Estepona Town Hall Continues Paying Off Debt Inherited from Socialist Era
The town hall continues to pay nearly seven million euros owed to the largest construction company of the previous municipal government, stemming from unpaid works on key projects in the town.
Estepona Town Hall is still addressing a debt inherited from the socialist era, primarily owed to the largest construction company of that time. This debt, amounting to almost seven million euros, includes unpaid works related to significant projects such as the Seghers Urbanization, the Police School, and the renovation of the Pabellón del Carmen. Despite a court ruling requiring the town hall to settle the debt, the current administration emphasizes the financial effort being made to clear this and other inherited liabilities.
Estepona Town Hall, currently led by José María García Urbano's administration, is still grappling with the financial consequences of the previous socialist government. In particular, the debt owed to the largest construction company from that time remains a burden on the municipality’s finances.
In total, the debt inherited by the town hall reached 304 million euros, and a significant portion of this sum is attributed to nearly seven million euros that remained unpaid to this construction company. This debt is linked to key projects executed during the socialist administration, including the Seghers Urbanization, the construction of the Police School, and the renovation of the Pabellón del Carmen.
The origin of this debt dates back to 2011, when the Socialist Party left the town hall. At that point, the municipality owed the construction company 6,977,025 euros. Through the supplier payment decree of 2012, the company was able to collect part of the debt, specifically 4,515,217 euros, but the remainder was contested in court.
The legal process culminated in a ruling against the town hall, which was required to settle the outstanding balance, along with high interest charges resulting from the unpaid debt. This situation is considered one of the consequences of the financial management of the previous socialist government, which also left other liabilities in the municipal coffers.
Consequences of Socialist Management
Ana Vilaseca, deputy mayor and head of the Finance Department, explained that when the current administration took office in 2011, they found the debt accumulated by previous governments, which exceeded seven million euros with the construction company. “This is the same company that was contracted for the Firefighter Park, which was also left unpaid,” Vilaseca recalled. The company, which bid on numerous tenders during the socialist administration, secured contracts for a variety of projects, ranging from smaller works such as street and neighborhood paving to large-scale projects like the Seghers Urbanization, the Police School, and the Pabellón del Carmen renovation.
According to Vilaseca, the unpaid debts accumulated throughout the years of socialist management. The deputy mayor pointed out that the average payment period for the town hall during that time reached 1,492 days, far exceeding the legal limit of 30 days for settling debts.
“This is a clear example of poor management that not only generated significant debt but also led to the return of subsidies and other taxes, resulting in surcharges and high interest rates,” Vilaseca said.
Efforts by the Current Government
Despite the challenges posed by this inherited debt, the current administration has implemented a series of measures to address the town's economic and financial issues. Vilaseca emphasized the “significant financial effort” the town hall is making to correct the imbalances caused by the previous government. She also referred to the more than 90 million euros in banking debt left behind, which has been further increased by interest charges.
However, the current administration has managed to turn the situation around. According to Vilaseca, the most recent budget surplus figures demonstrate the effectiveness of the current government's management, which has allowed Estepona Town Hall to take firm steps toward the early repayment of its banking debt. "Soon, Estepona will be one of the few large town halls in Spain with zero debt," the councilor stated.
Estepona Town Hall continues to work on resolving the financial problems inherited from the socialist era, focusing on reducing debt and improving the town's economic stability. While the consequences of past management still impact municipal finances, the current administration is optimistic about Estepona's financial future and its ability to meet the economic challenges of the coming years.