View from the Palacio convention centre. | Pere Bota

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Palma's Palacio de Congresos convention centre and hotel are to be leased out for an initial 15-year period, renewable for three years, at a price of 1,585,000 euros (plus VAT) per annum plus a 5% variable based on total revenues.

This valuation forms part of what will be the new specifications for the tender to manage the complex which the Palacio's board is expected to approve on Thursday. On behalf of the town hall (a 50% shareholder in the Palacio company), the mayor, José Hila, said yesterday that the conditions of this new tender "will benefit the administration".

The mayor added that both the centre and the hotel are expected to be open for business by the end of the year. This will mean that the town hall can begin to receive some payback on an investment calculated to have exceeded 100 million euros. The final figure for the investment will be known and made public when everything is finished.

The two buildings are ready, though there are still fittings which need to be installed, such as the seating for the auditoriums. All that really remains is finding the company to run the whole complex.

The Balearic vice-president, Biel Barceló (the government holds the other 50% of the shares), stated that the winning company would need to have international experience in managing conference centres. He also noted that the rental amount was a "minimum" as the operator can anticipate it increasing by generating greater revenues. Barceló added that under the specification the government will be able to stage events at the Palacio for a total of eight days a year on the understanding that the whole building is not needed. The government will also be able to use it for a further four days at 50% of the price.

Hila observed that the centre will allow events to be held on a scale that has not previously been possible. This will help in creating employment. He stated that there was no intention of selling the building and that amortisation of its costs was not needed as it will be the property of the public administration. He also said, though, that if the project for the Palacio had arisen now it would not be built.