The company Canal Gestión Lanzarote has requested before the Administrative Litigation Court number 3 of Las Palmas de Gran Canaria to execute the final judgment that orders to review the awarding of its comprehensive water cycle contract in Lanzarote, which dates from 2013, sources from the Superior Court of Justice have confirmed to EFE.
The ruling, whose compliance is now requested by the subsidiary in the islands of the Madrid-based company Canal de Isabel II, orders the Island Water Consortium to open a procedure to review the awarding of that service to determine whether or not it should be annulled.
The final ruling of the Superior Court of Justice of the Canary Islands on this matter ruled that between the initial tender and the negotiated one by which the contract was finally awarded there was a "substantial modification" of the conditions of the awarding procedure.
After the bankruptcy of the company Inalsa, the Lanzarote Water Consortium decided to tender the comprehensive water cycle but it was unsuccessful.
After that tender, it decided to initiate a negotiated procedure that ended up being awarded to Canal Gestión for 106 million euros, almost triple the initial amount.
In the event that the contract is annulled, the Madrid-based company, in addition to ceasing to provide the service, could request to be compensated for the money it has invested in Lanzarote during these twelve years.
Since 2013, Canal Gestión Lanzarote has accumulated operating losses of 64 million euros.
Its initial offer reflected that the company would start making profits from the eighth year of the concession but this has not been the case. Of the 153 million of the credit policy it has from its Madrid-based parent company, it has already spent more than 140.
To this situation has been added the high cost of energy and the fact that the Canary Islands Prices Commission has prevented it from raising tariffs since 2017, as stipulated in the contract.
The CEO of Canal de Isabel II, Mariano González Sáez, admitted last year in the Assembly of Madrid, when asked about a possible departure from the island, that "if there is interest and the interest fits within the economic parameters" they would study any proposal.
Last August, the president of the Cabildo of Lanzarote, Oswaldo Betancort (CC), stated that he had a report that detected "serious breaches" by Canal that could lead to the termination of the water management contract in Lanzarote.
The ruling derives from a procedure initiated by the company Club Lanzarote, which filed after the former president of the Cabildo Pedro San Ginés (CC) ordered the intervention of the desalination plant that the company has in Montaña Roja (Playa Blanca).
The first ruling is from October 2016 and was unfavorable to the company, but the TSJC revoked it in 2017 and the Supreme Court rejected the appeals for cassation.
Subsequently, Club Lanzarote and the Cabildo reached an agreement on the desalination plant and the company waived its right to request the execution of the ruling on the water cycle contract.
In May 2018, the then president of the Cabildo of Lanzarote, Pedro San Ginés, assured in plenary that the ruling no longer had effect because Club Lanzarote had waived it.
In that same year, the Water Consortium insisted that the procedure was exhausted because there was no "one to urge its execution".
