At a joint press conference following the announcement that the report into the award for the management of the Palacio de Congresos has been deemed illegal, Palma's mayor, José Hila, and the government's vice-president, Biel Barceló, said that it could have involved a loss of 80 million euros of public money in addition to the 130 million euros it has cost to build the convention centre.
The report shows that a request for a new valuation in May this year to the municipal technical service (which gave it as 42 million) was "clearly higher" than that which was approved in January (40.5 million). Hila also pointed to "ridiculous penalties" that could have been incurred if the Barceló Group had bought the hotel and then decided to give up the management of the Palacio.
Hila said that, of the two offers, the one that was chosen had been for a higher rent for the Palacio and 40 million to purchase the hotel, as opposed to the 60 million contained in the other offer (by Meliá). What could have happened, he suggested, was that during the first four years (the agreement was that the option to purchase the hotel had to be exercised within five years without incurring interest charges), this option could have been taken while not paying the rent, which would have meant the loss of up to 80 million euros. "Taking all this into account, the town hall will not ratify the proposal and will ask the Palacio board to annul the procedure and not make the award."
Hila added that he now understood why the former mayor, Mateo Isern, had chosen not to sign off on the award, "as he had serious doubts about how things had been done and so left it to his successor".
Barceló said that there were now two options: one to have a new tender bid on a correct basis or another to consider direct public management of the Palacio with the hotel being rented out.
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