Acciona considers that the projects for new public works concessions in Spain have been “absolutely out of the market” after the latest rate hikes and the uncertainty associated with inflation, with which the country could miss the takeoff of infrastructures that are already experiencing other regions of the world.
“There are a series of limitations on the rates of return that make it very difficult for the market to be active in concessions,” said the group’s president, José Manuel Entrecanales, at the press conference to present the annual results.
“If the return contemplated in the legislation for new concessions was already below the minimum required, with the rate hikes they have already been completely out of the market,” he stated. “Something should be done to reactivate the concessions market” because “Spain is in dire need of new infrastructures” whose development will be very “limited” if it is carried out only with public capital.
The association of construction companies Seopan calculates that there are concession projects paralyzed for 3,000 million euros due to the “regulatory blockade” caused by the law of de-indexation of the economy approved by the Government of Mariano Rajoy, which decouples cost and price reviews from the CPI . Seven out of ten projects do not prosper, according to this association.
Like other construction companies, Acciona is also betting on concessions for the construction of highways, hospitals, water infrastructures and all kinds of public facilities. Spain is a residual part of its portfolio of concession projects, which total 83,000 million euros and have associated investments of 11,500 million euros. 36% of projects are located in Asia and Oceania, compared to 23% in North America, 21% in Emea and 20% in Latin America.
Entrecanales also considered it necessary to expand the extraordinary price review mechanism for public works tenders launched last year by the Government to reflect the rise in construction costs and prevent the economy de-indexation law from forcing operators to work at a loss “It’s an ineffective model,” he said.
The president of Acciona also described as “interesting from a technical point of view” the project to build a new runway at sea for the El Prat airport. In Barcelona there is a “lack of land” and “surely it would be more practical to take the track out to sea,” he said. His company will be attentive to the opportunities around the expansion of the aerodrome.
The group stands out from the large corporate operations in the sector in Spain. He is not interested in buying assets for sale from Sacyr or OHLA, and for the moment he rules out selling an additional stake in Acciona Energía because he does not need resources to grow and because his business is now “quite balanced.”
Entrecanales said that for the moment the rate increases are not affecting sales or real estate developments in a “significant” way and predicted that “in two or three months” there could be news about Acciona’s new electric car.
The group’s renewables subsidiary, Acciona Energía, is one of the energy companies that must pay the new government tax for “extraordinary profits” derived from the war in Ukraine. However, the figure is small, “just 15 million euros out of the 1,500 million that we pay a year in taxes, between supported and collected.”
Acciona earned 441 million euros last year, 32% more than in the previous year, thanks, among other things, to the energy subsidiary, which increased revenue by 120%, to 2,111 million euros. The infrastructure division ended the year with a record portfolio of 22,020 million, 21.7% more.
