Why does Ayuso have to invest 22.8 million to “urgently” renew the network that supplies water to the Canary Islands of Lanzarote and La Graciosa?

Why does Ayuso have to invest 22.8 million to “urgently” renew the network that supplies water to the Canary Islands of Lanzarote and La Graciosa?
Why does Ayuso have to invest 22.8 million to “urgently” renew the network that supplies water to the Canary Islands of Lanzarote and La Graciosa?

Isabel Díaz Ayuso visits some works on the Canal de Isabel II

He Canal de Isabel IIthe largest public company in the Community of Madrid, not only manages and treats water that the people of Madrid drink. Since June 2013, it has also been responsible for the supply and sanitation network in the Canary Islands of Lanzarote and La Graciosaserving 208,000 inhabitants. In the area, rainfall is generally very scarce, so Canal Gestión Lanzarote (the company created by the Canal to carry out the concession) operates with four seawater intakes that are transformed into water suitable for consumption by exploiting four desalination plantsThen, through 1,513 kilometers of pipes, the water reaches seven municipalities which include 75 small towns. The Canal manages and treats 29.4 million cubic metres.

Canal Gestión Lanzarote (company 100% dependent on the Canal) won the concession in 2013against two other candidates: Canaragua (subsidiary of Aguas de Barcelona) and Gesture (subsidiary of the French multinational group Saur). The fee to be paid by the concessionaire was 50 million euros, with a minimum required investment of 15.7 million in the first five years. The contract period is 30 years, lasts until 2043. In exchange, the compensation received by the concessionaire is the right to charge the corresponding rates to subscribers based on the degree of use of the different public services provided. What is the Community doing managing the water of two islands that are 1,577 kilometers from Madrid? The answer is that in 2013 the regional government, then presided over by Ignacio Gonzalezcontinued with a process of expansion and business lines that had already taken the Canal to other South American countries.

But the problem is that Canal Lanzarote has turned into a bottomless pitAs a concessionaire, this subsidiary “has the obligation to operate and maintain the facilities included in the concession contract, whose owner is the Lanzarote Water Consortium, a local public entity. Canal Gestión Lanzarote, as the network operator, has repeatedly communicated over the last few years the poor condition of the infrastructurehighlighting the high risk of shortage“, the Channel explains. In other words, the owner of the networks is the Consortium, but the Channel operates them.

In August 2023, the Consortium committed to making investments of 90 million euros. But while these investments are being carried out, Canal Gestión Lanzarote “will continue to provide all the technical support to correct the deterioration of infrastructure”, which “in order to provide a quality service, we take care of the rapid repair of breaks, the execution of leak detection campaigns and the efficient management of pressures in the networks”.

For example, when the Canal arrived in Lanzarote in 2013, there were some 10,000 annual breakages 1,500 kilometres of pipelines. In 2017, the situation did not seem to have improved, because 46% of the supply was still lost due to breakages and fraud. What statistics are currently being handled? Canal has not offered data after the request of Infobae Spainbut in a recent parliamentary response to a request for information from the socialist deputy Diego Cruzthe Community of Madrid reports that in 2022 more than 100,000 buildings were repaired. 10,850 breakdowns on both islands. It seems that everything remains the same.

For this reason, the regional government headed by Isabel Díaz Ayuso is bidding for a contract for 22.8 million euros for “urgent actions of renovation and repair in the hydraulic networks and associated infrastructures of the islands of Lanzarote and La Graciosa”.

Canal Gestión Lanzarote headquarters

The contract includes “urgent repair, maintenance and renovation actions in the network of Potable water supplyregenerated and sanitized Canal Gestión Lanzarote, corresponding to the geographical areas of the islands of Lanzarote and La Graciosa, and any works that need to be carried out urgently in the supply and regenerated water network and in its associated elements and facilities.” The mere mention of the word urgent reveals that breakdowns are the order of the day. The works include the municipalities of Reef (which has 14 population centers), Aunts (seven cores), Yaiza (15), San Bartolome (5), Tinajo (9), Take it (10) y Teguise (with 21 population centres). The contract is for three years. How much money has the Canal already invested in its Lanzarote subsidiary? There is no data.

Waiting to know the 2023 income statement, Canal Lanzarote has made losses in 2020, 2021 and 2022which has caused its parent company in Madrid to have to grant a loan of 153 million euros to its subsidiary. According to the Community of Madrid, the covid pandemic caused consumer income to fall in 2020 and 2021 because the islands live off tourism. Then came the Russian invasion of Ukraine, which raised the electricity price. And it must be taken into account that all the drinking water that Canal Lanzarote supplies to its users is desalinated sea water, the process of which requires a lot of electricity. energy expenditure The company’s revenue grew by 63% in 2021 and 121% in 2022, exceeding 25 million euros.

The hidden village of the Canary Islands, located at the foot of an impressive volcanic sand beach.

The government of Cristina Cifuentes studied very seriously in 2017 and 2018 Put on sale its concession on the island, valid until 2043. At that time, the idea prevailed that the Community of Madrid should get rid of all its businesses outside Madrid’s borders, which included selling all its shares in the South American subsidiaries and the one in Lanzarote.

The Canal even signed a consulting contract for this divestment process with the Santander Bankwho received 900,000 euros. But with Ayuso the plans have changed. “As for the possible disinvestment of Lanzarote and the abandonment of the concession, neither has it been raised nor is it currently among the company’s objectives,” the Canal stated. The Lanzarote concession employs 194 people with salaries totalling 10.5 million euros.

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