Legal framework for $6-billion BCN World agreed between Catalan Government and Socialist Party

Barcelona (ACN).- The Centre-Right Catalan Nationalist Coalition (CiU) – which runs the Catalan Government – and the opposition Catalan Socialist Party (PSC) - which does not support the self-determination vote – have reached an agreement on the new legal framework to develop the macro-resort BCN World, which is to be developed in Salou, next to PortAventura’s amusement park in the Costa Daurada. This initiative was initially disclosed in September 2012,  just before Sheldon Adelson announced he was choosing Madrid to build Eurovegas, although in the end Las Vegas Sands abandoned the project. However, BCN World, promoted by Veremonte, is carrying on and has already announced some of its international partners, such as Spanish hotel network Melià, Chinese casino company Melco Casinos and UK shopping corporation Value Retail. The $6-billion BCN World is supposed create some 17,000 jobs (direct and indirect) and will have mega-casinos, hotels, golf courses, luxury shops, conference centres, theatres, beach clubs and residential areas, among other attractions. However, in order to attract the rest of the investors needed, define all the project’s details and start its construction, the relevant legal framework has to be upgraded, particularly the legislation on gambling and the area’s town planning rules. Veremonte has only disclosed a few details of the project and has publicly made it clear that it was waiting to have all the administrative requirements cleared and adapted to the project needs in order to close the deals with the last investors. The agreement was finally signed on Sunday in Tarragona (near Salou) between the CiU leader and President of the Catalan Government, Artur Mas, and the PSC’s Secretary General, Pere Navarro.

Finally, after months of talks, the CiU has closed a deal with the PSC, instead of doing it with its regular parliamentary partner, the Left Wing Catalan Independence Party (ERC), with whom it is driving forward the self-determination agenda. The most left-wing parties directly opposed the project, which they considered “speculative”, saying it would not bring quality jobs, while the CiU  supported it openly and the ERC, the PSC and the PP said they might support it, but only under certain conditions. The CiU considered the ERC’s conditions excessive and thought they might have endangered the investment. At the same time, the ERC insisted that Veremonte had offered little information on the exact details of the project and is fearful of the social consequences of the gambling activities. The  Conservative People’s Party (PP) had also told the CiU about their intention to agree on the new legal framework if their conditions were met.  However, in the end, Artur Mas preferred an agreement with the PSC rather than with the PP, which runs the Spanish Government. The agreement between the CiU and the PSC goes beyond BCN World, also fostering re-industrialisation policies in order to bolster the Catalan economy. Now, the new legal framework will be approved by the Catalan Parliament in the coming weeks and the new urban planning guidelines should be issued in some 10 months.

An agreement coming after months of debate

Over the last year, Catalan parties have been analysing the BCN World project and debating how to reform the affected legal framework. The initiative required a reduction in the tax on gambling from the current 55% rate to 10%, as well as additional measures, such as whether gambling on credit or  access to casinos for minors should be allowed. In addition, a substantial modification of the town planning guidelines of Salou and Vila-seca’s Tourist and Recreational Centre (CRT) was needed. This CRT plan manages the urban aspects of PortAventura and the surrounding land, with regard to issues such as land use and the area allocated for construction.

The Catalan Parliament created a committee to debate and analyse the project and its impact on the economy and society. The work of the parliamentary body lasted a few months and independent experts spoke before the committee, as well as Veremonte representatives. However, some parties complained about the lack of information on the project details and the social problems associated with gambling. The Catalan Government and Veremonte insisted that details could only come once all the investors had committed the money and the final project was totally defined. In addition, they insisted on the need to carry on discreet negotiations without disclosing possible investors’ names until the deal had been closed.

The CiU-PSC agreement

Last week, political parties were saying that the definitive agreement was close but a few details were still pending. The Catalan President, Artur Mas, and Pere Navarro, had lunch together on Thursday, their first bilateral meeting in several months. At the weekend, the final agreement was announced and Mas and Navarro signed it on Sunday in Tarragona. Artur Mas emphasised that BCN World will contribute to strengthening “Catalonia’s tourism leadership” and to creating “thousands of jobs”. In addition, he insisted that the new legal framework will be “clear and transparent” and will foster “good practices”. Mas also pointed out that gambling only represents a small part of the project, which is mostly oriented towards family and convention tourism. The PSC admitted that “the negotiation had been long and complex”. Pere Navarro told the Catalan President that “when you and I talk and reach agreements, Catalonia goes forward”, a statement that might refer to other issues beyond BCN World.

In order to close the deal, the PSC finally accepted a reduction in the rate of the tax on gambling from 55% to 10%. The measure will be applicable for all casinos in Catalonia, not only those of BCN World. However, the new law includes a clause stipulating that if the revenue coming to the Catalan Government does not reach the level currently brought by this tax with the current rates – which represented €17 million in 2013 – the industry will compensate and pay the difference. Furthermore, the new law provides that 1% of the total investment will go into a fund that will develop social projects in the area and will also develop prevention programmes against gambling addiction. Regarding the urban planning, a maximum of 30% of the affected 825 hectares will be for casino, hotel and residential use. The construction area will go from the current 500,000 square metres to some 2,475,000 square metres.

Apart from this, the agreement includes 20 measures regarding Catalonia’s industrial policies intended to foster the country’s re-industrialisation and strengthen the economic recovery. Some of the additional measures are promoting the National Pact for Industry, offering more loans for private companies and issuing a programme to help those young Catalans who had to leave the country looking for job opportunities to come back. On top of this, the agreement also prioritises the Mediterranean Railway Corridor, as well as the railway connections in international standard gauge between Barcelona and Tarragona Ports and the French border.