Public Competition in Post-Independència Catalunya

Camp del Ferro

This essay examines how the art of public competition functions when one of its most important competitors is absent. The suspension of policy-making within the Generalitat de Catalunya, following the region’s failed bid for independence, provided an almost unique opportunity to observe the strategic processes and limitations of the art of public competition. The optimistic finances of metro line 9/10 set the context, followed by analysis of the reactions of the city and metropolitan area of Barcelona to the Generalitat’s hiatus. That analysis exposes vast differences in the funding models of higher and lower tiers of Spanish government, which can be traced to the availability of externally-financed debt.

“Public Competition in Post-Independència Catalunya” is the third in a sequence of four essays titled, “The Art of Public Competition“, which together explore the competitive model underlying Spanish public transport. An anthropological analysis of the tension between this internal model and that of globalised economics, reveals the distortion of external finance on the internal workings of the art of public competition. The first essay in the sequence establishes the policy context for the liberalisation of public transport in Spain. The second explores the workings of the art of public competition using the example of interurban buses around Barcelona. The final essay ponders the strategic interplay of risk, debt and optimism, using the example of Spain’s high speed railway network.

Beyond Line 9/10

Like many of Spain’s regional Autonomous Community governments, the Generalitat de Catalunya’s initial reaction to the 2008 financial crisis was to maintain many prior expenditure commitments by borrowing, with debts rapidly rising from a baseline of around 8% GDP to around 35% of GDP by 2014. Roughly half this borrowing now occurs through the nation of Spain, using a mechanism called the “Fons de Liquiditat Autonòmic” (Autonomous Liquidity Fund, FLA) which allows regional government to borrow on broadly similar terms as the parent country, and thus benefit from Eurozone rates, which in this period were close to 0%. FLA funds come at the cost of fiscal autonomy, since the autonomous community’s plans for debt reduction must be approved by the Spanish government. The other half of the debt is sourced directly, commonly from commercial banks, which in Spain have traditionally had a strong civic investment function. The biggest single debt within the Generalitat’s total is that of Ifercat, the Catalan agency tasked with new public transport infrastructure: 4 billion euros of debt, roughly 5% of the Generalitat total. Half Ifercat’s debt is owned by the European Investment Bank, a non-commercial EU institution.

Aside from a 45 million euro project to rejuvenate the Lleida-Pobla de Segur railway, a line historically notable as the epitome of politicised infrastructure, Ifercat’s only practical project was Barcelona’s Line 9/10 metro route. Over-ambitious from the outset, both technically and financially, the “longest metro line in Europe” followed an all too familiar pattern of costs spiralling out of control in an environment of inadequate risk management. Ifercat pursued increasingly desperate funding mechanisms to keep their project alive in the face of the worst global financial crisis in a generation. Instead of using the private sector to mitigate construction risk, or using the private sector to deliver the desired transport system as a single build-and-operate concession, Ifercat sought short term liquidity simply to keep construction underway. And ultimately the money still ran out, leaving an incompete tunnel right in the middle of the route – a tunnel which is still inhabited by a pair of Tuneladores (TBMs) that haven’t moved since 2011. Such an incremental approach to funding inevitably led to poorly structured debt, notably creating many “hidden” liabilities, above and beyond the headline of 4 billion euros.

In 2014 Independents de Qui attributed Ifercat with another 1.8 billion euros of future guarantees to public companies, but that value transpires to be a fraction of the total additional liabilities: Between 2008 and 2010 batches of Line 9/10 metro stations were sold as 30-year concessions, typically to consortia of those companies building the stations, with the money raised by the sale ostensibly used to keep paying the builders to build those stations. The concessionaires levy an annual charge for providing and maintaining their stations – totalling around 250 million euros annually, an anticipated 7.6 billion euros in total. That figure seems infeasibly high, equivalent to the fare revenue of the entire Barcelona metro system. For context, in 2016 (including the first 10 months of passenger service to the airport) Line 9/10 conveyed just 4% of all metro passengers. The exceptional cost of these concessions is partly explained by concessionaires funding their initial purchases through commercial banking – the rates of such loans were inevitably less favourable than the Generalitat might have achieved itself, had it been able to raise the money through the FLA. This difference was accentuated by the political vacuum in the wake of the Catalan independence process: FLA finance reflected the overall stability of Spain, while the commercial loans of the concessionaires reflected the future ability of the Generalitat to pay the concession fees: Not only was the Generalitat less politically stable (and thus more risky) than Spain overall, but its Line 9/10 concessionary payments were somewhat less integral to the institution of the Generalitat, hence more risky, than Spanish bonds to the nation of Spain. Concessionaires consequently found themselves unable to refinance their debts, adding to the overall precariousness of the Line 9/10 finances.

Operator “Ferrocarril Metropolità de Barcelona”, Transports Metropolitans de Barcelona’s (TMB) metro, also carries a significant burden – in so far as it clearly identifies in its accounts, 75 million euros annually for leasing trains and a further 53 million in Line 9/10 “fees”. The lease presumably includes all the 9000 Series trains built for Line 9/10, in spite of only 28 out of 55 trains currently operating there, so presumably only half of the lease cost should be apportioned to Line 9/10, giving a total of 90 million euros annually. As documented in Interurban Buses in Public Competition, TMB‘s budget is managed through ATM, which is funded from roughly equal parts fares revenue and government support, with about half of that government support coming from the Generalitat. Such accountancy primary serves to shift the Generalitat’s past capital budgetary excesses into the current revenue stream, and in the process makes TMB’s metro look far more dependant on government support than it would be if it hadn’t been saddled with Line 9/10. That arrangement surely serves wider political agendas, but as we shall highlight later, TMB metro’s dependency on the Generalitat is broader than just Line 9/10.

Belatedly Ifercat (as the Generalitat de Catalunya) has been reduced to barter, trading land with the Ajuntament de Barcelona (the city government) to raise the money to complete a handful of stations on the Zona Franca branch. Line 9/10 was the final grand project of Jordi Pujol, who dominated Catalan politics through the “Olympic” Golden Age of the 1980s and 90s. However, post-Crisis, the Pujol agenda of grandiose (“pharaonic”) Catalan ambition evolved into a quite different hope of Catalan Independence, and for Pujol’s successors Line 9/10 became a slightly unnerving ghost from the past – albeit one still pending the traditional Spanish political exorcism called the corruption trial. The post-Referendum political hiatus in the Parlament de Catalunya stalled even the fig leaf of a new bid to the European Investment Bank for another 750 million euros to complete the central section of the line. However judging by his subsequent media appearances the holder of that fig leaf, Ricard Font, who is a common thread between many government transport interests within Catalunya, was not idle following the Generalitat’s fall from grace in November 2017. And he was not alone.

Herein lay the shifting sands of post-Independència Catalunya, an administrative void hitherto controlled regionally by the Generalitat, suddenly contestable, perhaps for the first time since the 1970s. While it is convenient to categorise the exercise of power through discrete organs of state, it is common for leading individuals to serve in many organisations. Indeed it is common for such individuals to shift between political, administrative and academic functions throughout their careers, in a way that, for example, the British civil service would not tolerate. It is therefore more instructive to understand the role of these individuals as an extension of Catalan society. Catalunya’s administrative institutions strongly reflect Catalan society, not least because they require their staff to be able to communicate in Catalá – which is not widely spoken outside Catalunya, so (for better or worse) affords substantial protection. At its higher echelons, Catalan society is virtual – where being seen to, to be in control of, these are the rewards – a monetary salary is almost incidental. The longer the Generalitat remained paralysed, the less important its civil service positions became within Catalan society, regardless of whether wages continued to be paid. And thus perhaps without even analysing their motivation, senior individuals within the Generalitat logically sought somewhat similar roles through other institutions. Given the pre-existing tendencies to switch and accumulate roles, their search was perfectly intuitive. That starts to explain why this sequences of essays is subtitled the art of public competition: For what at first looks like a power battle between institutions is far more subtle, far more human – and that in turn makes it harder to analyse and understand from an external perspective, especially an objective one.

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El Procés in 7 Photographs

Parliamentary Selfie

This photo-essay summarises the Catalan independence process by reference to seven photographs that trace events from the 11th September rallies to the aftermath of Catalunya’s December 2017 regional elections. This is a more accessible text than the original Patria and Patrimonio sequence, which started with The Act of Referèndum. This photo-essay also serves as a postscript, outlining the events in November, December and January. Continue reading “El Procés in 7 Photographs”

Patria and Patrimonio

Sant Llorenç de Montgai

“Patria and Patrimonio” is the third essay in a sequence that explores the current Catalan independence process. The first essay introduces The Act of Referèndum. The second, on hope, 1714 and All That. This essay characterises state.

In September 1923, Miguel Primo de Rivera, the Captain General of Barcelona, lead a successful military coup d’etat for control of the Spanish government. Spanish society had never recovered from the humiliation of the “Disaster of 1898“, not least the Catalans, whose textile industry had previously benefited from favourable trade with what had remained of the Spanish Empire – a policy that had done nothing to assuage the Cuban separatism at the heart of the Disaster. Primo de Rivera’s paternal dictatorship manifest a pragmatic economic nationalism, in which government gave to the “working” population only in so far as it did not take from the “landed” interests of the elite. An improvement on Cánovas’ policy of absolutist suppression, that had contributed to 1898, but ultimately insufficient to avert the rise of the Second Republic, subsequent civil war, and altogether harsher dictatorship of Franco.

The railways of Spain mimic her geopolitics. That’s as true today as it was when the centralist government of Isabel II first offered state support in 1855, explicitly for new railways emanating from Madrid. An imbalance between the centre and periphery redressed in the 1870s and 1880s by the gradual formation of a near-perfect duopoly of the two dominant railway companies: Centrally-focused MZA and more peripheral Norte. The exception of Andalucía from this duopoly is notable for suggesting the geopolitics of Spain are not quite as simple as centre vs periphery: Not just that the regionally dominant “Compañía de Ferrocarriles Andaluces” remained outwith the duopoly, but that its ownership so closely mirrored wider political history – from primarily French investors in the 19th century, to Catalans in the 1920s, before collapsing into the state in the 1930s. While Spain’s railways were built as commercial concessions (the profit from their operation expected to fund most of the cost of their initial construction), the materials shortages caused by World War One had pushed operating costs beyond revenue. The creeping nationalisation of Spanish railways, which had started at the turn of the century as state protections for the railway industry, was looking increasingly inevitable by the 1920s. Sufficiently inevitable that the Spanish state could engage in railway building without incurring the wrath of the elite, just not yet in the more commercial territorial cores of the centre and periphery. Enter the era of the Explotación de Ferrocarriles por el Estado (exploitation of railways by the state), and the Málagan engineer Rafael Benjumea y Burín, the Count of Guadalhorce.

Ostensibly aimed at integrating Spain’s railways, the Guadalhorce Plan of 1926 primarily fulfilled Primo de Rivera’s policy of building “economic” infrastructure, albeit only in so far as it did not impinge on the interests of the elite – a caveat that essentially excluded economically beneficial railway investment. The fatal flaw in Primo de Rivera’s economic nationalism was his inability to apply it to the most commercial areas of the Spanish economy, commerce indicative of economic (especially industrial) benefit, because such areas remained wedded to the untouchable landed elite. Primo de Rivera’s policy none-the-less established a precedent for the state to provide infrastructure for the people, even if that infrastructure serve almost none of its implicit economic function. Most evident in railway policy, but presumably true of wider communications including power, this precedent combined with the 19th century expression of (especially central) authority through railways, an absolutism vested in God: As explained in 1714 and All That, the idea of Spain maintains the external as a god in nature, so to this way of thinking, railways serve as the physical manifestation of the external. The contemporary AVE high-speed Spanish railway network is built thus: The external, a (Bourbon legacy) mirage of France’s TGV, physically manifest for the people of Spain with scant regard for economic performance. The radial AVE network was delivered geopolitically over three decades due to the immense cost of railway construction to an internal economy which is not as strong as its external ilusión portrays. For now, radial only, the traditional peripheral counter-balance temporarily lost in a quagmire of regional autonomies that struggle to stand together against the centre, evident from the Mediterranean Corridor. Prediction, of operating costs and revenues, little more than a charade for soon-to-be bankrupt international investors, the bane of operations in a culture that can only comprehend mega-project solutions to its operational problems, but not a philosophical tenant of the idea of Spain, and thus to misunderstand ilusión – a hope to be lived.

The Guadalhorce Plan’s most infamous project was a transversal railway from south to north – Baeza in Andalucía to Saint-Girons in France – avoiding all the major cities of Spain – Seville, València, Madrid, Barcelona. Economically and operationally, such transversal railways are difficult projects to justify, even in densely populated, highly industrialised countries – a rational nonsense for relatively agrarian Spain. Yet perfectly suited to the geopolitics of the moment. In the nature of ambitious construction proposals, the Baeza-Saint Girons project outlived its moment: The project persisted (with a break in the 1930s, when Guadalhorce was in exile) until Franco’s post-isolationist stabilisation plan of 1959, which briefly injected American economic “sense” into Spanish railway development, directing investment into the productive core of the railway network. The only section to have opened, Lleida to Pobla de Segur, a glorious white elephant – that with the greatest of respect to Pobla de Segur (population three thousand), goes nowhere that warrants the cost and capacity of a railway. Spanish enthusiasm for underutilised geopolitical transport infrastructure evidently predates the “ghost airports” of the early 2000s.

Left to the tyranny of post-Francoist Spain, RENFE (Spain’s nationalised railway company) would have closed the Lleida-Pobla de Segur railway as part of their 1984 route rationalisation, a Beeching-esk response to financial deficits. Apparently under pressure from local people to save the line from closure, the autonomous community stepped in. By operating subsidy since 1984, ownership since 2005, and complete control since 2015 – the latest notable for de-implementing European policy, a shift in policy focus from national to regional, an unintended acknowledgement that the line’s original cross-border ambition was over. In addition to paying an operating subsidy of almost 2 million Euros a year, between 2006 and 2016 the Generalitat de Catalunya (the government of Catalunya, via its railway subsidiary FGC) invested 45 million Euros in the route, including a pair of new trains – which subsequently improved frequencies and patronage, albeit from a pitifully low base: Average daily passenger journeys (factoring in occasional tourist trains) had fallen as low as 200, strongly skewed to the short southern section between Lleida and Balaguer.

The epitome of politicised infrastructure, the very manifestation of the geopolitics of Spain, the Pobla de Segur railway was surely destined to illustrate the Generalitat de Catalunya’s publicity for the Act of Referèndum. The sidings at Sant Llorenç de Montgai station repurposed under the banner, “you were born with the capacity to decide – will you give that up?” With little visual pretence of neutrality, indicative of the politicisation of Catalunya’s principle civil institution, the citizen of the upcoming state of Catalunya is presented with a choice between the straight track ahead and the siding to the right. Humorous deceptions all: The straight track continues to Pobla de Segur, as close to nowhere as Catalunya’s railway network goes. The sidings have been airbrushed to show just one, avoiding any suggestion of the plural reality beyond. And not one of the two trains is in sight, the impending “choque de trenes” (socio-political train crash) left in the eye of the beholder. With specific historical context, the poster represents the perpetual geopolitical struggle that is Spain. Without, the enticing vision of a future on an empty set of railway tracks, reveals much about the relationship of people and state.

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1714 and All That

Collioure, Catalunya Nord

“1714 and All That” is the second essay in a sequence that explores the current Catalan independence process. The first essay introduces The Act of Referèndum. This essay characterises hope.

As if to confirm his opinion, newspaper columnist Gregorio Morán was fired for decrying the sponsorship of the Catalan media by the independentist cause: In the Brave New Catalunya, state sponsored freedom would seem to have no place for freedom from state. While Morán’s fate was extreme, the loss of plurality that stems from the Act of Referèndum is undermining the very trust and stability normally promoted by the human biases of Catalunya’s social structure: Where the employment is substantially based on who you know (and high structural unemployment makes meaningful roles in society especially scarce for the minority), and sometimes being seen to do can count for more than actually doing (which gives rise to institutionalised virtue signalling), people need the space and respect to disagree. Without that plurality, tensions build between the individual and their tribe. Human decorum engenders a culture of agreement – real and imagined – or defaults to unhealthy silence. The resulting state is ambiguous. No place in Catalunya for the lively doorstep debates common in pre-referendum Edinburgh, nor for the inclusive plurality of “Scot”: Catalan is increasingly analogous to Independentista, a dangerous rift within Catalunya herself.

Such ambiguity is not universal. At the core of the independentist movement lay a heartfelt belief, an intensely directed hope, as genuine as any. Even a life-affirming sense of purpose, a contribution to community of the sort that individualism undervalues. But Vilanova does not a country make. Independència was not born of Barcelona, yet the city’s size, stature, and seat of government make it crucial to the success of an independent Catalunya. The reality of Barcelona is rather more ambiguous than the stage-managed revolution conveys. Altogether less discursive than the passive student protests, those characterised by their sitting. The rise of such ambiguity in Catalan society runs counter to the moderating influences of both modern Spanish democracy, whose suffrage is individual, and traditional Spanish absolutism, for which ambiguity is its indeterminant opposite. The Referèndum may indeed have crippled Catalan plurality by mooting the idea of leaving Spain from within Spain, but the Referèndum is also the only force keeping the “lid on the pot” of its culinary creation, preventing the social ambiguity that is more commonly called chaos from spilling out. While there is still hope for el procés, the Referèndum exerts direction (both in time and active control). Without that hope, both cause (lack of plurality) and effect (ambiguity) dissipate – as if to wake from a dream. Such a romantic description of what immature societies resolve in barbarism rests upon the inherent strength of the collective “il·lusió”: The “ilusión” of the idea of Spain as both the perpetual internal rebalancing that sustains it, and the collective management of hope. Time as oscillation and time as direction. These concepts will become clearer over the course of this essay.

A historic review diagnoses the Catalan independentist with either interminable optimism or acute amnesia: Throughout the five centuries of Spain, Catalunya’s epicentre, Barcelona, has hosted innumerable attempts to cede from, or otherwise destabilise, Spain. That none has succeeded in independència, even when directly comparable revolts in less intrinsically Spanish territories (such as the Netherlands) have, should bare consideration. That it does not, hints at the deeply internalised nature of this struggle, in which the attempt to separate gives unity to that which is being separated. This inherent tension between Spain and its constituent provinces is impenetrable because it is wrapped up in the idea of Spain. Impenetrability that substantially defined empire, from the Genoese bankrolling of Habsburg Spain on the seemingly endless riches of the Americas, to the prevailing model of colonial allegiance, which presented the Spanish monarch as an external god – something that endured until the Napoleonic era crisis heralded the coming fall. Since the empire was born of the same 1490s Golden Age that formed Spain, it seems reasonable to conclude the same principles were integral to the very idea of Spain, although the post-hoc nature of creation history clouds such analysis.

Castellano’s “ilusión” shares the same Latin root as English “illusion”, but their emphasis differs significantly: English illusions are empirically false, occasionally with an intonation of failed optimism. Castellan ilusión describe the positive hope for the good, both imaginary and realised. As does Català’s “il·lusió”. Language expresses culture. That hope, change over time, is deeply embodied in the way we sense the world. Sense, another word that is too readily mis-translated. A timely reminder of the difficulty of describing one culture through the prism of another.

Since unfettered ilusión is a plague, a cancer, prone to killing its host, ilusión must be maintained in an independent, but independently unchallengeable, ideal. The first is easily externalised: France, for example. As in the Bourbon dynastic desire to build Spain in the image of France. The philosophically difficult counter is to ensure this local ideal of France cannot be challenged by a Frenchman. Perhaps it is because ilusión are inherently temporal (aspiration of change in the not-now), that the vector called time is not also able to relate (and hence resolve) the actual basis for the ideal to the ideal of the ilusión, as we have come to expect in more mundane matters of entropy. I will call this contention the Quintradian perspective (named because it implies some abstract fifth notion of relation, beyond singular space-time): The simultaneously different perception of precisely the same thing by different groups, whose mutual perception bounds and binds the group. The Frenchman (to continue the example) who actually knows France can never be in the group that holds France in ilusión, because then they would not actually know France – at best they would hold two presumably somewhat contradictory understandings in their head, loose semblance of true belonging to either group, and thusly know nothing about “France” with certainty. Critically, at no point can they definitely challenge ilusión. Therein is the bedrock of a nation – and the bane of the supra-nationalism implied by globalism, there being no other globe on which to base human ilusión.

Much like the English, the Catalans reference the foundation of their contemporary autonomy to a year in which they were crushed by “the French”. English schoolchildren are traditionally indoctrinated with the idea that England starts at the Norman conquests of 1066 – even though another 150 years pass before the Battle of Lincoln demonstrates as much cohesive autonomy as Æthelstan had enjoyed in the century before the Normans. This method of teaching was parodied in “1066 and All That“, a book neatly summarised by its own subtitle: “A Memorable History of England, comprising all the parts you can remember, including 103 Good Things, 5 Bad Kings and 2 Genuine Dates.” The myth that modern England started as a Dutch coup in 1688 is somehow less appealing to the English, yet would reflect much the same succession crisis (and corresponding adjustment of power) that Catalans celebrate in the 1714 fall of Barcelona, which ended the War of the Spanish Succession. A loss still cited as illegitimating Spain’s rule over Catalunya. Not for the last time in history, Catalunya found herself on the losing side of an internal Spanish conflict.

Hope is especially important to both, as both are managing the failure of hope that is the inevitable fall from the over-achievement of global empire. In this regard Spain, of which Catalunya is part, is the most advanced nation in the modern world: A century ahead of Britain, the Británicos’ interest in Spain should not be limited to the beach, or whatever the Olympic-tinted Barcelona guidebook instructs about Gaudí-land.

Superficially, the Catalan hope of the Referèndum is familiar to Brexit Britain: Catalans blame Madrid (meaning Spain), much as Brexiteers blame Brussels (meaning the similarly ambiguous “Europe”). Those that enjoyed the good times before the crisis of 2008 quite reasonably expect more of the same. Since the need to feel hopeful necessarily obscures self-analysis of past excesses, righteous indignation at the loss of the good times can all too readily be channelled into cannon fodder, killing “two birds with one stone” by the redirection of domestic tumult onto geopolitical opponents. The Catalan Bourgeoisie, at least for the moment, are simply better at controlling this game than the British Establishment. Similarly the risks of transitional instability are downplayed: Catalunya’s gentle October waltz into internationally-recognised statehood can look, to the neutral observer, just as implausible as Britain’s just-add-water “Empire 2.0” post-European economy. Cynically, such transitions serve only to create new low-points from which things can only get better. Again.

Comparison is actually far more difficult because of differences in temporality: Contemporary England (and to a lesser degree Britain) can be accused of living in a collective memory of past imperial glories. Britain’s causal analytical model affords protection from the external world by the prediction (increasingly to the point of insanity) of that which it thinks it can understand. A predictive process that references both past and future, which when faced with a particularly uncertain future, is prone to emphasise the certainty of the past. Quirky, Britain shares enough Hegelian temporality with its Northern European neighbours to lull it into the false assumption that the whole world thinks the same way. Catalans within Spain do not revel in quite the same temporal distortion: Catalunya could happily emphasise its successful expansionist medieval history. Alphons centred the Crown of Aragon on Barcelona in 1164, and over the next three hundred years Aragon grew to dominate the Western Mediterranean, before the union with Castille that lead to the formation of Spain, which became the world’s first super-power. An impressive ancestry. That instead Catalunya chooses to emphasise its subsequent struggle with Spain, is not just indicative of the inherently internalised struggle for and against Spain, but that hope has to be actively lived, not just remembered. Wrapped in the idea of Spain, (internal) ilusión is passively protected from the external factors of which there is little or no native understanding.

What liberates hope internally is also the bane of hope externally. The idea of Spain necessarily presents the external as a god in nature (a form of deus sive natura), so the Catalan independentist journey to the promised land is no mere metaphor (although, as in all matters of religious belief, such exposition risks insulting believers). The corollary, the internal liberation of hope – the bouncy castle called Spain – creates a vastly more robust play space than expected by the purely predictive. The people of Spain widely acknowledge the impending “choque de trenes”, the socio-political train crash, but there is no rush to prevent it because the consequences are understood to be internal – entirely a part of the fluidity that is Spain. Tears before bedtime there will be – but should a nursery be devoid of toys, just because they get broken from time to time?

Continue reading “1714 and All That”