The LRAU and tales of the "Gran Capitan"*

Once upon a time, when a town hall wanted to develop an area, it had to set in motion a democratic, public and transparent process. Neighbours were informed about the municipal plans and could appeal against one plan, namely the one presented by the town hall. In many cases, during electoral campaigns, political parties would take a stance on the suitability of developing or not. This gave citizens the impression that they knew what the party they voted for would do. Finally, the affected neighbours had to pay their share of the development costs, in the form of special taxes.

The following should be noted. The town hall, subject to budget limitations, could undertake only the public works strictly necessary to the public interest. And, of course it had to respect public procurement legislation. What did this entail? First, it had to draw up specifications (conditions of contracts for tenders), explaining exactly what it wished to do. Secondly, it had to publish its plans in the national Official Journal (and, where appropriate, in the Official Journal of the European Union), so that companies could submit a bid. Finally, the town hall had to choose the most favourable tender, and its discretionary powers were limited by a series of objective criteria that had to be respected.

Then came the LRAU. This law allows developers to boldly go, pouring concrete on the most unimaginable places on the coast or in the mountains of Valencia, with a free hand, which is the envy of developers world-wide. Is this a model of sustainable, environment-friendly development, of a means for creation of wealth for future generations, and is it a perfect example of town and country planning? Does this fall in a democratic framework of citizen participation and social sharing of urban benefits? Has it resulted in a rapid and sustained reduction in the price of housing in the Valencian region?

Thanks to the LRAU, the citizen does not need to read political party promises on town and country planning. Everything is taken care of by the "Agente Urbanizador" ("urbaniser") (Article 44 of the LRAU: individual initiative). The "Agente Urbanizador" submits his development project just after the municipal elections, to avoid anyone falling into the fatal temptation of asking the neighbours for their opinion on the matter. The "urbaniser" does not need to own the land (not even a part of it), and does not have to bother notifying the unfortunate people who made their home there.

If we wanted to speak ill, we could say that the first developer to present a plan has had as much time as he wanted to prepare it and he chooses the best time to launch it. He holds all the cards. Other possible candidates are not in the deal. But, let us give the process the benefit of the doubt, continue to believe in the equality of opportunity and explain how the LRAU says things should be done.

The town hall informs the public very clearly and definitively: "Here is someone who wants to do something with a certain area of land. We do not say either "yes” or "no", but if anyone else wants to do something, let him say so." Then it is published in the Official Journal of the Valencian Government, and during a period of between 20 and 40 days, other contenders can present alternative plans. What is the aim of this exercise? Is it to choose the best project to develop a zone in the public interest, or to beat the speed record for the preparation of plans? Forty days may or may not be a reasonable period to prepare an alternative development plan for a few hectares, but can anyone believe that it is possible to draw up a complete development project for an area of several million square metres in this short time? The problem is that in our region, decisions like this are made almost daily.

Let us now look a little more closely at the process of fair competition between the contending developers. One of them has had years to prepare the project, while others have had only between 20 and 40 days to present an alternative plan. So, once the 40 days are up anyone (article 46(1) LRAU) can tender to carry out the contract. So what are we complaining about? If "anyone" (that means you or I) can make an offer, where are we going to find a more democratic system favouring fair competition?

However, there are two small points which should not be overlooked. The town hall has still not decided which project to approve (it might approve one or none at all); and the time limit to present offers is … five days. The competition is carried out blind, because all the projects presented have to be examined and an offer put forward for each one of them, or the risk has to be taken of tendering for some, and not for others. There is no time and therefore, effectively, there is no competition.

Let us be clear. We are not talking about contracts for a few metres of roadwork, but contracts of 100 million euro and more. Don't forget that for any contract over 5 million euro, Spanish and European law require the public authority to set exact, detailed specifications and to publish them in the Spanish Official Journal and in the Official Journal of the EU, thereby giving any enterprise in Europe the possibility to tender for the contract. With what aim? The public authority can choose the best offer in the public interest and at the least cost for the taxpayer. The LRAU lays down exactly the opposite. Official specifications (general clauses and conditions of public works) are not set, and therefore are not published at Spanish or Community level. Neither transparency nor fair competition.

So now, all the tenders are in. The moment of decision: the town hall can approve a plan or refuse any one of them. It can also approve a plan subject to modifications which it believes appropriate, and then decide which developer(s) will carry out the work. All this, following criteria which have nothing to do with Spanish or EU legislation. In clear speak, the town hall can do what the hell it wants. There are no tender specifications, therefore the developers put forward completely distinct projects. How is it possible to make a fair and objective comparison between, e.g., a plan for detached houses with a golf course, and another with 3-floor apartment blocks and a conference hall? If the works to be evaluated have nothing in common, how can a cost-effective decision be made?

The reader may find the provisions of Article 47(5) of the LRAU interesting. The town hall must decide, first of all, what has to be done, and it chooses company A's project. But then, it must decide who will carry out the work. It is then obliged to give the contract to company Z which put in a cheaper offer. Well, despite everything company A (that the town hall had in mind from the outset) gets the contract anyway, providing it will work for the same price that company Z put forward. The contender "in pectore" gets the job anyway. Well, let us not think too badly about all this. After all, where is the harm, if the cost ends up being the same?

Well the harm is, that the cost will not end up being the same. The cost will be fixed by the town hall and the urbaniser. They can do this quite freely. The town hall fixes the "urbanisation" charges based on a "memorandum and detailed and justified accounts" presented by the urbaniser (Article 72(1)(a) LRAU). In other words, if the town hall and the developer agree, the existing residents, so-called "beneficiaries" of the work, can start trembling, because there are no control mechanisms foreseen in the law. Not a single one. How can it be that a public authority and a developer can agree to fix the final cost of public works, and that they are not bound by the initial tender which was officially adjudicated? Why is the original bid, which should have protected the interests of the affected residents, not respected?

Development plans under the LRAU are approved on the basis of a global estimate with no breakdown of development costs, making it impossible to check on quantities and measurements. The conclusion is obvious: excessive budgets resulting in "urbanisation" charges out of all proportion to reality. Furthermore, if the resident "beneficiary" of the development cannot pay the astronomical costs, then he has to give up more land. To sum up. This is what we are trying to get at. The "urbaniser" grabs enormous tracts of land thanks to the corrupt practices allowed, and even fostered, by the LRAU. Here is a naïve question for those who defend the good works of the LRAU. When you want work done in your home, do you ask the town hall to find you a builder and they fix the price between them, or do you find the best deal for yourself and settle directly with the tradesman?

These are tales from the "Gran Capitan". Tales of land grab and destruction of the environment in the Valencian region. All the arguments which we have put forward here were presented in July, with a wealth of detail, to the European Commission in a formal complaint. Of special note in this document were nine development projects for Sant Joan d'Alacant amounting to more than 100 million euro. Cold, objective analysis, in line with the arguments put forward by the Tribunal Superior de Justicia of the Valencian region when, in 2001, it called into question the constitutionality of the LRAU. We are not bluffing. We mean what we say. We are defending the law and the basic rights of everyone who lives in the Valencian region.

Charles Svoboda Enrique Climent

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* The Catholic Kings sent the “Gran Capitán” to Naples. He was very successful, and conquered several towns. But when he was asked to show the accounts of the expedition, he answered ironically, submitting arbitrary and exorbitant accounts, such as: “perfumed gloves so that soldiers do not have to breathe the smell of the battle: 200 million ducados… and for the patience to have to justify these minor details to a King to whom I have offered a kingdom: 100 million ducados”.