Last November, the Superior Court of Justice of the Canary Islands ordered a review of the award to Canal de Isabel II of the integral water cycle in Lanzarote, in a ruling that the Water Consortium has kept hidden and that had not come to light until now. The ruling, which La Voz has now had access to, dated November 21, describes as "controversial" the actions of the Consortium chaired by Pedro San Ginés and concludes that there were "surprising alterations" in the award procedure "for the benefit" of Canal.
Therefore, the TSJC upholds the appeal filed by Club Lanzarote and orders the initiation of an administrative procedure to determine whether that award should be declared null and void. In addition, it warns that "this controversial action by the Consortium will very difficultly overcome the obstacle posed by the opinion of the Advisory Council", which should issue a report within that contract review process.
The award of the Lanzarote water cycle to Canal de Isabel II, investigated in Madrid in a criminal case for bribery and embezzlement, was not made through a public tender but through a negotiated procedure with publicity, after the tender that had been called was declared void. In such cases, the law allows recourse to a negotiated procedure, but only if there are no "substantial modifications" with respect to the specifications that governed the tender declared void. And in this case, the Contentious Chamber of the TSJC affirms that, "with blinding clarity", it can be concluded that there were "alterations".
The contract is "radically different" from the one that went out to tender
"It is unquestionable that the Consortium ended up making a substantial modification of the conditions governing the contract award procedure, to the point that the one actually concluded is radically different from the one that was the subject of the initial tender", the ruling states, thus upholding Club Lanzarote's appeal and annulling the ruling that had been issued in the first instance.
Unlike what has happened now, the Consortium did report on that first ruling in its day, issued in October 2016 by the Contentious-Administrative Court Number 3 of Las Palmas. And it did so with a statement in which it assured that the Justice had "ratified the legality of the award of the integral water cycle to Canal Gestión Lanzarote". However, as La Voz reported at the time, that ruling merely dismissed Club Lanzarote's appeal, stating that the company was not "legitimized" to file it, as it understood that it was not "part" of the award process.
Precisely for this reason, contrary to what the Consortium reported at the time, that ruling did not even analyze the legality or otherwise of the award to Canal. But the TSJC did so a year later, in this new ruling that had not been known until now and on which the Consortium has not given explanations.
Canal was exempted from paying 50 million in advance
In this ruling, the Court begins by concluding that Club Lanzarote can be considered a party to the procedure, among other things because it could have opted for the tender in the event that a second public call had been made with the same conditions from which Canal Gestión benefited in the negotiated procedure.
Regarding those conditions that were "substantially" modified, the ruling makes express reference to one of them, by way of "example", although it points out that there are more. Specifically, it emphasizes that among the initial conditions of the contract "was that the fee - which amounted to the amount of 50 million euros - had to be paid prior to the formalization of the legal transaction, while in the contract finally signed the adjudicator is allowed to pay only 15 million euros as a down payment; 8 million euros in the second year; 8 million euros in the third year; 9 million in the fourth year and 10 million in the fifth year".
"Obviously, in the conditions set out, it is not difficult to understand why Club Lanzarote went from ruling out its participation in the procedure to taking a keen interest in being part of it", concludes the TSJC. "And we emphasize that we have only mentioned one of the various surprising alterations that, for the benefit, in the end, of the company that was awarded after the celebration of the negotiated procedure (which replaced the open one, which was the one foreseen), the specifications suddenly experienced", the ruling adds.
"It will hardly be able to overcome the opinion of the Advisory Council"
Club Lanzarote addressed the Water Consortium in 2014 asking it to carry out an "ex officio review" of the resolution by which it agreed to initiate a negotiated procedure to award the management of water on the island. In December of that year, its request was rejected and then the company went to court to have the agreement dismissing its request annulled, which is what has now been revoked and declared null and void by the TSJC.
Thus, what the ruling implies is that the request for review filed by Club Lanzarote must be "admitted, processed with observance of each and every one of its procedures, and resolve such request, in the terms that proceed, in accordance with the Law". As for the other claim made by the company in its appeal, claiming that the award itself should be annulled, the ruling cites jurisprudence in this regard and concludes that this administrative review procedure must be carried out first.
"The prudent thing to do now is to act as we usually do, that is, to order that the request be admitted and that the procedure be processed through all its stages", the ruling states, which nevertheless anticipates that "this controversial action by the Consortium will very difficultly overcome the obstacle posed by the opinion of the Advisory Council". The request for a report to this body of the Government of the Canary Islands would be one of the first steps that the Consortium should take to execute this ruling, after opening the corresponding review file to determine whether the award was null. However, six months after the ruling was issued, there is no record that the Consortium has initiated this file or whether it has filed any type of appeal against this second instance ruling of the TSJC.
