The legal report of the Water Consortium of Lanzarote that opens the way to terminate the contract with Canal Gestión states that the concessionaire company has committed "serious breaches" of the contract. According to the extensive document, of 98 pages, which La Voz has been able to access, the Water Consortium highlights that the concessionaire did not invest the agreed 54.4 million to reduce network losses in less than five years and that it made "unilateral" investments not contemplated.
The subsidiary company of Canal Isabel II of Madrid assumed the integral water cycle on the island since 2013 for a period of thirty years. According to what was agreed, Canal Gestión had until 2018 to reduce losses in the network and invest more than 54.4 million in improvements, with the objective that the water wasted in the network would fall below 30%. However, the technical report indicates that in that period the planned investments were not executed and that the network loss continued to grow until reaching 61% in 2021.
The legal document to which Canal Gestión has presented allegations states that, "without any doubt, these breaches have helped" to prevent the reduction of losses in the network. In addition, it accuses the concessionaire of altering the investments in a "unilateral" way, with works "not contemplated" instead of those that were agreed in the contract and denounces that it "failed" to execute said investments within the deadline. Thus, the legal services of the institution point out that the concessionaire would have been "inflating" the value of the investments that it did make.
Several "very serious" breaches
The contract signed between the Water Consortium and Canal Gestión 12 years ago included the "essential obligations" that the concessionaire had to comply with. Among them, the fulfillment of the committed investments, the payment of the established fees and the obligation to provide information to the Water Consortium of Lanzarote.
However, the resolution of April 2025 signed by the head of contracting of the Cabildo of Lanzarote and deputy director of the legal services, recalls that "the partial or defective breach of the service" allows the Consortium to demand the "appropriate penalties", even rescinding the contract before 2043.
Canal Gestión assumed the renovation of the network and meters, the replacement of membranes of the desalination plants or the improvement of the wastewater treatment plants. However, the legal report states that the company would have committed "a very serious infraction" by "failing" to make these investments.
In total, the Water Consortium defends that the company failed to invest 21.8 million euros and points out as "a fact of special relevance" that it spent 12.9 million on "investments that were not agreed". In addition to a mismatch between what Canal Gestión says it has invested and what the Consortium has audited, for example, in the case of the renovation of meters, the Consortium insists that "the investment that the concessionaire advertises has not been executed".
This report opens the door for the Water Consortium to also "cautiously intervene" in the water service, while processing the termination of the contract and awarding a new one. In this way, the service could be intervened "at any time" in order to "alleviate or avoid the serious disturbance". This takeover can be "more or less intense", depending on the evolution of the provision of the service.
Continuous supply cuts
The Water Consortium points out that the losses, greater than 50%, represent "a serious disturbance of the service". "The unacceptable losses in the networks are giving rise to the impossibility of supplying and providing water to the different municipalities", highlights the report, which points out that the cuts are "continuous and daily". For this, they have relied on information published in La Voz in which cuts are recorded in all the towns of the island in the last year.
According to this document, Canal Gestión recognized in reports from 2023 and 2024 that in Haría the cuts amount to 61% of the days of the year, in Tinajo to 53%, in San Bartolomé to 42% and in Yaiza to 49%. "It is not only a serious and essential breach, but simply unacceptable in an advanced economy", it states.
Loss of desalinated water in the network
One of the most serious points of the legal report comes from the loss of water in the network. The concessionaire company had to search, locate and repair the breakages and leaks in the more than 2,000 kilometers of the network. With this, it had to reduce the losses to less than 30%. However, the legal report points out that "the breach of the obligation is total", "indisputable and "in itself enables the termination of the contract". In addition, it indicates that it is "seriously defective".
The Trama report of 2019 points out that "there is no systematic procedure" to locate hidden leaks, that is, those that "do not surface by themselves". Supported by this document, the legal report exposes "the absence of a telecontrol system" to detect them and the lack of investment in meters.
Thus, the legal document also denounces a "serious breach" in the management of wastewater treatment plants. At the same time, it assures that Canal Gestión could not award the sanitation to another company because it is "a main obligation of the contract" and qualifies it as "a very serious infraction".
Failure to pay the fee
In addition, it indicates that Canal Gestión would have failed to comply with the obligation to pay the fee, since the concessionaire committed to deliver 6% of the aid obtained by the State. In this case, it estimates at approximately 833,000 euros (plus default interest) the money that Canal must pay to the Consortium for the tax deductions to which it has availed itself these years.
Thus, the Consortium adds the "existing difficulties" to compare data with Canal Gestión in the face of "the lack of collaboration" during the intervention of the Cabildo of Lanzarote and the Water Consortium.
The payment of the fee and the lack of information are also two obligations, whose breach opens the door to a new reason to terminate the contract.
If the termination of the contract finally occurs, the Water Consortium may demand from Canal Gestión compensation "for damages" for the detected breaches. In this way, it opens the way for the concessionaire to compensate the Consortium for the remaining value of the investments that it did not make within the deadline.
Finally, the allegations presented by Canal Gestión, the Water Consortium opens the possibility of initiating a new award of the service, if the file is finally resolved.