FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

Click Link to get instant AI answers to all business queries.
Click Link to find latest Economic Outlook of Sri Lanka
Click Link to view latest Research and Analysis of the key Sectors and Industries of Sri Lanka
Worried about Paying Taxes? Click Link to find answers to all your Tax related matters
Do you have a legal issues? Find instant answers to all Sri Lanka Legal queries. Click Link
Latest images

Latest topics

» Latest Financial Status and Future Outlook of SMB Finance PLC
by ChatGPT Yesterday at 11:15 pm

» Latest Financial Status and Future Outlook of Overseas Realty PLC
by ChatGPT Yesterday at 11:00 pm

» Latest Financial Status and Future Outlook of Merchant Bank of Sri Lanka & Finance PLC
by ChatGPT Yesterday at 10:55 pm

» McDonald’s අපේ නෙමෙයි අපේ බෝස්ගේ – අබාන්ස් කියයි
by ChooBoy Yesterday at 10:19 am

» AI Assistance for Stock Market Research and Analysis
by ChatGPT Yesterday at 7:12 am

» Comparative Analysis of the Insurance Sector
by God Father Tue Mar 26, 2024 11:46 pm

» Sri Lanka: Why Pay Exorbitant Taxes?
by ChatGPT Tue Mar 26, 2024 10:52 pm

» LANKA CREDIT AND BUSINESS FINANCE PLC (LCBF.N0000)
by K.R Tue Mar 26, 2024 3:15 pm

» CENTRAL INDUSTRIES PLC (CIND.N0000)
by D.G.Dayaratne Tue Mar 26, 2024 9:11 am

» SIYAPATHA FINANACE PLC (SLFL.N0000)
by ChatGPT Tue Mar 26, 2024 7:58 am

» FINANCE AND LEASING SECTOR
by ChatGPT Mon Mar 25, 2024 6:45 am

» LOLC FINANCE PLC (LOFC.N0000)
by ChatGPT Mon Mar 25, 2024 6:36 am

» CIC HOLDINGS PLC (CIC.N0000)
by ChatGPT Mon Mar 25, 2024 6:18 am

» UNION ASSURANCE PLC (UAL.N0000)
by ChatGPT Mon Mar 25, 2024 6:15 am

» First Capital Holdings PLC: Current Financial performance and future outlook
by God Father Sun Mar 24, 2024 10:58 pm

» LankaBizz: Sri Lanka's First ever Artificially Intelligent (AI) Business and Research Assistant
by God Father Sun Mar 24, 2024 7:27 am

» HOTEL AND TRAVEL SECTOR
by ErangaDS Wed Mar 20, 2024 7:22 am

» CIC Holdings Good Times Ahead
by ashan silva Mon Mar 18, 2024 11:00 am

» EPF Fund keep eye on low P/E Shares
by K.R Mon Mar 18, 2024 8:45 am

» SINS - the Tailwind effects of a crisis hit Economy
by Hawk Eye Mon Mar 18, 2024 8:37 am

» Ceylon cold stores
by Hawk Eye Mon Mar 18, 2024 8:25 am

» Asha securities Provide buy signal for CIC
by ddrperera Fri Mar 15, 2024 1:10 am

» CSE ready for another Downtrend?
by D.G.Dayaratne Thu Mar 14, 2024 11:24 am

» LankaLAW Forum : Sri Lanka’s #1 Discussion Platform for Legal Questions and Answers
by blindhog Thu Mar 14, 2024 9:14 am

» Sri Lanka poised to benefit from demand surge for ‘non-China origin’ graphite
by samaritan Wed Mar 13, 2024 1:31 pm

LISTED COMPANIES

Submit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)



CHRONICLE™ YouTube

Disclaimer
FINANCIAL CHRONICLE™ Disclaimer

The information contained in this FINANCIAL CHRONICLE™ have been submitted by third parties directly without any verification by us. The information available in this forum is not researched or purported to be complete description of the subject matter referred to herein. We do not under any circumstances whatsoever guarantee the accuracy and completeness information contained herein. FINANCIAL CHRONICLE™ its blogs, forums, domains, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not in any way be responsible or liable for loss or damage which any person or party may sustain or incur by relying on the contents of this report and acting directly or indirectly in any manner whatsoever. Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility, FINANCIAL CHRONICLE™ blogs, forums, domains, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. The information on this website is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.

Further the writers and users shall not induce or attempt to induce another person to trade in securities using this platform (a) by making or publishing any statement or by making any forecast that he knows to be misleading, false or deceptive; (b) by any dishonest concealment of material facts; (c) by the reckless making or publishing, dishonestly or otherwise of any statement or forecast that is misleading, false or deceptive; or (d) by recording or storing in, or by means of, any mechanical, electronic or other device, information that he knows to be false or misleading in a material particular. Any action writers and users take in respect of (a),(b),(c) and (d) above shall be their own responsibility, FINANCIAL CHRONICLE™ its blogs, forums, domains, subdomains and/or its affiliates and/or its web masters, administrators or moderators shall not be liable for any, direct or indirect, consequential or incidental violation of securities laws of any country, damages or loss arising out of the use of this information.


AI Live Chat

You are not connected. Please login or register

The white elephants that dragged Spain into the red

Go down  Message [Page 1 of 1]

Sidath

Sidath
Manager - Equity Analytics
Manager - Equity Analytics

Could the same happen in Sri Lanka....?

The white elephants that dragged Spain into the red
By Pascale Harter
BBC News, Spain
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.
It has one of the longest runways in Europe but today there are no planes, only hawks and falcons gliding in the still heat over the arid yellow landscape of Don Quixote's Castilla La Mancha.
Rabbits pop up around the state-of-the-art terminal, built of steel, glass and gleaming white concrete.
The airport of Ciudad Real opened in 2008 but it closed in April 2012. The luggage trolleys are now trussed together in the car park gathering dust and cobwebs.
It is not the only white elephant to stomp across Spain's landscape. It is merely one of the herd, a monument to the country's burst construction bubble which brought down its banks.
When a local construction magnate came up with the idea of an airport in Ciudad Real, money was sloshing around Spain for public works.
It was the 1990s and every town in every region had a grand project to set itself apart and bring in the visitors. Bilbao was getting its own Guggenheim museum, so why shouldn't Ciudad Real have its own airport?
"We had an attack of wealth, we didn't know how but suddenly we were rich," says Miguel Angel Bastenier, senior columnist at the left-of-centre daily El Pais. "There was such a frenzy for investing money and people got inebriated."
The airport in Ciudad Real was to be a private project, for private profit, but the business people behind it had no problem getting political support.
Before their collapse, Spain's local savings banks (the cajas), were different from other banks in one crucial way - local politicians sat on the board. So companies needed political support for large projects to encourage the cajas to invest.
Both the main political parties were in favour says Santiago Moreno, a spokesman for the socialist PSOE party which controlled the regional government at the time.
"Expert studies commissioned by the airport investors said it would create 6,000 jobs and a boom for the economy. There would have been a before and after for Ciudad Real."
But the airport opened its runways to a world in the worst recession for nearly 100 years. Caja Castilla La Mancha became the first of Spain's local savings banks to go under in the crisis, with a rumoured 70% stake in direct and indirect investment in the airport.
Many more of Spain's cajas have since had to merge or be taken over, exposed to toxic debts. Should they have been speculating on Spain's construction boom? The Bank of Spain has fined two of the politicians who sat on the board of Caja Castilla La Mancha for what it calls "serious violations".
"You might think the airport failed because of the crisis, but I am convinced that the shareholders never thought it (the airport) would work. The only profit in this airport was the building of it," says local investigative journalist Carlos Otto.
The official bankruptcy report for the airport seems to back this up. It says:
"The loans taken out were enough to cover the construction phase but no thought was given to the investment needed to make the airport function as a business."
Banks approached by the shareholders for further loans said they didn't think the business model for the airport was viable, the report says.
It goes on: "The construction itself of the airport provided the first profit for the investors because they signed contracts with their own construction companies."
"It was never run as a proper business," said a former worker at the airport who wanted to remain anonymous. He hasn't found another job and worries he won't get one in Ciudad Real - where everyone knows everyone - if he speaks out about how the airport was run.
"We had races on anything that had wheels," he told us. "We even had races on the floor-polishing machines - we were all so bored. Some people used to go out to pick asparagus or catch rabbits…"
There was little to do. There were international flights from London Stansted, and within Spain from Barcelona and Palma de Mallorca. But in its last year not even one flight a day landed on the 4.2km runway, designed - ambitiously - to service the new Airbus 380, the world's largest passenger airliner.
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.
The regional government is now controlled by Spain's Popular Party which accuses its predecessor of wasting millions of euros. It is still not known how much the whole airport venture actually cost. Estimates run from 356 million euros to one billion euros.
This lack of transparency is one of the problems that led to Spain's economic crisis according to David Cabo, representative of Civio, a foundation that lobbies for freedom of information.
"Public servants are not used to being monitored, their accountability isn't common in Spain. It's terrible because you have many opaque layers of government and each of those control public money."
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."
But even with an absolute majority in parliament, the Popular Party may find centralisation harder to achieve than austerity.
At Cruz Prado school in Ciudad Real, daily drop-off resembles a picket line, with parents letting off fire-crackers and shouting through loud-hailers. They are demonstrating against the local government for failing to finish construction of a new canteen and playground. For the last two years the project has remained a wreck of rubble - stalled because the money has run out for the next generation.
One of the parents, Milagros Coronado, says she feels angry - and guilty.
"I shouldn't because it wasn't my decision to build the airport, but I feel guilty for having liked the idea so much. I would like to have an airport, I would like to have everything, but I definitely, definitely need a proper school for my children."
From the central square of the village of Ballesteros de Calatrava, you can see the airport. During the building of it, the now-deserted streets here were abuzz with expectation - people thought this huge project would bring jobs and a better life. Carmen Delgado, who lives here, says people were pressured to sell their land, and some of her family's fields were expropriated for the airport.
"Land is everything for us. If you have land you can have potatoes, tomatoes, animals, olives to make oil... And now? We've been robbed of our way of life, and for what?"

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum