EMT secures a €20M loan due to the lack of liquidity caused by free transport in Palma

The Board of Directors of the Municipal Transport Company (EMT) of Palma has approved the contracting of a short-term credit policy worth 20 million euros. This measure aims to alleviate liquidity problems caused by the implementation of free transport in Palma during 2025.

Photo: Palma City Council.

The new line of credit replaces the previous one of 15 million euros, requested in 2024 to cover deficits resulting from the free service in 2023 and 2024. The funds obtained through this new credit policy will be used to cover EMT’s daily needs, such as paying staff salaries and suppliers.

The Deputy Mayor for Mobility and President of EMT, Toni Deudero, has stated that the 18 million euros received by EMT between 2023 and 2024 from the central government do not cover the real cost of the lost income. He also pointed out that the Ministry of Transport refuses to compensate the additional costs incurred by maintaining the free service during those two years.

For 2025, the Ministry has announced a total allocation of 63 million euros to finance the free transport across the Balearic Islands. However, it is still unclear how much of that will go specifically to Palma. “It is incomprehensible that EMT has to bear both the liquidity shortfall due to delayed payments and the extra costs of a service that should be fully funded by the Ministry,” said Deudero.

€15M deficit in 2023 due to free transport in Palma

The EMT president also recalled that in 2023, the central government granted the Balearic Islands a subsidy of 43 million euros to fund free transport in Palma and across the archipelago. Of that total, Palma received 18.7 million, an amount that remained unchanged in 2024, but which has proven insufficient, resulting in a deficit exceeding 15 million euros that the Ministry has already said it will not cover.

“The Ministry acts as if it is paying for the free service, but then shifts the burden to the City Council, forcing us to advance a significant portion of the cost of this gratuity,” Deudero lamented.