Spain to invest billions in rail, road projects

In an interesting move, the Spanish government has stated that there will be further investments in Spain’s road and railway infrastructure. The article was posted on the Business Week website(link below). I think this is worth mentioning on a property related blog, as better communicated regions should lead in time to a positive increase in property prices and a general betterment of the Spanish economy.

Spain said Wednesday it would invest euro17 billion ($23 billion) in a rail and road project over the next two years in an effort to boost its recession-hit economy and create jobs.

Prime Minister Jose Luis Rodriguez Zapatero said 70 percent of the investment would go toward new passenger and freight rail projects, as well as improvements of the existing network. The remaining 30 percent will be dedicated to highway construction and maintenance.

He said the plan would not affect Spain’s coffers for the moment as it would be financed initially by the companies contracted with funds from state credit institutions and private banks.

Zapatero said Spain would begin paying the companies back after 2014 by means of a new tax on users once the projects are finalized and functioning.

“This is the most important collaboration between the public and private sector in the history of our country,” said Zapatero.

The Development Ministry said the plan was designed so that it would not interfere with the government’s pledge to reduce its deficit from 11.2 percent of GDP to 3 percent by 2013, as demanded by the European Union.

Spain, with unemployment at an EU high of 18.8 percent, is desperately searching for ways to create new jobs and boost its economy following the collapse of its construction sector and the effects of the international financial crisis in recent years.

Source: Business Week

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