Friday, June 24, 2011

NY Times: Overbuilding in Spain

by Bill McBride on 6/24/2011 05:31:00 PM

Oh my ...

From the NY Times: Overbuilding in Spain Leaves Many White Elephants

Last March, local officials inaugurated a brand new airport in Castellón, a small city on Spain’s Mediterranean coast. They are still waiting for the first scheduled flight.
That made me laugh ...
Castellón Airport, built at a cost of €150 million, or $213 million, is not the only white elephant that now dots Spain’s infrastructure landscape. ... Across the country, nearly empty toll roads are struggling to turn a profit. Other projects are surviving only with continued public financing ...
This sounds like a classic bubble attitude: "Build it and they will come". Just a reminder that during a bubble, every project seems to make sense ... on paper.

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