€2.4 billion bailout for Spain's 'ghost' roads
Steve Tallantyre · 28 Mar 2014, 11:19
Published: 28 Mar 2014 11:19 GMT+01:00
- Madrid's €550m 'road to ruin' tops fiasco list (31 Jan 14)
- 'Spanish firm built our bridge upside down' (08 Jan 14)
- Spain's roads double the cost of Germany's: study (19 Aug 13)
Spain's 'ghost roads' have been the subject of much national and international debate in recent months.
Commissioned during the boom years before the economic crisis, many now carry only a fraction of the anticipated traffic and have become vast financial liabilities.
The dire situation has led Public Works Minister Ana Pastor to offer a deal to the stricken road companies and their creditors this week, according to Spain's La Vanguardia newspaper.
Road owners currently owe €3.9 billion to banks and €500 million to construction companies.
If they went under completely, the Spanish government would have to assume 100 percent of the debt.
Under the terms of the proposed deal, a new state-owned company would be created to take over nine toll roads, spanning a total of 750km and representing 22 percent of Spain's toll-road network.
30-year bonds would be issued to creditors, with a minimum 1-percent yield which would rise in the case of an upturn in road traffic.
The state would have to assume responsibility for the initial €2.4 billion plus up to €1.8 billion of the debt owed to owners of expropriated land, according to La Vanguardia.
The terms of the bailout would, however, keep the debt from becoming part of the public deficit, even though taxpayer money would be used to pay the creditors.
Six creditor banks – BBVA, Santander, Bankia, CaixaBank, Banc Sabadell and Banco Popular – have until Monday to respond to the offer.
It is believed that they are likely to negotiate for an improved bond yield.