2023-09-22 23:59:05
The Municipality of Córdoba drastically accelerated the pace of works and spending in the first half of 2023 and is now experiencing delays with suppliers. After the electoral processes in which Mayor Martín Llaryora was elected governor of the province and Vice Mayor Daniel Passerini was confirmed as successor in the 6 de Julio Palace, the unpaid invoices began to worry the municipality’s contractors, who are putting pressure on them to regularize the situation before the change of command.
Complaints regarding delays in payments are reiterated from several different sectors, especially from cleaning, weeding, and supply companies.
The reduction of payment terms and regularity had been one of the great novelties that the Llaryora administration brought since 2020. After a first year of organization and negotiation with suppliers for pre-existing debts, the Peronist management displayed economic strength and ordering. Now the municipal team admits the delays, although they assure that measures have already been taken to reverse the situation before the end of the administration.
The municipality’s Secretary of Economy, Guillermo Acosta – who is in New York with Llaryora – indicated that payments have already been normalized in several areas, and that in the coming days they will be fully regularized. “We had planned to place Letters whose authorization by the Ministry of Economy of the Nation and the Central Bank took much longer than expected and that generated delays, but the payments will be normalized as soon as possible,” indicated the official.
Record placement
This placement of Treasury Bills of the Municipality of Córdoba took place last Tuesday and had a record magnitude: it reached $5,000 million. Series 49 not only attracted attention due to its magnitude, but also because it required a resolution from the Central Bank authorizing a substantial increase in the municipality’s issuance amount, which had a limit of $6,000 million. Given that this year there were already two other previous issues that completed that sum, the Central Bank expanded the limit of annual financing via Letters to $11,000 million.
In practice, this scheme is the main source of municipal financing. Given the compliance trajectory that the capital municipality has maintained since Ramón Mestre’s first administration, the term of the Letters – initially 90 days – was extended and this year’s issues were 300 days. $3,000 million were placed in April and the same figure in June, in addition to the $5,000 million this week. The interests are high, but lower than other available methods: Badlar rate plus 725 basis points.
The three emissions of 2023 must be canceled by the future municipal administration of Passerini. Inside the municipality there are constant jokes on the subject, since the future mayor will not be able to appeal to the argument of the “inheritance” received: this year’s increase in spending was closely linked to Passerini’s own electoral campaign.
Certificate Discount
The great novelty of the Llaryora administration was the reactivation of public works. There are several construction companies in Córdoba that, following decades of not working with the municipality, returned to participate in the tenders since mid-2020. For two years, the volume of works was increasing and payments were punctual, but in 2023 two things happened in simultaneous: the pace of works was accelerated due to the electoral campaign and payments were slowed down.
In the Construction Chamber of Córdoba they assure that between last April and August the situation worsened, until in recent weeks the discount system for municipal works certificates was enabled in the Bank of Córdoba. This is the financing scheme that the Province always resorted to when it had cash problems to pay for works. Companies believe that the situation is tending to normalize.
Inside the municipality they also claim that following the elections there was an abrupt reduction in spending. Events that had been very expensive in previous years were suspended – the City Marathon will not be held – and the pace of work slowed down noticeably. The lack of budget became a reality in almost all secretariats, despite the fact that until now municipal collections have not registered significant drops.
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