Sunday, June 20, 2004
Sunday, June 20, 2004
The following article explains the public procurement process and the LRAU (the Valencian Land Law). J. C. C. (name withheld at his request), an active member of Abusos Urbanisticos No, wrote the article and submitted it recently to the Petitions Committee of the European Parliament for their information.
We are grateful to him for his contribution. Many thanks,
Charles Svoboda
*******************************************************************************************
PUBLIC PROCUREMENT AND THE LRAU.
The delegation of the European Parliament visited an area in Sant Joan d’Alacant which has recently been the subject of nine development projects.
At the current stage of the proceedings, the LRAU allows the town hall of Sant Joan d’Alacant, at any time from now, to award a development contract for over 100 million Euros to an “urbanizador” or developer (hereafter, “urbanizor”), without having followed the strict measures imposed by the EU's public procurement directives, and without any publication at the Official Journal of the European Union (it was only published in the regional Official Journal, in a notary of the town, and in a locally circulated newspaper).
How can this happen? Because the LRAU has established a kind of legalistic engineering or semantic exercise that leads to a "no-law’s" land, where anything goes and the EU directives on public procurement are not respected.
It is respectfully submitted that the LRAU creates a system that allows the breach of the European public procurement directives.
a) In the “traditional” system of urban developments in the European Union, a town hall decides what to do, and then is obliged to publish its intention to award a public contract in the appropriate journals (at national and/or Union level, depending on the amount of the contract). Different firms then submit their bids. The town hall awards the contract to one of the bidders in an open competitive process, pays the price for the “obra pública” (development), and recovers that money from the affected people through special taxes (in Spanish law, “contribuciones especiales”).
- Advantages for the citizen/property owner: transparency and competitive bidding that reduces costs; respect for European laws as regards property rights; ensures honesty and avoids favouritism in awarding contracts; tight controls on public expenditure; need to file comments/allegations on one single development project, based on the public interest; public works strictly limited to what is necessary.
- Drawbacks for the town hall: it has to work hard (make the project, get the money from the users and pass it to the contractor, monitor the works…). Even more drawbacks for suspicious representatives: the contract can't be awarded to "friends" of the Mayor or town hall through a clandestine process, thus there is less opportunity for the town hall or its officials to derive profit, open or under the counter.
b) In the LRAU system, a town hall, often without any competitive bidding, and without notice to affected property owners, approves a technical project and a financial offer submitted by an urbanizor, but instead of paying the urbanizor and recovering the money from the affected people, the LRAU pretends that the urbanizor is paid directly by the affected property owners, although the payment to the urbanizor, be it in land or in money, is always done through the public authority of the town hall.
• Advantages for the town hall: no need to draft a project, no need to publish in the appropriate Official Journal, no need to restrict the public works to what is strictly necessary, no need to monitor the works, no need to extract the money from the affected property owners and pass it to the urbanizor.
• Disadvantages for the citizens: loose or no control on supposedly non-public expenditure; need to defend themselves against several projects, drafted in the private interest of the developers; loss of most of their property with no, or minimal compensation; obligation to pay exorbitant costs for unnecessary works, which are proposed by the urbanizor and accepted by the town hall in the sole interest of the developer. Not to talk about defencelessness or violations of the right to property, to domicile, to a fair hearing, etc.
In the LRAU system under scrutiny, the initiative is not public, but comes from a private urbanizor (developer/ promoter), who submits a development project. This project is published only in the regional Official Journal and in a locally circulated regional newspaper. Other firms or a collective of property owners who represent more than 50% of the affected land can submit alternative projects during a short period (20 to 40 days). Then, in the next five days, anybody can submit a bid with an economic offer for the works to be done for each of the different projects. As a result:
- The urbanizor who initiates the proceedings has all the advantages: he has had as much time as necessary to prepare his technical project and his economic bid, whereas possible competitors have to abide by the peremptory deadlines dictated by the law.
- There is a services contract (the development project) which might be above the threshold of the directive but is not published in the OJEU. In addition, although the Services Directive requires the public entity to keep the different projects confidential, the LRAU provides for publication of all of them, which is a further breach of European law.
- There is a public tender for a work contract with a five days period to submit bids… on a hypothetical project! Although the town hall has not yet decided at that point which project will be approved, bidders have to submit economic offers for all the alternative projects if they want to have any realistic chance to be chosen.
- The awarding criteria do not comply with those of the directives. The LRAU mentions “adequacy”, “suitability”, “proportionality”… which, in our view, open the door to “arbitrariness”, “predetermined winner”, etc. See below.
- The author of the winning technical project is not necessarily awarded the work contract (which appears to be a good thing: a service contract can be perfectly differentiated from a works contract). However, the author of the winning project has always the possibility to be awarded the work contract if he accepts the terms of the winning offer. Strange, isn’t it? Three remarks:
The successful bidder of a works contract… gets no works contract (Article 47.5 LRAU).
Message to competitors: whatever you do, we will award the contract to “our” candidate.
“Our” candidate accepts the terms of the winning offer for the works contract. But he will not lose money. The town hall can always accept further increases in the price, provided that they are… “justified” (Article 72.1.a) LRAU ). That suggests he can deliberately undervalue the costs of the project at the initial phase, so as to get the contract and then raise these later on to reflect inflation, labour costs, material price increases, or even his own profit margin by means of "backhander" deals with his subcontractors.
CONCLUSIONS
We are currently drafting our complaint against the LRAU for breaches of the European public procurement rules. Since complainants do not become a party to the proceedings, and have neither access to the file nor the possibility to respond to the allegations of the party complained of, we are concerned that the Valencian government will try to avoid any Commission intervention through technicalities in a matter which is highly legalistic. In any case, we would like to underline:
- Contrary to what was stated by representatives of the Valencian government before the Petitions Committee on 17 February 2004, the Spanish Constitutional Court has never declared the LRAU compatible with the Spanish Constitution. The only action so far examined by the Constitutional Court was declared inadmissible on procedural grounds.
- The Valencian government does not appear to have any intention to apply a moratorium on the LRAU, despite its comments on the adverse effects of the LRAU and the intended protection of property owners' rights under the proposed Ley Urbanistica Valenciana-LUV. Quite the contrary: each of the subsequent drafts of the new Valencian land law (LUV) has contained the same transitional measures, stating that the new law will apply only to the new projects, whereas the LRAU will continue to be applicable to all the “old” projects (i.e., projects filed until the last day of validity of the LRAU -no wonder there will be lots of projects filed during those last days). Nor will the Valencian Government embrace major changes, such as those recommended by the Valencian Ombudsman, and the AUN, in particular with regard to "cesiones gratuitas", expropriation, and the role of the "agentes urbanizadores" etc. that is, some of the most pernicious and controversial provisions which appear to be in conflict with the Spanish Constitution, national and European laws.
- To judge from the comments of at least three Ministers and senior officials of the Valencian government, they have so far dismissed the fact finding mission as a "farce", dispatched by a "defunct" or "lame duck" European parliament! So they clearly intend to keep LRAU alive and plan a straight succession to the new LUV!!
The following article explains the public procurement process and the LRAU (the Valencian Land Law). J. C. C. (name withheld at his request), an active member of Abusos Urbanisticos No, wrote the article and submitted it recently to the Petitions Committee of the European Parliament for their information.
We are grateful to him for his contribution. Many thanks,
Charles Svoboda
*******************************************************************************************
PUBLIC PROCUREMENT AND THE LRAU.
The delegation of the European Parliament visited an area in Sant Joan d’Alacant which has recently been the subject of nine development projects.
At the current stage of the proceedings, the LRAU allows the town hall of Sant Joan d’Alacant, at any time from now, to award a development contract for over 100 million Euros to an “urbanizador” or developer (hereafter, “urbanizor”), without having followed the strict measures imposed by the EU's public procurement directives, and without any publication at the Official Journal of the European Union (it was only published in the regional Official Journal, in a notary of the town, and in a locally circulated newspaper).
How can this happen? Because the LRAU has established a kind of legalistic engineering or semantic exercise that leads to a "no-law’s" land, where anything goes and the EU directives on public procurement are not respected.
It is respectfully submitted that the LRAU creates a system that allows the breach of the European public procurement directives.
a) In the “traditional” system of urban developments in the European Union, a town hall decides what to do, and then is obliged to publish its intention to award a public contract in the appropriate journals (at national and/or Union level, depending on the amount of the contract). Different firms then submit their bids. The town hall awards the contract to one of the bidders in an open competitive process, pays the price for the “obra pública” (development), and recovers that money from the affected people through special taxes (in Spanish law, “contribuciones especiales”).
- Advantages for the citizen/property owner: transparency and competitive bidding that reduces costs; respect for European laws as regards property rights; ensures honesty and avoids favouritism in awarding contracts; tight controls on public expenditure; need to file comments/allegations on one single development project, based on the public interest; public works strictly limited to what is necessary.
- Drawbacks for the town hall: it has to work hard (make the project, get the money from the users and pass it to the contractor, monitor the works…). Even more drawbacks for suspicious representatives: the contract can't be awarded to "friends" of the Mayor or town hall through a clandestine process, thus there is less opportunity for the town hall or its officials to derive profit, open or under the counter.
b) In the LRAU system, a town hall, often without any competitive bidding, and without notice to affected property owners, approves a technical project and a financial offer submitted by an urbanizor, but instead of paying the urbanizor and recovering the money from the affected people, the LRAU pretends that the urbanizor is paid directly by the affected property owners, although the payment to the urbanizor, be it in land or in money, is always done through the public authority of the town hall.
• Advantages for the town hall: no need to draft a project, no need to publish in the appropriate Official Journal, no need to restrict the public works to what is strictly necessary, no need to monitor the works, no need to extract the money from the affected property owners and pass it to the urbanizor.
• Disadvantages for the citizens: loose or no control on supposedly non-public expenditure; need to defend themselves against several projects, drafted in the private interest of the developers; loss of most of their property with no, or minimal compensation; obligation to pay exorbitant costs for unnecessary works, which are proposed by the urbanizor and accepted by the town hall in the sole interest of the developer. Not to talk about defencelessness or violations of the right to property, to domicile, to a fair hearing, etc.
In the LRAU system under scrutiny, the initiative is not public, but comes from a private urbanizor (developer/ promoter), who submits a development project. This project is published only in the regional Official Journal and in a locally circulated regional newspaper. Other firms or a collective of property owners who represent more than 50% of the affected land can submit alternative projects during a short period (20 to 40 days). Then, in the next five days, anybody can submit a bid with an economic offer for the works to be done for each of the different projects. As a result:
- The urbanizor who initiates the proceedings has all the advantages: he has had as much time as necessary to prepare his technical project and his economic bid, whereas possible competitors have to abide by the peremptory deadlines dictated by the law.
- There is a services contract (the development project) which might be above the threshold of the directive but is not published in the OJEU. In addition, although the Services Directive requires the public entity to keep the different projects confidential, the LRAU provides for publication of all of them, which is a further breach of European law.
- There is a public tender for a work contract with a five days period to submit bids… on a hypothetical project! Although the town hall has not yet decided at that point which project will be approved, bidders have to submit economic offers for all the alternative projects if they want to have any realistic chance to be chosen.
- The awarding criteria do not comply with those of the directives. The LRAU mentions “adequacy”, “suitability”, “proportionality”… which, in our view, open the door to “arbitrariness”, “predetermined winner”, etc. See below.
- The author of the winning technical project is not necessarily awarded the work contract (which appears to be a good thing: a service contract can be perfectly differentiated from a works contract). However, the author of the winning project has always the possibility to be awarded the work contract if he accepts the terms of the winning offer. Strange, isn’t it? Three remarks:
The successful bidder of a works contract… gets no works contract (Article 47.5 LRAU).
Message to competitors: whatever you do, we will award the contract to “our” candidate.
“Our” candidate accepts the terms of the winning offer for the works contract. But he will not lose money. The town hall can always accept further increases in the price, provided that they are… “justified” (Article 72.1.a) LRAU ). That suggests he can deliberately undervalue the costs of the project at the initial phase, so as to get the contract and then raise these later on to reflect inflation, labour costs, material price increases, or even his own profit margin by means of "backhander" deals with his subcontractors.
CONCLUSIONS
We are currently drafting our complaint against the LRAU for breaches of the European public procurement rules. Since complainants do not become a party to the proceedings, and have neither access to the file nor the possibility to respond to the allegations of the party complained of, we are concerned that the Valencian government will try to avoid any Commission intervention through technicalities in a matter which is highly legalistic. In any case, we would like to underline:
- Contrary to what was stated by representatives of the Valencian government before the Petitions Committee on 17 February 2004, the Spanish Constitutional Court has never declared the LRAU compatible with the Spanish Constitution. The only action so far examined by the Constitutional Court was declared inadmissible on procedural grounds.
- The Valencian government does not appear to have any intention to apply a moratorium on the LRAU, despite its comments on the adverse effects of the LRAU and the intended protection of property owners' rights under the proposed Ley Urbanistica Valenciana-LUV. Quite the contrary: each of the subsequent drafts of the new Valencian land law (LUV) has contained the same transitional measures, stating that the new law will apply only to the new projects, whereas the LRAU will continue to be applicable to all the “old” projects (i.e., projects filed until the last day of validity of the LRAU -no wonder there will be lots of projects filed during those last days). Nor will the Valencian Government embrace major changes, such as those recommended by the Valencian Ombudsman, and the AUN, in particular with regard to "cesiones gratuitas", expropriation, and the role of the "agentes urbanizadores" etc. that is, some of the most pernicious and controversial provisions which appear to be in conflict with the Spanish Constitution, national and European laws.
- To judge from the comments of at least three Ministers and senior officials of the Valencian government, they have so far dismissed the fact finding mission as a "farce", dispatched by a "defunct" or "lame duck" European parliament! So they clearly intend to keep LRAU alive and plan a straight succession to the new LUV!!
Wednesday, June 09, 2004
A message from Chuck Svoboda re the European Elections this weekend.
"Abusos Urbanisticos No" (AUN) has been asked by many of its members and supporters for our suggestions as to voting for parties in the June 13 European Parliamentary elections. While, as a civic action association, we have chosen not to enter directly into political affairs, we have been able to obtain firm support from some of the parties contesting the European elections. Most notably these are the "Green/Socialist" alliance and the Bloc ( which will appear on the ballot paper under "Pueblos de Europa"), here in the Valencian Community. Both of these parties have included reference to our aims and objectives as regards the protection of property rights and the environment, with total respect for European law in their own electoral platforms. We very much regret that the Partido Popular has not made similar undertakings to our principal causes. Indeed they appear unwilling to make accommodations that would fully respect the relevant European laws or the proposed European Constitution which has very strong guarantees as regards, for example, property rights. Outside Spain, we have received explicit support from many British and European parties, notably the Conservatives, the Liberal Democrats, the Socialists, the Greens, etc.
Thus, apart from urging AUN's members and supporters to exert their democratic rights by voting in these elections, we suggest they review the party platforms and lists of candidates very carefully to determine where their own major interests lie and which parties would best represent those concerns within the European Parliament in Brussels and Strasbourg. As many will know – just as the Parliament will be examining the results of its recent fact finding mission to the Valencian Community to investigate abuses of the land laws - and it is important to recall that the Parliament is to have greater authority in those issues to which AUN attaches its highest priorities and which indeed are central to the well being of all citizens and residents of the newly expanded European Union. So as never before, the upcoming vote will be crucial to all of us.
Charles Svoboda
President , Abusos Urbanisticos No
"Abusos Urbanisticos No" (AUN) has been asked by many of its members and supporters for our suggestions as to voting for parties in the June 13 European Parliamentary elections. While, as a civic action association, we have chosen not to enter directly into political affairs, we have been able to obtain firm support from some of the parties contesting the European elections. Most notably these are the "Green/Socialist" alliance and the Bloc ( which will appear on the ballot paper under "Pueblos de Europa"), here in the Valencian Community. Both of these parties have included reference to our aims and objectives as regards the protection of property rights and the environment, with total respect for European law in their own electoral platforms. We very much regret that the Partido Popular has not made similar undertakings to our principal causes. Indeed they appear unwilling to make accommodations that would fully respect the relevant European laws or the proposed European Constitution which has very strong guarantees as regards, for example, property rights. Outside Spain, we have received explicit support from many British and European parties, notably the Conservatives, the Liberal Democrats, the Socialists, the Greens, etc.
Thus, apart from urging AUN's members and supporters to exert their democratic rights by voting in these elections, we suggest they review the party platforms and lists of candidates very carefully to determine where their own major interests lie and which parties would best represent those concerns within the European Parliament in Brussels and Strasbourg. As many will know – just as the Parliament will be examining the results of its recent fact finding mission to the Valencian Community to investigate abuses of the land laws - and it is important to recall that the Parliament is to have greater authority in those issues to which AUN attaches its highest priorities and which indeed are central to the well being of all citizens and residents of the newly expanded European Union. So as never before, the upcoming vote will be crucial to all of us.
Charles Svoboda
President , Abusos Urbanisticos No
Tuesday, June 08, 2004
THE ADMINISTRATION TODAY
With the launching of the official website of the Valencian Government, it is now possible to contact some 32 departments directly via Internet in order to deal with any problems that might arise. This is the latest Internet initiative by the Valencian Government that has already received eight prizes in three years for its innovations, and one of these was from the European union. The latest innovations to the official site allow those who log on to do everything from paying taxes to studying Valencian, including receiving details of the local government job offers via Email.
Thanks to Valencia Life Network for providing this useful article.
Comment: Let's see how we and other property owners, affected or otherwise by the Valencian Land Laws, can best use this site to further our aims.
With the launching of the official website of the Valencian Government, it is now possible to contact some 32 departments directly via Internet in order to deal with any problems that might arise. This is the latest Internet initiative by the Valencian Government that has already received eight prizes in three years for its innovations, and one of these was from the European union. The latest innovations to the official site allow those who log on to do everything from paying taxes to studying Valencian, including receiving details of the local government job offers via Email.
Thanks to Valencia Life Network for providing this useful article.
Comment: Let's see how we and other property owners, affected or otherwise by the Valencian Land Laws, can best use this site to further our aims.
