Spain to rethink instrastructure spending

21st June 2010, Comments 0 comments

The Spanish government is rethinking all big infrastructure projects as part of austerity measures to cut down its public deficit, the public works ministry said on Monday.

"We are analysing the different projects that are underway to establish the priorities, with an analysis project by project, keeping in mind that the most advanced projects have a greater chance of going ahead," a spokesman for the ministry told AFP.

"The advanced stage of a project is a factor which plays in favour of it being executed," he added.

The spokesman was reacting to an article in published in business daily Cinco Dias which said the government would freeze all infrastructure works that are not already more than 90 percent completed.

He said investments in infrastructure projects would be cut by almost 20 percent in 2010, with a reduction of 3.2 billion euros (4.0 billion dollars) out of a total budget of the original 19 billion euros for 2010.

According to Cinco Dias, any new allocation of work for the Spanish road network has been suspended and the budget for maintaining roads and highways will be reduced by 15 percent.

Prime Minister Jose Luis Rodriguez Zapatero said in April that his socialist government would invest 17 billion euros in rail and road projects over the next two years to help revive the economy and fight unemployment.

But since then the government unveiled 15 billion euros in spending cuts for this year and 2011 to slash the public deficit to the eurozone limit of 3.0 of GDP by 2013 from 11.2 percent last year.

The cuts, which included reductions in civil servants' salaries, are on top of a 50-billion-euro austerity package announced in January.

© 2010 AFP

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