End of journey for quixotic airport project which led to collapse of local bank

In the land of Don Quijote, where windmills whir among olive trees on dusty scrubland, stands a giant white elephant that would have made the chivalrous wanderer tilt in terror.

The only flights out of Ciudad Real airport these days are by hawks and falcons that soar above the rabbits scampering across its desolate 4km runway. A gangway that extends optimistically from its state-of-the-art terminal building towards the nearby high-speed rail track ends abruptly in mid-air like an amputated limb while the train itself whizzes past.

The airport, 180km south of Madrid, opened in 2008 at a reported cost of up to €1.1 billion. It closed less than four years later, one of many grandiose infrastructure projects built during Spain's boom which later proved unviable.

ExpandAutoplay

Image 1 of 3

A partially complete walkway which was due to link Cuidad Real International Airport with an adjacent train station.

The region’s savings bank, which held a 68 per cent stake in direct and indirect investment in the airport, had also collapsed. With no irony intended, its owners called it Don Quijote airport. Now the quixotic project has been renamed Ciudad Real Central.

With a runway long enough to land the world’s largest airliner, an Airbus 380, and built to accommodate 10 million passengers a year, Ciudad Real airport was supposed to bring more than 5,000 jobs to the area.

'Wildly inaccurate'
But all projections proved wildly inaccurate. The maximum number of airport employees was only ever about 300, most of whom were quickly laid off as annual passenger numbers never exceeded 54,000.

The only activity the airport has seen since was earlier this year when the BBC's Top Gear filmed its presenters racing cars on the closed runway.

Now, following a decision in August by a judge handling the administration of the bankrupt airport company, the facility is for sale for just €100 million – a bargain if the buyer didn’t also have to take on its €529 million debt to airlines, savings banks and to residents whose land was compulsorily bought to make way for the project.

When a local construction magnate came up with the idea for the airport in the 1990s, Spain’s 17 regional governments were pouring public money into such trophy schemes.

"They were all competing, building absurd things that never made any sense but ended up costing the people," says local journalist Carlos Otto. "We are a town of only 76,000 people – it was never going to work." Ciudad Real already had its high-speed rail link to Madrid, a journey that takes 50 minutes.

The airport was in name a private venture but the investors behind it had no problem getting political backing from Castile-La Mancha’s then-Socialist government.

It gave subsidies to attract airlines and, crucially, because political appointees sat on the board of regional savings bank the Caja Castilla La Mancha (as was the case with all of Spain's cajas before their collapse), getting the bank to invest in such a scheme proved easy. In theory, however, the cajas were non-profit bodies supposed to reinvest profits in the regional economies.

Between the 31 per cent stake the caja itself bought, and the further 36 per cent it ended up with when borrowers failed to repay loans they took out to buy shares, Caja Castilla La Mancha became the first of many regional savings banks to be bailed out by the Spanish government.

“Ciudad Real airport was the most spectacular raid on public money ever in Castile-La Mancha,” says Otto, who at the time was one of few voices to be heard protesting against the scheme.

Crisis or no crisis, he says, the airport would never have been viable. “I’m convinced the investors knew. The profit from this airport came from the building of it. What happened was that a small number of business people enriched themselves” knowing that the government was going to subsidise the venture, he says.

The official bankruptcy report appears to support this view: “The loans taken out were enough to cover the construction phase but no thought was given to the investment needed to make the airport function as a business,” it states.

“The construction itself of the airport provided the first profit for the investors because they signed contracts with their own construction companies.”

Other dissenting voices came from environmental group Ecologistas en Acción. Local member Rafael Ubaldo, who teaches geography at Ciudad Real University, says the lobby group won a mitigated victory by challenging the plan at EU level and forcing the airport company not to build, as intended, on a special area of conservation.

“It was a bizarre situation. They decided that Ciudad Real needed an airport inside the protected zone, and at the same time they were getting EU grants to conserve the protected zone.”

To speak out against the airport back then was to incur the wrath of the community, says Ubaldo. “We were seen as anti-progress. Now people see what madness it was.”

Among those people is 34-year-old María Isabel Calle, who sells fruit and vegetables at the market in central Ciudad Real.

'Fooled'
"We were all fooled," she says, organising colourful rows of peppers at her stall.

“They promised jobs for young people. It was a lie. All that happened was the rich got richer.”

Across the way, fruit-seller María del Pilar Calle Garcia (47) says there was never any need for the airport. “We’re already well served with the Ave [high-speed train] for Seville, Madrid . . . it was such a lot of money for no return.”

The Partido Popular is now in power in Castile-La Mancha and accuses its Socialist predecessors of wasting millions. The exact cost of the airport is still unclear. Estimates vary from some €400 million to €1.1 billion.

Both the town hall and chamber of commerce say they no longer have any links to the administration that oversaw the airport and so no one can speak on the subject.

“I’ll tell you how it is,” says taxi driver Jésus, who would give only his first name because “I still have to deal with these people”.

“That airport was all artificial, all a fraud. When the grants stopped, it all collapsed. None of those companies could have functioned there without subsidies. You can land there with the biggest plane ever. It has the biggest runway in Europe. And now look at it – rabbits hopping across it.”

SPAIN'S OTHER WHITE ELEPHANTS

Ciudad Real airport is no isolated case but one of a herd of white elephants that testify to the follies of Spain's construction bubble. Castellón-Costa Azahar airport in the east of the country opened in 2011 at a cost of €150 million with no airlines signed up and no licence to operate.

It has yet to see a commercial flight.

Valencia’s City of Arts and Sciences, designed by local architect Santiago Calatrava, has been highly criticised for both its design and budget overruns (nearly three times the original estimate of €300 million).

And now Madrid’s regional government is hoping to host the €10 billion Eurovegas, Europe’s biggest casino and conference centre, which critics say will merely see history repeat itself.

US casinos billionaire Sheldon Adelson (80) is behind the project, which promises to create tens of thousands of jobs and draw big investment to the area. It is planned for Alcorcón on the outskirts of the capital. While questions are being raised about the financing of the scheme and the legal framework underpinning it, Adelson says the deal will not go ahead unless the government changes its tobacco laws to allow smoking in his casinos. As yet, there are no plans to change the law.

The threat prompted Madrid’s regional president to warn that not meeting Adelson’s demand would result in the region losing the project, which includes a replica of New York’s Times Square.

Anti-gambling campaigners, anti-capitalists, environmental groups and Catholic Church representatives oppose the scheme, saying the benefits promised will not materialise. They claim that although Eurovegas is a private venture it would nonetheless cost the public both financially and ecologically, in terms of infrastructure link-ups and pressure on the area’s water supply.