The general plan company of Palma claims 350,000 euros from Cort in the trial against the termination of the contract

PalmaTwo years after the Palma City Council rescinded the contract with Territorios y Ciudad to draft the Detailed Planning Plan (POD), the conflict remains open in the courts. The company claims 348,794.91 euros from Cort, VAT included, for work it claims to have carried out and not been paid for. The company calculates that the ruling on the contractual resolution could arrive during the first quarter of 2027.

“We are in litigation. The City Council resolved the contract, we filed a lawsuit, and Cort has already responded,” explains Sebastián Olmedo, partner at Territorios y Ciudad and legal director of the Palma General Plan revision work. According to him, the procedure is pending the court determining which evidence it will admit before issuing a ruling. The company expects this decision to be made during the autumn.

The Urban Planning department announced in April 2024 that it was rescinding the contract due to “repeated and constant breaches.” Councillor Óscar Fidalgo at the time accused the company of systematically missing deadlines and of having delivered “deficient” and “incomplete” documentation which, according to municipal technicians, could not serve as a draft for public exhibition. Fidalgo also announced that municipal services would take over the drafting of the POD.

Territorios y Ciudad denies these breaches and attributes the rupture to the change in the municipal government. “Everything went well until the change of government occurred. We interpret that they were looking for an excuse,” states Olmedo. The company believes that the PP disagreed with part of the planning approved during the previous legislature and that this political opposition ended up affecting the contractual relationship.

“In a scenario of goodwill and understanding, it could have been resolved,” maintains the company's representative. “We were receiving the blows that were aimed at others,” he adds, referring to the new municipal government's criticism of the planning promoted by the previous Cort team.

Two plans instead of one

Territorios y Ciudad signed the technical assistance contract in September 2019 to develop Palma's new urban planning, awarded for 972,422 euros. The company points out that the tender documents had been drafted in accordance with the 2014 Land Management and Use Law and provided for the creation of a single general planning instrument.

When the contract was signed, however, the 2017 Balearic Islands Urban Planning Law was already in force, which differentiated between two instruments: the General Plan, of a structural nature, and the Detailed Planning Plan. The company assures that it undertook the development of both documents, even though the tender documents did not expressly provide for this division.

The General Plan regulates the city's structural urban planning model, while the POD specifies aspects such as buildability, heritage protection, expropriations necessary for constructing facilities, or certain uses of premises.

According to the company's version, the first phases of the contract were executed within the established deadlines, were validated by the Municipal General Plan Office, and were paid for by the City Council. The processing became complicated during the third phase, when it was no longer possible to continue processing the General Plan and the POD simultaneously due to changes resulting from the objections filed.

The previous government team decided to prioritize the General Plan, as the structural instrument that defined the city model. This part of the planning was definitively approved on April 28, 2023. Subsequently, the company submitted the consolidated text of the General Plan and a new POD document to be submitted again for public information.

Four pending concepts

The settlement proposal presented by Territorios y Ciudad in January 2025 sets the amount the company claims from Cort at 348,794.91 euros, VAT included. The sum corresponds to work from the final phases of the General Plan and documentation that the company considers the City Council commissioned it outside the initial contract.

Among these tasks, the company includes a new Detailed Planning Plan, which it had to adapt because the introduced changes required it to be submitted again for public information, and the necessary documentation to restart the environmental assessment of the planning. Territorios y Ciudad assures that it delivered all these works, but that Cort has not paid for them.

“We have complied even more thoroughly than the regulations and the contract required,” assures Olmedo. The company maintains that it communicated all these circumstances to the Palma City Council and that it maintained at all times its willingness to complete the assignment.

“A stab in the back”

Olmedo assures that Cort does not want to settle the works now because the termination of the contract is pending the decision of the courts. “For us it was a stab in the back. It could have shaken the company”, he states.

The head of Territorios y Ciudad remarks, however, that the company has continued to win tenders and work for administrations governed by different parties. Among other projects, it has participated in the review of the Territorial Planning Plan of Andalusia and is currently working with the Consell de Mallorca on the urban planning of Selva.

The company assures that it has no contact with the Palma City Council. It also points out that the Director of Urbanism who arrived with the new municipal government resigned at the end of 2025, although it does not establish a direct relationship between this departure and the judicial proceedings.

Olmedo argues that, if the courts annul the resolution agreed by Cort, it will have to be determined in what legal situation the contract remains. Territorios y Ciudad considers that it could remain in force, although the specific consequences will depend on the content of the ruling.

The City Council had justified the rescission due to the insufficient quality of the documents and the accumulated delays. The company, on the other hand, maintains that it delivered the work, that the phases were validated and that part of the new requirements exceeded the initial object of the contract. Two years after that confrontation, the settlement of the assignment and the future of the POD remain pending a judicial decision.

Cort has not responded to the questions raised by ARA Balears on the matter to obtain their version.