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Serving the private good through legal manoeuvrings

Urban mega-projects and state-mediated dispossession in Madrid
Nina Margies

Abstract

Urban mega-projects are commonly deemed a symbol of public-private alliances where redistribution of public money into private hands is common practice. They tend to be great platforms for strategically positioned companies in the private sector to place their services and maximise profits. Such dispossession processes are often actively orchestrated and backed by the state. Theorising through the concept of accumulation by dispossession, this article undertakes a closer examination on how these processes are arranged. Of special interest will be the role of state actors and the way they use legal manoeuvrings in organising dispossession. Using the example of Madrid´s large-scale riverfront regeneration, the analysis reveals how the local government made use of their monopoly of legal power by altering, circumventing and ignoring legal regulations to the benefit of certain economic actors in the private sector while at the same time dispossessing the larger urban population of (future) public spending.

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The author would like to thank Michael Edwards, Luis Felipe Alonso Teixidor, Ramón López de Lucio, Hannah Schilling, Christiane Ivic and both reviewers for their enriching and valuable comments.

Introduction

1In fierce competition with other cities, city governments are increasingly relying on large-scale urban development projects to attract global capital (both financial and human), stimulate economic growth and embellish the city’s image. Typically, today’s critical urban discourse identifies large-scale projects as key factors behind growing inequality and socio-spatial fragmentation. They are therefore often described as the material expression of neoliberal and post-political tendencies in contemporary urban planning (Swyngedouw et al. 2002, Gualini and Majoor 2007).

2One of the major criticisms of urban mega-projects centres around the structural change in public policy and the shift from Fordist redistribution strategies towards a neoliberal agenda dominated by the aims of economic growth and urban competitiveness (Gualini and Majoor 2007). Governance structures set up to manage and implement developments favour private over public interests and are, as a general rule, shaped by a network of exclusive political and business elites (Moulaert et al. 2005, Díaz Orueta 2007). In this regard, urban mega-projects can also be seen as sites of capital accumulation and dispossession. They serve as a pretext to legitimize privatization of public land and commons, can lead to displacement through gentrification or imply the redistribution of public money to the benefit of certain economic actors in the private sector.

3However, much of the literature on large-scale urban development projects lacks detailed empirical evidence on how state and economic actors organize such dispossession processes. A closer look is needed at how the redistribution of wealth from public into private hands is orchestrated and what kinds of mechanisms are used in order to do so. The purpose of this article is hence to contribute to a better understanding of how mechanisms of dispossession are put into practice. Special attention will be paid to the role of the state and its monopoly of defining legality. David Harvey’s notion of accumulation by dispossession (2003) will serve as a starting point for reflection complemented with recent work by Levien (2013) and Alexandri and Janoschka (2017) that helped to extend and sharpen the notion’s political dimension.

4The analysis will be based on the example of one of the largest urban projects in Madrid’s recent urban development: the regeneration of its riverfront. Since the 1980s, the city’s river Manzanares has been lined with a busy motorway, the M-30, which runs along both riverbanks. Almost 20 years after its construction, the city decided to recover its river and take parts of the urban motorway underground in order to convert the freed-up surface into a new urban park. Given its magnitude and impact the project triggered a considerable controversy about the seemingly authoritarian decision-making process, the circumvention of existing legal regulations, the financial compromises made by the local government to maximise corporate gains and finally the tremendous debt hole it left in the city’s budget. Against this background, the riverfront regeneration will serve as a key example of how public money has been used in Madrid (and elsewhere in Spain) for the benefit of private companies. Furthermore, it will unravel the legal mechanisms used by the state that helped push the project though at whatever cost and to the benefit of the private sector. These practices that entail altering, circumventing and ignoring legal regulations can be theorised as dispossession by legal manoeuvrings.

5The research draws on a combination of empirical data collection and secondary material analysis. The aim was to gain a deeper understanding of the complexity and controversy the project entailed. Qualitative in-depth interviews were conducted with a range of societal stakeholders that were in some way involved in, affected by or (critically) engaged with the project. To do justice to the diversity of opinions and perspectives, interview partners were chosen from five different fields: 1. Local authorities, 2. Citizen groups and activists, 3. Urban scholars, 4. Practitioners and 5. Local residents and business owners. A total of 24 interviews were conducted and interviewees were chosen for their role as key actors either in the project´s direct planning and design process or within its public contestation. Apart from semi-structured interviews, the method of the political discourse analysis was used to elucidate the various narratives, claims and arguments that were made by political and societal stakeholders in relation to the project and therefore a range of planning and policy documents, newspaper articles, blogs, websites, flyers and video material was analysed. To complement this analysis, two conferences and a 5-hour guided tour along the river hosted by the City Council was attended in order to find out how urban planning in Madrid was presented in general and the specific case study in particular.

6The article will first elaborate on the concepts of (primitive) accumulation and accumulation by dispossession with a particular eye towards elucidating their political dimension. This is then linked to the debate around urban mega projects before it addresses the local specificities of Madrid and its state-led mega projects. Against this background, the article will then turn to the analysis of the selected case study. It will start by examining the political decision-making process and discourse of justification/legitimisation by the local government and then move on to identify the fraudulent political arrangements and legal manoeuvrings that were put into practice. It closes by pointing to the important issues of redistribution of wealth from public to private hands.

Accumulation by dispossession and its political dimension

7Dispossession has been a constitutive feature of the socio-spatial transformations engendered by colonial, post-colonial and neoliberal political economies” (Levien 2013: 281).

8(Primitive) accumulation and dispossession continue to be important processes that shape our political, economic and social life to this day. Their theoretical discussion beginning with Luxemburg and Marx via neo-Marxist debates to today’s broader definition recognizing different forms of extra-economic conditions help therefore in understanding contemporary (global) transformations.

9Historically understood as a transformation of capitalist social relations, (primitive) accumulation implies a shift in property rights and ownership that generates a process of proletarianization (Marx 1967). In constant need of expansion, coercive dispossession creates the conditions for further capitalist appropriation in form of assets, land or labour power. Promoted or backed by the state this led to the geographical crusade of capitalism into the non-capitalist periphery opening up ever-new territories for investment (Luxemburg 1951).

10With David Harvey’s notion of “accumulation by dispossession” (2003), the concept of (primitive) accumulation underwent a modernisation process. He removed it from the context of colonial regimes and imperial order and embedded it in today’s globalised and financialised economy. To overcome the constant problem of capital surplus, accumulation by dispossession, he argues, has become the dominant form of capital accumulation (Harvey 2003: 153). There are two ways, in which accumulation by dispossession operates: either by releasing “a set of assets (including labour power) at very low (and in some instances zero) cost” so that “overaccumulated capital can seize hold of such assets and immediately turn them to profitable use” (Harvey 2003: 149). Or by devaluating “existing capital assets and labour power” that “can be bought up at fire-sale prices and profitably recycled back into the circulation of capital by overaccumulated capital” (Harvey 2003: 150). Whereas historically primitive accumulation was identified as a phenomenon that was expanding from the core into the periphery (Marx 1967, Luxemburg 1951), Harvey points out that the Global North is now equally affected. Neoliberalism and with it privatization had found their way into the European and American world by the end of the 1970s. Privatization as “the cutting edge of accumulation by dispossession” (Harvey 2003: 157) led to a situation where “assets held by the state or in common were released into the market where overaccumulated capital could invest in them, upgrade them, and speculate in them” (Harvey 2003: 158). It has been used as a way of redistributing assets and transforming social relations in favour of the upper classes.

11Harvey’s definition of accumulation by dispossession, however, is rather limited to its economic dimension and “under-theorizes the deeply political role of states in orchestrating dispossession and the implications that follow from this” (Levien 2013: 382). There is an increasing body of literature that highlights the vital role of state power and argues in favour of explicitly incorporating the political dimension into the concept of dispossession (cf. Glassman 2006, Levien 2013, Alexandri and Janoschka 2017). Capital accumulation, it is claimed, cannot be achieved by economic actors only but will always rely on state intervention. By using its monopoly of violence and legal power, market forces “that will be mobilized are clearly produced in part through ‘extra-economic’, political ‘interventions’” (Glassman 2006: 620). Levien therefore suggests a redefinition of Harvey’s notion of accumulation by dispossession as “the use of extra-economic coercion to expropriate means of production, subsistence, or common social wealth for capital accumulation” (Levien 2013: 401). According to him, political and ideological parameters determine the outcome and the character of dispossession. Given their variation over time and space, he therefore suggests to think of regimes of dispossession by which he means “socially and historically specific constellations of state structures, economic logics tied to particular class interests, and ideological justifications that generate a consistent pattern of dispossession” (Levien 2013: 383). In a similar vein, Alexandri and Janoschka in their article on the restructuring of housing markets in Greece and Spain elaborate two novel concepts that help to better understand the political facet of dispossession in the aftermath of the economic crisis. Through a comparative gesture they illustrate how by financial mechanisms Greek state actors paved the way for dispossession by odious taxation, whereas in Spain “deliberate action of political elites to secure unfair and unlawful gain for certain economic actors” (Alexandri and Janoschka 2017: 11) lead to what the authors label dispossession by political fraud. Both approaches contribute to advancing the analytical framework of accumulation by dispossession and will be referred to throughout the analysis of this article.

Urban Mega-Projects and State-mediated Dispossession in Madrid

12Even though much of the literature dealing with dispossession by extra-economic means is embedded in the context of housing and land grab, being aware of the political dimension is of no less importance in the debate around and analysis of urban mega projects.

13In the European post-war city, large-scale urban development projects served to reconstruct the city by means of infrastructure and large public housing projects. They were embedded in the “tradition of modernity [and often] based on the ideal of democratizing society and distributing a ‘fair share’ of their benefits” (Lehrer and Laidley 2008: 788). The Fordist state was a key promoter of investment and development projects. Yet, its strong presence led to criticism: the conservatives complained about the state interfering in the market and the left about the state adopting authoritarian traits (Díaz Orueta and Fainstein 2008: 759). In particular, the common practice of dispossession by displacing millions of households but also the megaprojects’ destructive ecological impact gave cause to rising protest leading to their regression.

14In recent years, however, large-scale urban projects have experienced a revival. With the over-accumulation crisis and rising neoliberalism, the push for economic development and growth to keep pace with the global competition has become the basis on which the socio-economic and physical restructuring of cities is being justified (Moulaert 2000). Urban mega-projects came to be seen as strengthening the economic competitiveness and have thus been deemed important sites for attracting global capital. They have therefore advanced to become a global planning tool for reinventing the image of the city in order to propel it onto the global stage. Their planning and implementation process is generally accompanied by the reorganisation of governance structures, new deregulatory frameworks and (innovative) means of financing. State intervention is thereby playing a crucial role in promoting and backing different forms of dispossession by e.g. commodification or privatization of public space, providing governance structures that favour private over public interest or revaluation of developable land for the benefit of real estate and construction companies (Arias 2009).

15This is particularly true for the Spanish case. Over a period of almost two decades (1995-2008), Spain experienced a time of considerable economic growth and prosperity. The then urban model was based on boosterism and expansion (see e.g. Observatorio Metropolitano 2009, 2010). The capital, Madrid, epitomizes this trend particularly well. As part of the city´s huge expansion, a new master plan was approved in 1997, which set the guidelines for its future urban development and building rights. The city’s vision was growth-oriented and based on selling place with policies aiming at deregulation by liberalising land, interventionism and investment in growth at all costs (Delgado Jiménez 2013). In this context, large-scale urban development projects had established themselves as a prominent planning tool among policy makers. Two types of mega projects in particular were dominating urban politics at that time: In line with the ‘Fordist’ type of mega-project, the city government made large investments in infrastructure projects. It expanded the road network increasing its capacity to 1,000 km of motorways and major roads (M-40, M-45, M-50) and extended the underground network as well as the city’s airport (López de Lucio 2003). The other prominent type of mega project was related to real estate developments such as the reclassification of rural land to construction land on the city’s periphery, the Planes de Actuación Urbanística, the four skyscrapers, Cuatro Torres Business Area, or the intended conversion of disused railway land into a new mixed-used district, the Operación Chamartín.

16In contrast to American or British mega projects that mainly aimed to attract global capital, the ones carried out in Madrid can rather be compared to what has been described as the “Spanish model” (López and Rodríguez 2011). Aiming at modernising the city, state and municipal governments used mega projects primarily to create a platform for leading national players in real estate, construction and engineering to exploit new business opportunities. In this sense, they acted as growth machines for their localities with important benefits for the private sector favoured by the country’s “highly decentralized administrative structure, in which the regional Autonomous Communities and municipal governments have wide-ranging powers over urban development, the environment and transport“ (López and Rodríguez 2011: 14). Using public money for corporate benefits became a common practice in Madrid’s urban politics. Thus, major companies in construction and real estate were able to establish themselves as key urban planners and accumulated much of the city’s land turning it into residential developments and industrial estates (Méndez 2014). Provided with soft loans by the banking sector and backed by the state through accumulation mechanisms such as favourable policies (e.g. Ley del Suelo 1998) and important public investments in infrastructural developments, the secondary accumulation circuit (capital flow into the built environment, Harvey 1982) was in full swing.

17The modernisation of the M-30 motorway and the subsequent riverfront regeneration embody these accumulation mechanisms and are perfectly embedded in the logics of the city’s growth machine. The development is therefore a perfect example on which to base an analysis of how political and economic actors organise dispossession processes in the context of urban mega-projects.

Serving the Private Good – the Riverfront Regeneration in Madrid

18In 2005, some of the world’s most powerful tunnel boring equipment (Rowe 2006: 44) set out to dig a six-kilometre tunnel on Madrid’s riverbank. It is the commencement of one of the largest urban projects in Madrid’s recent urban development. The transformation of the river Manzanares consists of three phases: infrastructure, greenery and building. In a first stage, large parts of the 32 km urban motorway were modernised, extended and taken underground over a stretch of six kilometres along both sides of the riverfront. The freed-up surface was, in a second step, converted into a new urban park reclaiming the long neglected relationship between the city and its river. Concurrently, a third phase was commenced that aimed at revitalizing and refurbishing the adjoining neighbourhoods. However, with the outbreak of the economic crisis, the programme was put on hold.

Picture 1: The Municipality of Madrid showing the area of the riverfront regeneration

Picture 1: The Municipality of Madrid showing the area of the riverfront regeneration

Source: OpenStreetMap

Picture 2: The new urban park MadridRío

Picture 2: The new urban park MadridRío

Source: courtesy of mrío arquitectos / Jeroen Musch

19The genesis of the project is closely linked to the mayoral election held in 2003. The then candidate of the Spanish conservative party, Alberto Ruiz-Gallardón, known for having implemented large-scale public construction work previously, announced his next emblematic project to be the remodelling of the obsolete M-30 motorway. This intervention was not envisaged in the city’s master plan but rather decided behind the back of the Urban Planning Department, with the planning process being initiated once Ruiz-Gallardón was elected mayor. At that point, however, there was no clear vision of how to reclaim the riverbanks nor had the idea yet been conceived to incorporate the adjoining neighbourhoods into the regeneration scheme.

20The project’s development and decision-making process was determined by the political agenda and every project phase was aligned with political elections. To complete the project within the 4-year legislative period the planning process was subordinated to the tight electoral schedule and any form of potential delay was avoided even if this implied exploding costs and circumventing legal regulations. This was possible thanks to the long and stable Conservative reign (Partido Popular) prior to Ruiz-Gallardón taking office. Before his election, the City Council had already been run by a conservative mayor for 12 years. Likewise, the wider region of Madrid, La Comunidad de Madrid, was in the hands of the conservative party: Ruiz-Gallardón had served as its president for the past 8 years and it remained in conservative hands during his mandates as mayor.

21His plans for the riverfront regeneration mirror the characteristics of the conservative regime at that time, which favoured state-led projects, particularly infrastructural developments aimed at economic growth, employment and competitiveness. Guided by a nationally autonomous growth-model, the project served to boost the domestic market, above all the sectors of engineering, construction and architecture. Contracts for over 90% of the construction works were awarded to the six leading national building firms, among them e.g. FCC, Ferrovial and ACS (Nota de Prensa ANCI 2005). The urban park was created by three local architectural offices (Burgos and Garrido Arquitectos Asociados, Porras La Casta Arquitectos and Rubio and Álvarez-Sala) who were chosen over internationally renowned architects (e.g. Peter Eisenman, Dominique Perrault or Herzog and de Meuron) in the design competition. To finance the development, the local government had to borrow 2.5 billion EUR (Notario del Ilustre Colegio 2011: 44) – an unprecedented amount in the history of the city council (Gutierrez 2006). An assemblage of several banks headed by Dexia Sabadell S.A., Société Générale S.A., Bankia S.A. and Caja Madrid were involved and benefitted from interest rates far above the usual market rates (Gago Llorente 2013: 260).

22To achieve legitimacy for this undertaking, the local government presented the large-scale riverfront regeneration within a narrative of employment creation, economic competitiveness and sustainability. In the multitude of promotional brochures, videos and books, it was claimed to improve the city´s transport links and decrease contamination and journey times. The new urban park was used to sugarcoat the scheme and promoted as the city’s new important environmental axis (Ayuntamiento de Madrid 2010) and “the largest project of ecological rebalancing in the recent history of our city” (Ayuntamiento de Madrid 2011). “Typically cloaked in the language of ‘development’” (Levien 2013: 402) and more recently accompanied by that of sustainability, the mega project was promoted as “a firm commitment to environmental and social rebalancing as an instrument to increase competitiveness [and] sustainability” (Martínez 2011: Preface). By adopting an ecological rhetoric, the power elite helped to justify the high public investments and obscured rather unsustainable decisions such as to extend the motorway’s capacity by 30 to 50% giving way to increasing traffic and further air pollution. In fact, the forecasted benefits such as reduced congestion and quicker journey times for drivers were soon disproved (Bécares 2011, Rodríguez Molina 2008b). Also, the promise that air quality would improve for the adjoining neighbourhoods remain to be substantiated, as no related studies have been conducted so far as to whether the car exhausts escaping through chimneys close to the housing estates and playgrounds are indeed less contaminated.

23Even though the development triggered harsh criticism from political and professional bodies as well as environmental and neighbourhood associations, the local government succeeded in presenting its decisions not as “blunt instrument of the capitalist class” (Levien 2013: 402) but rather as an undertaking in the interest of the ‘common good’. This is reflected, not least, in the results of the municipal elections. Ruiz-Gallardón was re-elected twice: in 2007 after the tunnelling of the motorway and in 2011 after the creation of the urban park, each time with an absolute majority.

Dispossession by Legal Manoeuvrings

24In the context of accumulation by dispossession “the end result is to move assets and resources from the public or common realm into private hands not via the exchange of commodities, but through legal manoeuvrings and the mobilization of class power“ (McCarthy 2004: 337). What McCarthy is pointing at is of crucial importance in order to understand the way in which the local government in Madrid was actively orchestrating dispossession. Throughout the entire planning and implementation process of Madrid’s riverfront regeneration, the political elite, above all the mayor, used their legal power and discretionary room to manoeuvre to ensure that the mega project was executed according to their wishes and that economic benefits for the private construction, engineering and banking companies were not only guaranteed but also maximized. To do so, legal manoeuvrings became an important mechanism in orchestrating dispossession. Legal regulations were constantly altered, circumvented or ignored – three practices that illustrate to what extent the local government was prepared to make use of its monopoly with regards to defining legality.

Altering legal regulations

25In Spain, motorway construction and modification projects are in the remit of the Ministry of Public Works and Transport. To be able to carry out the project locally and to take the M-30 underground, authority had to be transferred to the local government. This was done by changing the legal status of the M-30 and reclassifying it as an ordinary road rather than an urban motorway. By doing so, the legitimate scope of interpretation was used to its fullest extent given the fact that the M-30 comprises up to six lanes with no opportunities for pedestrians to cross.

Circumventing legal regulations

26The City Council was aware that an urban development project of this scale would not only require major investments but would first and foremost result in a high level of debt. It therefore decided to create a governance model that enabled them to disguise the emerging debt as a private one. Thus in 2004, after the municipal elections, the City Council set up a public company, Madrid Calle 30 S.A. endowed with the authority over the entire management from construction works to all subsequent maintenance works. Shortly thereafter, the local government decided to transform it into a so-called mixed economy company (sociedad de economía mixta). The contract was awarded to a group of global players in the construction sector: Ferrovial Servicios S.A., Dragados S.A. and API Conservación S.A., of which the two former had already been successful in winning lucrative contracts for the tunnel construction (Boletín Oficial del Estado 2004: 10530-1). The constellation of this Public Private Partnership envisaged to continue until 2040 enabled the local government to erase all emerging debt obligations from municipal accounts since they were directly assumed by the mixed economy company. This legal manoeuvre helped the City Council to circumvent the existing regulation prohibiting municipalities from surpassing the debt ceiling, which is limited to 110% of their current incomings (Arias 2009: 208). This was insofar important as the first project comprised 80% debt and 20% equity financing. As the City Council only provided as little as 12.3% of seed capital and private companies even less at 2.3% (Rodríguez Molina 2008a: 44), the banking sector having granted the necessary loans was holding a significant position of power.

27However, the alliance between state and economic actors did not prevent costs from escalating significantly. While the initial cost estimate presented at the time of the 2003 elections amounted to 1.7 billion EUR, the final costs accumulated by 2011 had reached 4.5 billion EUR (Infanzón Priore, City Council, Department of Urban Planning Madrid, Interview 2014). The cost escalation of this project therefore came to as much as 165% not even taking into account interest rates, the regular annual maintenance payments of 300 million EUR and the estimated subsidies budget of 305 million EUR dedicated to the third project, the Urban Renewal Plan. In view of the extensive campaigning for this project, it can be assumed that the actual costs were systematically underestimated. The City Council’s strategy resonates closely with the conception of deliberate deception by Flyvbjerg et al. (2002). “Lying as tactics in power struggles”, they argue, “is aimed at getting projects started and at making a profit” (Flyvbjerg et al. 2002: 289-290). The profit, in this case, was pocketed on the one hand by the large construction companies, above all by those that were part of the Public Private Partnership since their annual rate of return was guaranteed at around 7% (Cámara de Cuentas 2016: 13). On the other hand, the lending banks were in a position to impose interest rates far higher than market dictated (Gago Llorente 2013: 260).

28With the outbreak of the economic crisis, however, a situation had soon been reached where costs exceeded the City Council’s financial capacity. Increasing expenses contributed to the city’s growing debt, which in 2008, after the completion of only the first project, reached 7,822 billion EUR, the equivalent of Andalusia’s and Catalonia’s debts combined (Ministerio de Economía y Hacienda 2008). Due to both miscalculation and fast shrinking resources, other areas were subject to severe austerity measures, as the local government announced an increase of certain municipal taxes and most importantly, the freezing of public investments over a period of four years. Undoubtedly, the ongoing economic crisis has intensified the situation and reinforced social repercussions. Nonetheless, there is no denying that by opting for such costly mega-project the local government has knowingly accepted cuts in public spending not just in the short run but for as long as the following (5-6) legislative periods. In fact, Ruiz-Gallardón’s successor, Ana Botella (Partido Popular), introduced higher taxes in numerous areas in subsequent years: property tax went up by 4% both in 2012 and 2013, trade tax rose by 2% and road tax went up as well (García Gallo 2013). At the same time, public sector cuts led to an overall decrease in public funding by more than 10% between 2012 and 2014, with some areas suffering cuts to their budgets by up to 45%. Public spending on infrastructure (e.g. pedestrianisation, bicycle lanes, etc.) decreased by 44.6%, the departments of town planning and art (Area de las Artes) lost 27% and 26% of their budgets respectively and spending in the field of social affairs decreased by 12.7% (García Gallo 2012). At the same time, however, the budget for amortization saw an increase. Also, the regular payments to the Public Private Partnership Madrid Calle 30 S.A. and the banks involved in the development continued to flow. This form of restructuring public money epitomises the unequal distribution of wealth and the concomitant practice of “privatizing the capital gains but socializing the losses” (Alexandri and Janoschka 2017: 11) both at local and national level (López and Rodríguez 2011: 21).

29Another prominent example of evading the law can be seen in the City Council´s handling of the statutory environmental studies. Although these strategic environmental assessments are required in the run-up to every large-scale project of this type, the local government circumvented this regulation on the ground that environmental studies are not compulsory for ordinary roads. Even though legally correct, the M-30, as mentioned above, could not be characterised as such. Furthermore, the development was divided into several individual sub-projects, which because of their small scope did not require any environmental assessment either, the City Council declared. Although administratively and operationally justifiable, such statement conflicted sharply with the way in which local authorities presented and promoted the venture as “a firm commitment to environmental [...] rebalancing” (Martínez 2011: Preface, see also Ayuntamiento de Madrid 2010).

Ignoring legal regulations

30In addition to environmental studies, public participation is another statutory requirement in the planning process of mega projects. Being aware that an open public discussion and a comprehensive process of public participation would have impeded the mayor’s ambitious plans, room for a genuine debate was not provided. The legally required citizen information campaign prior to development was only carried out once construction works had already started. The documents that were made available were criticised as opaque and overloaded. The general lack of transparency and public debate triggered increasing protest from the political opposition, professional bodies and the University of Architecture, environmental and neighbourhood associations as well as residents (see e.g. Arias Goytre 2004, López de Lucio et al. 2004, Plataforma contra el insostenible proyecto de la M30, Sabanés Nadal 2004). As political pressure on the local government grew, a commission made up of representatives from political and professional bodies was set up to agree on a far more participatory approach in the second project phase (Ayuntamiento de Madrid 2014). Considering the total lack of community involvement in the first phase, the local government could not afford to ignore it for a second time. The political strategy can hence be characterised as what Shaw (2013: 2174) defines as a “narrative of redemption”, the intention of making up for early failures in the actual decisive phase of strategic alignment.

31Ignoring legal regulations was not only practiced in the planning stage of the project but also during its implementation. Due to time constraints, construction work had to be carried out around the clock, which affected the quality of controls and precautionary safety measures. The resulting high risk led to more than 1,000 accidents and nine fatalities as a direct consequence of extended working hours and the disregard of working restrictions at the weekend (Moya 2013: 249).

32Furthermore, the noise and air pollution levels generated by the continuous construction works were said to exceed ten times the legal limit and had to be endured over a period of two to three years of ongoing works (Plataforma M-30 No más coches). Local residents were hence heavily affected and suffered from these unbearable conditions. During that time some social groups, in particular elderly and disabled people, were very much prevented from leading their normal daily life as construction works were carried out right in front of their doorsteps and made it highly difficult for them to leave their homes without any safety risks.

33

Picture 3: Construction works right on the doorsteps

Picture 3: Construction works right on the doorsteps

Source: courtesy of Plataforma M-30 No más Coches / Ecologistas en Acción

34Thus, the local government made extensive use of its legal powers through the “rolling back of regulatory frameworks designed to protect labour and the environment from degradation” (Harvey 2003: 148) and by using legal and planning codes to de-politicise the development and limit options for contestation.

35These different facets of dispossession by legal manoeuvrings and political fraud find their “material and symbolic expression” (Alexandri and Janoschka 2017: 11) in the multitude of legal actions taken against the former local government and its private partner. Right from the planning and implementation phase of this mega-project, the opposition and civic institutions reported the local government’s malpractice both on national and European level. In 2006, the European Commission opened treaty violation proceedings and in 2008, the European Court of Justice confirmed a violation of the law by Madrid’s local government declaring the environmental studies as a statutory element of such a large-scale development project (European Court of Justice 2008, Ecologistas en Acción 2007). However, these rulings did not have any practical consequences since the development had already been completed. The irregularities related to the governance model became the subject of an investigation as soon as the conservative government was replaced by the new left-wing party, Ahora Madrid, in 2015. The audits of Madrid Calle 30 S.A.’s accounting, assets and commissioning procedures revealed a series of distortions and cases of nepotism: The regular payments to the private partner for management and maintenance works were based on the rate of return instead of feasibility studies; the contract award process for construction and maintenance work was declared as intransparent not only because of missing selection criteria but also due to the absence of studies on how commissioning cost estimates were calculated; last but not least all successful tenderers during the examined period (2012-2013) were part of or somehow linked to the companies forming the private partner (Cámara de Cuentas 2016: 76-78). Similar observations were also made by the commission of enquiry set up in 2017 to further examine the political compromises and financial assemblages made throughout the development. Based on the disclosed infringements, the City Council initiated six criminal proceedings against the private partner of Madrid Calle 30 S.A. So far, it has been fined in three cases for a total amount of 995,000 EUR due to lack of maintenance and contractual non-performance (Ayuntamiento de Madrid 2017).

Closing Reflections

36The analysis of Madrid’s large-scale riverfront regeneration demonstrates how urban mega-projects can serve as a vehicle for accumulation by dispossession. Orchestrated by political actors, the development scheme proved to be a great platform for strategically positioned companies in the private sector to place their services and maximise profits. This was made possible by deliberate political action with the help of a public-private governance model and strategies of legal manoeuvring as the core elements of state-mediated dispossession. The “extra burden of ideological legitimation” (Levien 2013: 383) was dressed into a garment of modernisation, employment and sustainability and presented as a service to the common good.

37For the sake of completeness, it needs to be said that, undoubtedly, some improvements have been achieved for the benefit of the (wider) public, the most visible one being the reclamation of the city’s river and its transformation into a linear park with new sports facilities and public services. Moreover, a new transversal urban reconnection has been achieved in several ways. Most importantly, neighbourhoods and functions that had been segregated for decades are now reconnected by an extensive network of bridges and walkways oriented towards places with high transit and strategic connections to the rest of the city. In times of increasing privatisation and commodification of public goods, local authorities in Madrid have opted for an important public investment in communal space without public exploitation in real estate or any form of economic or financial returns for the City Council. By creating an urban park of more than 100 ha, it was a clear statement as to the importance of public space to the city, especially bearing in mind that it is located near but not in the city centre and connects “bourgeois residential areas with the historically depressed South” (Martín Blas 2012: 4).

38However, the question of redistribution of wealth remains, given the tremendous debt the project left in the municipal budget and the way profits were privatized and losses socialised.

39In this vein, theorising the presented case study through the notion of accumulation by dispossession helped to better understand the way in which this project enabled a redistribution of public money to the benefit of certain economic actors in the private sector dispossessing the larger urban population of public spending e.g. in social infrastructure, social services and in the cultural sector.

40The different practices of legal manoeuvrings identified in this research help to promote a more nuanced understanding of how the state actively orchestrates dispossession and what the scope of action it is willing to grant itself in order to do so. In this vein, the analysis complements Alexandri and Janoschka’s novel concept of dispossession by political fraud through further elaboration on the strategies political actors employ to make use of their monopoly of legal power and their discretionary room to manoeuvre.

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List of illustrations

Title Picture 1: The Municipality of Madrid showing the area of the riverfront regeneration
Credits Source: OpenStreetMap
URL http://journals.openedition.org/articulo/docannexe/image/3238/img-1.png
File image/png, 1.2M
Title Picture 2: The new urban park MadridRío
Credits Source: courtesy of mrío arquitectos / Jeroen Musch
URL http://journals.openedition.org/articulo/docannexe/image/3238/img-2.jpg
File image/jpeg, 504k
Title Picture 3: Construction works right on the doorsteps
Credits Source: courtesy of Plataforma M-30 No más Coches / Ecologistas en Acción
URL http://journals.openedition.org/articulo/docannexe/image/3238/img-3.jpg
File image/jpeg, 590k
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References

Electronic reference

Nina Margies, « Serving the private good through legal manoeuvrings », Articulo - Journal of Urban Research [Online], 2017, Online since 29 November 2017, connection on 18 August 2018. URL : http://journals.openedition.org/articulo/3238

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About the author

Nina Margies

Nina Margies is a PhD candidate in Urban Sociology at the Georg Simmel Centre for Metropolitan Studies, Humboldt University of Berlin. Her research interests include political economy, urban sociology and the sociology of emotion. E-mail: margiesn@hu-berlin.de

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Copyright

Creative Commons 3.0 – by-nc-nd, except for those images whose rights are reserved.

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