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THE TERMS OF THE NEW TENDER RELATING TO THE MANAGEMENT AND RUNNING OF THE COMPLEX HAVE BEEN APPROVED

30 of september 2013

The terms of this document will help ensure that the future management company is prestigious, which will contribute towards the generation of business.

S'aproven els temes del nou concurs elatiu a la gestió i explotació del complex

Palma - 1st June 2012. The councillor for Infrastructures, Territorial Planning and President of the Board of Directors of the Palau de Congressos de Palma S.A., Sebastià Sansó, and the Managing Director of the Palau, Ignacio Jiménez, at a press conference this morning, announced the most recent agreements reached by the Board of Directors.

 Today, Friday, the Board of Directors of the Palau de Congressos de Palma S.A. have approved the definitive text of the terms which will govern the tender for the management and running of the complex of the Palma Convention Centre for the next 40 years. This text will be published at the beginning of next week. There will be one sole tender for the totality of the facilities, although it is also possible that tenders will be presented by either one company for the management of the complex, or two or more companies in a joint venture agreement.

Given the special circumstances within the current national and international economic context, it was decided that the formula sought should take into account the interests of the Limited Company, Palau de Congressos de Palma S.A., on the one hand and those of the potential bidders on the other. Thus, the economic conditions set out will guarantee on-going income for the Palau de Congressos, with the said income covering a significant part of the costs of financing the project. In addition, several forms of payment are being considered to cover the financial undertakings which will have to taken on by the winning bidder. This will enable the winning bidder to choose the option which best fits their financial strategy. This flexibility, which will not affect the interests of the PLC, makes the tender more attractive to potential bidders.

The councillor for Infrastructures and President of the Board of Directors of the Palau de Congressos de Palma S.A., Sebastià Sansó, has stated that; "we should not forget that we are inviting tenders at what is possibly the worst moment in the recent economic history of our country, and this means we are obliged to find formulas which enable us to facilitate not only our interests as the Administration, but also those of the bidders." He also pointed out that; " what we have not changed nor lowered are the solvency requirements the bidders must comply with, as we still wish to place this infrastructure exclusively in the hands of first rate national and international companies."

Thus, the Managing Director of the Palau, Ignacio Jiménez, has set out the changes made in the document, which are firstly, the levy, which has been set at 8 million euro although with a "certain" flexibility with regard to the means by which it can be settled by the potential bidders as it carried out in three different ways. Paying the complete 8 million at the beginning of the contract or 50% at the beginning, i.e. 4 million euro, plus the amount of 220 thousand euro annually for the 40 years that the contract lasts. And, as a third option, Jiménez has explained that they could opt not to pay the initial levy established, rather capitalize it for the 40 years, to the amount of 425 thousand euro annually.

With regard to the fixed income, the amount of 1,250,000 euro annually would be added to the aforementioned levy, based on which the bidders could present their offers. With respect to the variable income, a minimum of 15% of the gross running profits has been established.

In addition, other modifications have been made which affect the maintenance of the complex. While previous documents stated that the management company would undertake the totality of maintenance work, this has now been modified and the management company will be responsible for the general maintenance of the building and the facilities while the owner, i.e. the Palau de Congressos, will undertake the exclusively structural part of the building.

With respect to the criteria of the awarding of the concession, the proportional parts are unchanged, being 60% of the economic offer and only evaluating the proposal for fixed income. And 40% for the technical offer.

The manager added that; "with conservative estimates it is expected that this infrastructure will mean a return of 37 million euro annually for the city."

The period for the submission of offers has been set at thirty calendar days as and from its publication in the BOE (Official State Bulletin). The electronic proceedings have already begun, thus in July the awarding of the tender will have been decided and therefore the project will have a manager who will be involved both in the final details of the equipping of the infrastructure and in the promoting and marketing of the same, with a view to its being up and running in the first few months of 2013.

Date of last modification: 3 of October 2013

Palau de Congressos

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