Open conflict between Agbar, the Spanish water management holding company, and its new sole shareholder, the French group Veolia. The cause: the investments approved by Aguas de Barcelona, a 70% subsidiary of Agbar, to address the drought in Catalonia and which are mandatory to comply with the law on extraordinary measures approved last year by the Generalitat, according to several sources. consulted by this newspaper to prepare this information.
Aguas de Barcelona is the company responsible for the management and supply of water to the Catalan capital and more than thirty municipalities in its metropolitan area and must assume significant investments to face the current emergency situation due to drought, according to the law approved last year by the Generalitat.
The Barcelona company considers that this law requires 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 last February, Simón was also executive president of the entire Agbar group, a position he left to assume the role of CEO of Criteria, the investment arm of La Caixa. Precisely, Criteria participates in the capital of Aguas 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.
However, at the end of last February, that is, after the change in the executive leadership of Agbar, the Veolia group approved its new strategic plan, called Green up, which according to sources critical of it have explained to this newspaper that it barely contemplates new investments in the field of water concession management. According to this information, Veolia's top executives now consider that Aguas de Barcelona's anti-drought investments are incompatible with the financial plan they have designed for the multinational group.
The new growth program focuses on areas in which Veolia expects 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 French group's growth priorities focus on water technologies; bioenergy and waste treatment, requiring that new investments provide return rates of 10% starting in the third year.
Sources close to the French group, for their part, have denied the existence of a conflict due to the investments. And they added that “Veolia's strategy published for the period 2024-27 is based, among other aspects, on the solidity of the activity that the group has in urban water management, betting on resilience and action in the territories in which that is present.”
Veolia brings in 13.5 billion from this area in the world and Agbar contributes just under a quarter, according to the documentation of its strategic plan consulted to prepare this information.
Spokespersons for Aguas de Barcelona have assured that the company has normally approved the planned investments, most of which are underway and are monitored by the Barcelona Metropolitan Area. The investments are estimated at just over 70 million for this year and in a short time it is expected to have drafted the project for the execution of the new Besòs water treatment plant, “which would allow closing the circle of regeneration and desalination, definitively ceasing to depend on of the rains to ensure the supply of water without threats of drought.”
The beginning of the discrepancies between the leadership of Veolia, whose headquarters are in the French town of Aubervilliers, in the Paris area, and the executive team of Agbar occurred when the former reduced the investment plan for all of the companies in water supply of the group, which provides 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% lower, according to the aforementioned sources. This reduction 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 takeover bid. As a consequence, Veolia acquired 100% control of Agbar, the multinational specialized in the integral water cycle and with investments in Spain and Latin America.
The acquisition by Veolia of Suez's assets in Spain, mainly Agbar, involved subjecting it to authorization by the Spanish government, since it provides essential, regulated public services that affect public health. The government granted the green light by setting conditions.
One of Agbar's subsidiaries, Aguas 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 established as a mixed company, with its current shareholders.
In May of last year, the Generalitat approved a law on “extraordinary and urgent measures to confront the situation of exceptional drought in Catalonia”, which established a series of priority investments to address the lack of rain. And they were destined for specific supply infrastructures that Aguas de Barcelona manages under a concession regime. These are several actions in the towns of Sant Joan Despí and Sant Feliu de Llobregat and in the Besós river.
