In April 2021, President Armengol laid the first stone for the project on C. Fornaris in La Soledad, Palma. The company, Construcciones Alea S.L., had a July 2022 deadline for completion. However, in March last year the company took the decision not to continue. Prior to this decision, it had sent several formal letters to the Ibavi housing agency to ask for more time and for a review of the cost of the project due to the rise in inflation. It would appear that the company received no replies to these letters.
When work ceased, no more than a fifth of it had been undertaken - the whole project was valued at 4.5 million euros. Ibavi's response was to invoke penalty clauses. These included the loss of the deposit that the company had made in securing the award of the contract. At the same time, Ibavi started procedures to raise a new tender for the work.
The matter was considered by the Consultative Council, the body that provides legal advice to the government and public authorities. The Council took issue with the government, arguing that the company had justified reasons. These were to do with the considerable increases in the cost of materials and energy. Building the 35 homes would now cost the company an additional 700,000 euros.
The Council's report notes that while the company's requests went unanswered, the government was itself accepting the impact of rising costs and was approving packages of measures to deal with these. In its view, the government has "incurred responsibility", as there have been some "irregularities" in its way of proceeding that should be assessed.
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