Agbar aims to tap water privatisation opportunities
Spanish water utility Aguas de Barcelona said Monday it expects local governments to privatise water-management services in order to shore up their income as they look for alternative sources of finance at the end of a massive housing boom.19 February 2008
MADRID - Spanish water utility Aguas de Barcelona said Monday it expects local governments to privatise water-management services in order to shore up their income as they look for alternative sources of finance at the end of a massive housing boom.
Agbar's general secretary, Josep Vila, said local governments had raked in high income in the form of value added tax and building permits from the some 700,000 housing units built annually in the past few years.
Vila said municipalities had been using one-off gains from the property surge to finance current spending.
"Municipal governments are going to have a financing problem, and that is a good argument for them to seek help and look to privatisation as a formula for financing," Vila said at a presentation of Agbar's results for last year.
Agbar's net profit more than doubled last year to EUR 352.54 million after it booked a capital gain of EUR 217 million from the sale of its inspection and certification unit Applus+.
Agbar is controlled by Spanish financial holding company Criteria and by France's Suez, who recently increased their joint interest in the water utility to 90 percent through a public offer.
They plan to reduce their stake in Agbar to 70 percent. Vila said yesterday Agbar has yet to make a decision about how the reduction of the company's controlling shareholders' stake will be carried out.
[Copyright EL PAÍS / ADRIAN SOTO 2008]
Subject: Spanish news