Spain plans $23 bn investment in rail, road projects

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IANS/EFE | 09 Apr, 2010
The Spanish government plans to launch transportation projects valued at 17 billion euros ($22.7 billion) over the course of this year and 2011, Prime Minister Jose Luis Rodriguez Zapatero said Wednesday in introducing the Special Infrastructure Plan, or PEI.

He touted the PEI's "innovative focus" on public-private partnerships and said the plan includes mechanisms to ensure against cost overruns.

By the end of 2010, Spain will overtake Germany as the European country with the biggest road network and surge ahead of France to become the continental leader in high-speed passenger rail, the premier said.

The PEI will not add to Spain's deficit, Zapatero said, because the initial outlays will come from the construction firms, operators and financial institutions involved in the projects.

In return, those companies will receive a share of the profits beginning in 2014.

The projects vary in size and scale, meaning that small- and medium-sized firms will get the chance to participate, the prime minister said.

Zapatero said the PEI is only possible due to the "capability and professionalism of our companies, as well as the solvency of our financial system", which has fared better those of other rich countries in the global crisis.

Another 35,998 people were added to Spain's unemployment rolls last month, bringing the total number of jobless to a 14-year high of more than 4.16 million, the labour and immigration ministry said Tuesday.

Unemployment has grown for eight consecutive months, and by 561,221, or 15.7 percent, over the past 12 months amid the country's worst recession in decades.

Spain's unemployment rate stands at 18.8 percent and is forecast by the central bank to peak sometime next year at 19.7 percent.

Job creation will not start until the "final quarters" of 2011, the Banco de Espana said last week in a report on the economic outlook, predicting the economy will contract by 0.40 percent this year.

The central bank is forecasting economic growth of 0.80 percent for 2011, a figure that is one percentage point below the government's forecast.

Wages, meanwhile, are expected to experience "a very notable slowdown" in 2010 of up to 1.5 percent and a drop of some 1.4 percent next year, the central bank said.