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Canal Gestión requests contract termination for water management in Lanzarote due to breaches

The company alleges "critical and systematic breaches" by the Water Consortium, which had also initiated procedures to end the agreement.

Close-up of a water pipe with a slight leak, reflecting the blue sky and a hint of volcanic landscape in the background.
IA

Close-up of a water pipe with a slight leak, reflecting the blue sky and a hint of volcanic landscape in the background.

The company Canal Gestión has initiated legal actions to terminate the water management contract in Lanzarote and La Graciosa, citing serious breaches by the Water Consortium.

The company responsible for the integral water cycle in Lanzarote and La Graciosa, Canal Gestión, has taken the first legal step to request the termination of the concession contract. The company argues that there are "critical and systematic breaches" by the Water Consortium, an entity composed of the island's Cabildo and the seven local councils.
This decision comes one month after the Consortium itself announced its intention to break the contract, which still had 17 years remaining. Canal Gestión justifies its stance after "more than twelve years providing the service in a scenario of legal and technical hostility," according to a company statement.
The Canal Isabel II subsidiary points out that the Consortium failed to fulfill its commitment to execute and finance investments worth 78.7 million euros. They add that Canal Lanzarote advanced a canon of 50 million euros which, instead of being used for infrastructure renewal, was utilized by the Consortium for "purposes unrelated to the service," exacerbating the "initial deficient state of conservation" of the networks.
The company criticizes the "inexplicable abandonment of the committed investment by the Cabildo of Lanzarote," which has led to a "degradation of water infrastructure" detrimental to both the inhabitants and Canal Gestión's operations.
This investment imbalance is compounded by the "deliberate blockage of tariff updates" since 2017. Despite being recognized by a final court ruling from the Superior Court of Justice of the Canary Islands, the Consortium has avoided tariff reviews, creating a deficit exceeding 40 million euros which, according to the company, the Cabildo will have to pay.
Canal Gestión also accuses the Consortium of imposing contractual modifications and unilateral work orders that have "arbitrarily altered the essential conditions" of the 2013 award, exceeding legal limits and bypassing established procedures.
Regarding the service intervention announced by the Consortium, the company considers it "an enormous and unjustified grievance." Therefore, Canal Gestión Lanzarote has requested the termination of the contract and compensation for the economic damages suffered.
For its part, the Water Consortium of Lanzarote, chaired by Oswaldo Betancort, has initiated procedures to temporarily intervene the service. The objective is to address the "breaches" by the concessionaire which, according to a technical-administrative report, are causing "serious disruption to the service" and "damage" to users' interests, making the administration's action "obligatory."

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