It is now two years since the completion of the second phase of the Tranvia tram system in Vélez-Málaga, a 1,200 metre extension to the service, yet it remains unused and the tracks apparently showing signs of deterioration.
The second phase of the tram network cost €8.1 million, funded by the Junta de Andalucia, but mounting municipal debts with the company operating the tram, Travelsa, a failure to obtain a loan or assistance to develop the system, low passenger numbers and demands by Travelsa for a new, increased technical rate have meant that the new section is still not operational.
Under the agreement with Travelsa, the Council has to pay the difference between the technical rate (actual cost of travel) and the ticket price to consumers. The technical rate is currently €1.68 and the ticket price is €1.30, meaning that the Council has to subsidise the service to the tune of €0.38 per passenger.
As a result, the Council is now heavily in debt. Travelsa now want to increase the technical rate to €2,25.
In 2010, 489,612 people used the tram. For the system to be profitable, the number of passengers would have needed to be 1,190,676. Quite a difference.