Open conflict between Agbar, the Spanish water management holding, and its new sole shareholder, the French group Veolia. The reason: the investments approved by Aigües de Barcelona, ??a 70% subsidiary of Agbar, to deal with the drought in Catalonia and which are mandatory to comply with the law on extraordinary measures approved last year by the Generalitat, according to them various sources consulted by this newspaper for the preparation of the information.
Aigües de Barcelona is the company responsible for the management and supply of water in the Catalan capital and more than thirty municipalities in its metropolitan area, and it must undertake significant investments to deal with the current situation of drought emergency, in accordance with the law approved last year by the Generalitat.
The Barcelona-based company considers that this law obliges it to undertake investments of more than 920 million euros between this year and 2027, and this has been approved by its board of directors, chaired by Ángel Simón.
Until February, Simón was also executive chairman of the entire Agbar Group, a position he left to take on the role of CEO of Criteria, the investment arm of La Caixa. Precisely, Criteria participates in the capital of Aigües de Barcelona, ??with 15%, the same as the Metropolitan Area of ??Barcelona (AMB), which represents the municipalities of the urban conurbation of the Catalan capital. The president of the AMB is the mayor of Barcelona, ??Jaume Collboni, although the executive vice-president is the mayor of Cornellà, Antonio Balmón.
Nevertheless, at the end of February, that is to say, after the change in the executive leadership of Agbar, the Veolia Group approved its new strategic plan, called Green, which, according to sources critical of this plan, have explained to this newspaper only envisages new investments in the field of water concession management. According to this information, the top executives of Veolia now consider that the investments against the drought of Aigües de Barcelona are incompatible with the financial plan they have designed for the multinational group.
The new growth program focuses on areas in which Veolia hopes to obtain higher returns in the short term, a philosophy contradictory to the stability and moderate performance offered by public service concessions to municipalities. The growth priorities of the French group focus on water technologies; bioenergy, and waste treatment, which requires that new investments bring rates of return of 10% from the third year.
Sources close to the French group, for their part, have denied that there is any conflict due to the investments. And they added that “Veolia’s strategy published for the period 2024-2027 is based, among other aspects, on the solidity of the activity that the group has in the management of urban water, and bets on resilience and action in the territories where it is present”.
Veolia enters 13,500 million of this field in the world and Agbar contributes a little less than a quarter, according to the documentation of its strategic plan consulted to prepare this information.
Spokespersons for Aigües de Barcelona have assured that the company has normally approved the planned investments, most of which are underway and which count on the monitoring of the Metropolitan Area of ??Barcelona. The investments are estimated at a little over 70 million for this year and, in the short term, it is expected to have drawn up the project for the execution of the new Besòs water treatment plant, “which would allow closing the circle of regeneration and desalination, and stop depending definitively on the rains to ensure water supply without threats of drought”.
The beginning of the differences between the leadership of Veolia, which is based in the French town of Aubervilliers, in the Paris area, and the executive team of Agbar took place when the former reduced the plan of investments for all of the group’s water supply companies, which provide service to more than 1,100 Spanish municipalities. The initial budgeted amount for maintenance investments for this year, set at 164 million euros, was cut to 128 million, almost 30% below, according to the sources. The discount would be justified with the argument of meeting the group’s profit increase objectives.
Until 2021, Agbar was owned by the Suez Group, also French, when Veolia took control of the former after a complex, long and disputed public takeover bid. As a result, Veolia obtained 100% control of Agbar, the multinational specialized in the integral water cycle and with investments in Spain and Latin America.
Veolia’s acquisition of Suez’s assets in Spain, mainly Agbar, involved subjecting it to the authorization of the Spanish Government, as it provides essential, regulated public services that affect public health. The government gave the green light setting conditions.
One of Agbar’s subsidiaries, Aigües de Barcelona, ??is the supply manager for the metropolitan area of ??the Catalan capital. Although it has been providing the service for more than 150 years, in 2013 it was set up as a joint venture, with its current shareholders.
In May of last year, the Generalitat approved a law on “extraordinary and urgent measures to deal with the exceptional drought situation in Catalonia”, which set a series of priority investments to deal with the lack of rain. And they had as their destination specific supply infrastructures that Aigües de Barcelona manages under a concession regime. These are various performances in the towns of Sant Joan Despí and Sant Feliu de Llobregat and Besòs.
