At the Lanzarote Water Consortium Assembly, held on Thursday morning, the content of the allegations presented by Canal Gestión to the file for termination of the water management contract and the preliminary study prepared by the legal services of the Island Council were reported.
The preliminary legal study not only responds to the allegations presented by Canal Gestión to the contract termination file, agreed at the Water Consortium Assembly on April 10, but also maintains the arguments already made public regarding the breaches of essential obligations.
The president of the Cabildo and the Water Consortium, Oswaldo Betancor, assures that "we are convinced that the law is on our side because Canal Gestión's breaches occur in obligations as essential to the contract signed in 2013 as not making the planned investments or not reducing water losses to 30 percent."
Among the essential breaches of the contract by the concessionaire entity are not only the reduction of losses to 30 percent, or the investment of 54.4 million euros in the first four years, but also the failure to carry out a plan for the detection of leaks in the network, the failure to settle mandatory fees with the Consortium, and the subcontracting of services such as sanitation that were not delegable.
"What we have presented to all the mayors is the preliminary legal report and now we are awaiting the issuance of the technical reports that are being prepared by the staff of the Cabildo, the Consortium and the Island Water Council to subsequently issue the proposal for definitive termination of the contract," said the Minister of Water of the Cabildo, Domingo Cejas.
Response to Canal Gestión's allegations
The preliminary legal report states that, contrary to what Canal Gestión claims, the law does not require prior warning of the initiation of the contract termination file, "the verification of the breach being sufficient."
Nor, the report assures, is it inappropriate to initiate a new procedure for the award of a new contract, as the contractor points out, since "the initiation agreement is based on the need to guarantee the continuity of the service."
Regarding the absence of the tariff revision claimed by Canal Gestión, the Consortium responds with what was collected by the Canary Islands Prices Commission, the body that must authorize them, and which has not given its approval to the updates precisely, among other arguments, due to the high losses in the network.
In this regard, the Consortium's report points out that "the origin or not of the right to tariff revision is outside the scope of this administrative procedure, the various administrative resolutions having been appealed in the contentious jurisdiction, the result of which will not diminish the breaches noted, affecting, where appropriate, the contract liquidation procedure in the event that it obtains a judicial ruling in its favor."
It is also rejected that in the integral water cycle contract between Canal Gestión and the Water Consortium there is any reference to the obligation of investment by the latter public entity. And it adds that Canal Gestión "confuses the principle of administrative collaboration with a claim of co-responsibility."
The file on Inalsa's creditors' meeting is incomplete
On the other hand, at the General Meeting of Inalsa, held prior to the Consortium Assembly, it was reported that neither Inalsa nor the Water Consortium have many relevant minutes for the procedure that is followed in the qualification piece the Commercial Court number 1 of Las Palmas.
At the General Meeting of Inalsa, a chronology of events was detailed that no member of the Consortium was aware of. And it is that, according to the secretary of the Board of Directors of the public company, in December 2022 the administrative staff of the Water Consortium and Inalsa informs her that the minutes books for the years 2009, 2010 and 2011 were not found either in the general archive of the Cabildo or in the dependencies of the Consortium, with only a certificate of February 18, 2010 appearing.
According to what was reported to the members of the General Meeting of Inalsa, and later to the members of the Water Consortium, the disappearance of said documents was brought to the attention of the Investigating Court number 2 of Arrecife in February 2023. And in addition, according to information collected by the administrative staff of both entities, the documentation initially existed in the archives and at some point was extracted without being reintegrated again.
Already on the current date and in the current month, once the Commercial Court proceeded to open the qualification of responsibility of the Boards of Directors for the period 2007-2009, said minutes are of special relevance.
These facts that have been brought to the attention of the General Meeting of Inalsa and the Assembly of the Water Consortium of Lanzarote today, communicating that they will be transferred to the Commercial Court for its knowledge.
All those present were unanimous in considering the facts as "especially serious", and agreed to open a Commission of Inquiry to clarify the disappearance of the documents. The creation of this body will be proposed at the next General Meeting of Inalsa, with all attendees agreeing that it should be held as soon as possible.