The president of the Lanzarote Water Consortium, Oswaldo Betancort, has immediately convened the Water Consortium Assembly for next Thursday to terminate the contract for the concession of water supply, sanitation and reuse services for the islands of Lanzarote and La Graciosa.
Thus, the members of the Water Consortium, who are the mayors of the seven municipalities of the island and the president of the Island Council, must vote in favor, against or abstain regarding the adoption of the proposed agreements.
“At the beginning of the legislature, we found that, of the 12 investment lots of the contract presented for justification between November 2015 and December 2022 by Canal Gestión, only the first two had been subjected to technical verification, so intense work has had to be carried out by the technicians to complete the final analysis of the investments presented by Canal”, according to the president of the Cabildo of Lanzarote, Oswaldo Betancort.
At the General Assembly, which has been convened extraordinarily this Thursday at 12:00 noon at the Cabildo of Lanzarote, the legal report prepared by the person in charge of the contract with Canal Gestión will be presented, proposing to initiate the procedure for terminating the current contract.
“In addition, Canal Gestión will be given a period of ten business days to present allegations. And once that process has been completed, a new file will be initiated to award a new contract”, adds the Minister of Water, Domingo Cejas.
Serious breaches leading to termination of the contract
In a detailed report, drafted by the person in charge of the contract, supported by the technical documents prepared in the last year and, especially, in the reports on the degree of compliance with the investment commitment presented by Canal Gestión in its offer, it is concluded that the breaches of the concessionaire are of such seriousness that they lead to the termination of the contract.
The report reveals that the following essential obligations of the contract have been breached:
- The committed investments (54.4 million euros) have not been executed within the period of 5 years, nor in the amounts offered.
- The unilateral modification of investments and execution of works not contemplated in the investment offer has been carried out.
- Breach of the Exploitation Plan, which has led to water losses of more than 55%, far from the required target of 30%.
- Serious disruption of the service reflected in the continuous water cuts in multiple municipalities, affecting the regularity of the supply.
- Failure to pay the variable fee (CANON C) for applied tax deductions, estimated at 833,000 euros.
- Subcontracting of main services, such as the maintenance of sanitation networks.