The Castellana Norte District, formerly known as Operation Chamartín—the largest urban development project ever proposed in Europe, involving the 3.7-kilometer extension of Madrid’s Paseo de la Castellana—will get underway in the coming months, 20 years after it was first proposed. BBVA Chairman Francisco González, Minister of Public Works Ana Pastor, Madrid Mayor Ana Botella, and President of the Community of Madrid Ignacio González presented the project on Friday.
Antonio Béjar, president of Distrito Castellana Norte Madrid, said that this is an option «that has not been ruled out,» although he noted that it is still too early to discuss an initial public offering for the company. Béjar referred to other similar projects that have turned to the market for financing. In particular, the executive mentioned the case of the British company Brookfield States, which, beginning in the mid-1980s, transformed London’s Canary Wharf into the city’s financial center. This week, the Qatar Investment Authority (QIA) and the Canadian group Brookfield States launched a hostile takeover bid worth 3.5 billion euros to acquire the company.
Distrito Castellana Norte Madrid (formerly Duch) has worked with 31 companies that served as consultants on the project presented on Friday, led by the engineering firm Arup. The company has drawn inspiration from other major urban renewal projects undertaken in European cities, such as La Défense in Paris (1960), Canary Wharf in London (1980), and Postmodern Platz in Berlin (2000).
«It’s not easy to say that this will be a profitable project for BBVA, but it certainly will be for Madrid,» said the financial institution’s president, Francisco González, during the project’s presentation. «It is probably the most significant urban development project in Europe and the world—there is no project like this anywhere else in the world; at BBVA, we have always seen great potential in it,» he added. The president of the Spanish bank noted that the project itself is a good reflection of the Spanish economy’s recovery: «We have undoubtedly emerged from the crisis,» he said.
1.25 billion for Adif
The Railway Infrastructure Administrator (Adif) will receive 1.25 billion euros for the development of the Castellana Norte District, with the final payment due in 20 years, when the construction work is expected to be completed.
The price agreed upon between the company in charge of the project and Adif for the sale of the land is 984 million euros. Added to this figure will be 216 million euros that Adif will receive at the start of construction. The public agency will receive an agreed-upon annual amount plus interest until the total reaches 1.25 billion, according to estimates from Adif sources consulted by this newspaper. The railway administrator will use these funds for «improvements to the conventional rail network,» the agency explained.
«This time for sure»
The last time the Paseo de la Castellana expansion project was officially unveiled in a manner similar to this Friday’s event was in December 2008. The capital’s mayor at the time, Alberto Ruiz-Gallardón, and the Minister of Public Works, Magdalena Álvarez, announced the launch of Operation Chamartín, with construction costs estimated at 11,000 million euros. The economic crisis and court rulings against the project brought the plans to a standstill.
«This time for sure,» Antonio Béjar emphasized on Friday, assuring that the administrative hurdles have already been overcome, as has the outstanding payment to Adif—amounting to nearly 1,000 millones de euros—to acquire the land on which the Distrito Castellana Norte project will be developed. The executive did not provide details on the financial agreement reached with the railway agency. The BBVA-controlled company «has secured financing,» he noted.
«We have received expressions of interest from potential investors; we are now very pleased with the two partners [BBVA and San José], although we cannot rule out the possibility that others might join,» he said.
When asked whether a possible change in the Madrid government would affect the project's progress, Béjar said he didn't see why it would, and emphasized that the company «works with institutions, not political parties.».
