Through a brief report published in May of this year, the Spanish association of public water suppliers, AEOPAS, wanted to warn of the risk of privatization of several public enterprises in the water supply sector. The study consisted of three operators from the Basque Country, two of whom, the vitorian AMVISA and the Bilbao Bizkaia Water Consortium, were in the risk podium, second and third respectively.

After analyzing several risk factors, AEOPAS presented the results on a scale from 0 to 5. The top three operators on the list were in a range greater than 3, i.e. in an area with a “high risk of privatisation”. In particular, the authors of the report allocated 3.18 points to AMVISA and 3.05 points to Bilbao Bizkaia.

In the case of AMVISA, to say that the spectre of privatization circulates in the environment should not surprise anyone, as the background is very clear. In autumn 2012, Javier Maroto announced his intention to partially privatize the public operator supplying water to Vitoria-Gasteiz. The mayor said that under no circumstances would the city council lose control of AMVISA, as a maximum of 49% would be placed in private hands, but that did not reassure opponents of the project, including opposition parties. The expert in this area, Pedro Arrojo, explains that the absence of the majority of the property does not prevent private companies from having real power in water operators, as long as the management remains in their hands. The fear of a significant increase in the rate also played a prominent role in the debate.

Vocation of advertising and yet...

The Maroto plan was not implemented, but it was close to privatizing AMVISA. In any case, it can be said that in the civil society of Hego Euskal Herria has strong roots in the belief that water management should be public. In a way, it's an unwritten law. This is also believed by AEOPAS, and in spite of this, the Bilbao Bizkaia Water Consortium is among the most vulnerable to losing public character. How do you explain it?

For the preparation of the above-mentioned report, AEOPAS analysed three indicators: transparency, institutional risk and economic risk. In the transparency section, Bilbao Bizkaia obtained a score of 2.85 points on the scale from 0 to 5 and in the institutional risk score of 2.50. In this second area, operators and related political authorities, among others, took into account statements in favour of public privatisation.

The Secretary General of AEOPAS, Jaime Morell, acknowledges that the Bilbao Bizkaia Water Consortium has not distinguished itself especially in such statements, while the leaders usually give a message of public management. And so he responded to ARGIA, when we asked him directly on the subject, a representative of the communication area of the consortium: Bilbao Bizkaia has no intention of privatising. “This issue is not on our agenda, nor does it arise.”

Too much subcontracting: public, less public

“There have been no privatizations in Euskadi like those in other parts of the State, that is, it has not been granted directly to a private company,” says Jaime Morell, “what we have detected, in the case of the Bilbao Bizkaia Water Consortium, is a fairly high percentage of outsourcing”. According to the secretary of AEOPAS, if subcontracting takes on a significant weight – in the case of Bilbao Bizkaia it is around 60% – control and transparency are weakened, as well as the quality of the service, “despite the strict conditions imposed by the administration on the company”. Morell considers it normal that some external contracts should be made, but the service should be provided almost entirely from the public sphere.

In the area of economic risk analysed in its report by AEOPAS, the volume of contracts to external companies is one of the most important factors. Jaime Morell explains that oftentimes having a significant percentage of subcontracting is the concession portal to a private agent. “However, I do not believe that in the Basque Country they dare to take that step.” But he warns: “Being a public consortium that only manages contracts can be considered, in some way, a secret privatisation.”

In the absence of detailed information, the Secretary-General of AEOPAS is convinced that the Bilbao Bizkaia Water Consortium would receive the offers from the world’s largest companies to obtain the grant of the management. These companies are, in short, the ones that the consortium hires for various works, especially the Spanish transnational Acciona.

Concentration as an objective

In the economic risk section of the AEOPAS report, Bilbao Bizkaia has a significant number of points: 3.6. However, this is not the only reason why many subcontracting takes place, but there are other factors that make the Biscayan consortium attractive to companies in the sector. “We are very clear about the conditions to privatize a public operator: a large volume of business, under control of income and debt, areas with a large population... In Bizkaia there is all this.”

Morell has mentioned areas of large population. As for the population supplied, Bilbao Bizkaia is the largest water consortium in the Basque Country, and wants to be even larger. Anyone wishing to do so can read in the foreword of the organization ' s statutes a part of the history of its dissemination: The consortium was created in 1967 by Bilbao and nineteen municipalities in the Bilbao area. In the 1990s, other peoples of the country began to integrate, until today.

Year after year, more and more Biscayan municipalities have become members of the consortium. It currently consists of 80 municipalities, together with the Provincial Council of Bizkaia and the Basque Government. In total, 90% of the Biscs live in one of the localities of the water consortium to serve Bilbao and its surroundings. But the objective, at least that of the institutions that are in the hands of the PNV, is to reach 100%.

The Member, committed to a single consortium

The Deputy General of Bizkaia, Unai Rementeria, showed last July in his investiture speech the following compromise: “We will help ensure that all Biscayan people have a water and sanitation service of the same standard quality and effectiveness.”

The meaning of this phrase is much better understood after reading the agreement signed a few years ago between the Provincial Council of Bizkaia and the Bilbao Bizkaia Water Consortium. Under this agreement, the Member will try to have a single consortium, which will have to be implemented jointly. And not only that. Between 2008 and 2015, the Bilbao Bizkaia Water Consortium received EUR 316 million for the financing of infrastructure works.

What is missing from the Bilbao Bizkaia Water Consortium for all municipalities in the province to pick them up on their lap? As can be seen from the map of the LATERAL/INFERIOR/PROXIMAL LEAF, half of the 32 municipalities that are not in Bilbao Bizkaia form the Busturialdea Water Consortium. In the previous legislature, with the majority of EH Bildu, they faced the pretensions of unity of the Provincial Council, of the Basque Government and of Bilbao Bizkaia, but since the elections in May it is again the Jeltzales that dominate Busturialdea, and it was only a long time ago that the whole region was integrated into Bilbao Bizkaia and fulfilled the will of the Mayor Consortium. The greatest obstacle to the establishment of a single consortium in the country can be regarded as missing.

Iratxe Arriola, who was president until May, complains that during the four years of her term of office many subsidies have been refused to the Busturialdea consortium, thus preventing the development of some essential infrastructures, as a measure of pressure to force Bilbao to join Bizkaia. Arriola has pointed out that the dream of the PNV is that not only in Bizkaia, but throughout the CAV there is only one consortium. “That wouldn’t be bad in itself if proper public control was made, but Bilbao Bizkaia works with parameters of a private business.”

Next debate: Who should pay for the investments?

Iratxe Arriola accuses the Bilbao Bizkaia Water Consortium of being opaque and acting from a mercantilist perspective, treating citizens as mere customers. “Now, moreover, they want to increase the depreciation of investments in invoices, which can lead to an increase in the rate,” he explained, “but in a public service the cost of investments should not affect users; otherwise, what is the difference between public and private?”

At the plenary session of the Bizkaia General Meetings on 25 November, MEP for Sustainability and the Natural Environment, Elena Unzueta, defended the idea of a single water consortium, underlining the benefit of homogenizing the service and harmonising the rate. Unzueta argued that it was almost a necessity to have a single operator, as municipalities will not be able to meet the requirements laid down by European legislation on their own.

The Basque Government is studying how to transfer this legislation to the CAPV, and in particular, the decree that Lakua wants to carry out foresees an intense debate on the issue raised by Iratxe Arriola: whether or not it is a matter of making the public pay the investments made through tariffs. “The Bilbao Bizkaia Water Consortium says that there is no need to worry, because without large fee increases they will be able to deal with 95% of the investments, but I am not so clear. Why then so much subsidy? There is a risk that the new decree will greatly increase the rate.” SCHMIDHUBER, Member of the Commission. — (DE) Mr President, ladies and gentlemen, I should like to begin by congratulating Mr Schmidhuber on his excellent report. This was expressed by Biscayan Juntero Mikel Kormenzana at the session of the General Meetings on 25 November.

Excessive dependence on zadorra

Kormenzana herself has told us that another of the evils of the Bilbao Bizkaia model is excessive centralisation. Since most of the water comes from the Zadorra system, one aquifer overexplodes and discards the others, and with them small local infrastructures “to reduce costs”. Most of the water reaches Bizkaia from Álava and becomes drinkable in a single plant. According to Iratxe Arriola, transporting most of the water through a single conduit is dangerous to health. “In the event of a failure in this tube, 70% of the Biscay would be left with water, and also with no short-term alternative, because the existing local infrastructure is not maintained.”

Time will tell what will happen to the more than 50 water catchments currently used in Busturialdea, following the travel of sixteen municipalities to the Bilbao Bizkaia Water Consortium.