of repaying this debt serves as a cautionary tale of what should be avoided in municipal governance.

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Stacey Watson

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