Dear Sir,
I read with great interest that the old Binifaldó water bottling plant in Escorca is to be mostly pulled down, it having closed in 2008 when the company that had the concession to run it went bankrupt.
It would appear that the work is being funded with tourist tax revenue at a cost of €504,000.
Now to most of the islands tourists who begrudgingly pay the tourist tax will on hearing this say that this now proves that the tourist tax is charged NOT to improve the islands infrastructure but to run the island.
The main point here is that a concession was granted assumingly to bottle natural spring water, the word concession is widely used and usually means that some sort of agreement is issued in exchange for a monetary payment.
We have a company who were in business to make a profit granted a concession by the state to bottle natural spring water who were declared bankrupt, so there are many questions that needed to be answered.
With most businesses there is some sort of safeguard put in place to ensure that in the event of the concession holder going bankrupt the site could either be returned to its previous state or the concession be sold on.
The bottling plant may be owned by the concession holder and now the state is being asked to pick up the cost of returning the site back to its previous state.
It would appear to be a case of bad practice on behalf of the state who may have been paid an annual fee, this has not been disclosed.
Good business practice would have decreed that a sinking fund be set up between the state and the concession holder, a deposit would be required by the concession holder to cover the cost of reinstatement and this could be worked to allow the upgrading of any bottling plant over time.
Where the state has fallen down is not understanding business, the concession holder may have made an initial investment when bottled water was in demand, the plant and equipment if well maintained may have a useful life of between 10-15 years.
Here we have a simple task on behalf of the concession holder, investment of €X / years, this defines return on investment and profit, here the concession holder can define if it is profitable to continue the business having covered their costs.
We now see the truth of bad business practice being disguised as a benefit to tourists, now €504,000 for a walkers refuge.
As we all can work out that purchasing a simple prefabricated hut to use as a walkers refuge would be in the region of €20,000 so one can see how this is a overinflated cost.
As the money is termed ‘Tourist Tax’ which we understand is to be spent on improving the islands infrastructure that the Tourist’s use then surely those that begrudgingly pay the tax should have a say on its expenditure.
We read that Sa Pobla water treatment plant will not be replaced to stop the discharge of nitrates into Albufera Nature Park, there was also major spillage of faecal water in Albufera Nature Park.
Now Tourists use the island’s water facilities and would only be delighted to hear of their Tourist Tax is being used to stop nitrate entering Albufera Nature Park and prevent sewage spillage along with the sanitation tax.
It seems that the tourist tax is to be used to prop up the state rather than be used to improve the infrastructure.
B. Rowe
