The Catalan Government privatises Greater Barcelona’s water supply to reduce the public deficit

Barcelona (ACN).- Acciona’s joint venture, which includes the Brazilian investment bank BTG Pactual, has been awarded the contract to manage Aigües Ter Llobregat (ATLL), the publicly-owned company supplying drinkable water to Greater Barcelona. The joint venture lead by the Spanish company Acciona will pay the Catalan Government €300 million in 2012 and €700 million over the remaining 50 years, the period the contract lasts. Acciona and its partners will run ATLL until 2061. They will be in charge of extracting water, purifying it, transporting it and supplying the drinkable water to retail distributors, which are those directly supplying citizens and companies with water. They will guarantee the water supply to an area of some 5 million inhabitants. ATLL’s partial privatisation was announced months ago and it has been adopted as part of the Catalan Government’s austerity plan in order to reduce the public deficit and meet the imposed deficit targets. ATLL had an accumulated debt of €600 million, as it had made large infrastructure investments in its network in recent years. In 2011, the public water company lost €70 million. In its budget for the current year, the Catalan Government included a forecast of being able to obtain between €400 and €600 million by privatising public companies such as the water supplier ATLL and the highway management Tabasa.

On Tuesday, the Catalan Ministry of Territory and Sustainability, in charge of Water Management, disclosed the resolution of the public competition to privatise the management of Aigües Ter Llobregat. According to the press release, Acciona’s joint venture was offering “a better price for the water”. The Catalan Minister for Territory and Sustainability, Lluís Recoder, signed the resolution on Tuesday. The ultimate objective of the privatisation is to “guarantee the viability of the service during the 50 years the concession lasts”.

The awarded joint venture is lead by Acciona Agua SA, part of the Acciona group – owned by the Entrecanales family. The joint venture includes Aigües de Catalunya Ltd, Gopa Consulting SL, Acacia ISP SL, Global Buridan SL, Global Lubbock SL and Gestió Catalana d'Aigües SA. Besides Acciona’s group, a rival joint venture was competing to get the contract. It was the group lead by Agbar, which offers water retail distribution to many Barcelonans. Agbar’s group was formed by ACSA Obras e Infraestructuras SA, Disray Trade SL, NIRIR 2012 SL, Mina Pública d'Aigües de Terrassa SA and Companyia d'Aigües de Sabadell SA.

The decision follows an “objective, rigorous and detailed” analysis of the offers presented. It comes one month after the deadline to submit tenders, which finally fell on the 5^th of October after the deadline having been extended. According to the contract, ATLL will have to guarantee the ecological water level and flow of the Llobregat and Ter rivers. This means ATLL is allowed to extract up to 166 cubic hectometres per year, according to the current climate conditions. In addition, the ecological levels have to be guaranteed throughout the year, with a maximum extraction of 5.7 cubic metres per second.

Despite ATLL’s partial privatisation, the company “will continue to be a public service” controlled by the Catalan Government, stated Recoder. The Catalan Minister emphasised the need to adopt such a measure, in order to obtain additional revenue in times of recession. This money is very much needed to reduce the public deficit, he stressed.