EU compliance will have to wait

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The president of Spanish water industry body AEAS believes Spain’s compliance with key EU directives hinges on PPPs and tariff reform.

Roque Gistau, president of AEAS, the Association of Spanish Water Supply and Wastewater Treatment Companies, categorically believes that “Spain is not going to meet its 2015 target” for compliance with European wastewater quality targets.

Few could claim to be able to speak about the Spanish water sector with more authority than Gistau. Before becoming president of AEAS, he was successively managing director at Canal Isabel II and delegate general for Agbar, respectively the largest public and private operators in the Spanish integral water cycle market.

The government’s €19 billion wastewater plan “needs to be financed through public-private partnerships,” he says, “and that operation will have to be funded via the water charge.” But given the obstacles which need to be overcome, the plan will need “a ten-year rather than a five-year timescale,” he told GWI.

Firstly, “the banks have problems with the dead housing market and, when there’s no money, you can’t do things; you just have to wait. When houses start to be sold again, then the banks will be able to dedicate their resources to other things,” he says. He recognises however that, given the estimated backlog of around one million unsold properties, this may still be some time away.

The second obstacle is politicians’ reluctance to adjust water charges to reflect the costs of the necessary improvements in sewerage and wastewater treatment. “It can be achieved if there is a combination of transparency and political valour,” Gistau insists.

“Because water has historically been viewed as a means of subsistence without cost to the user in Spain, and because of the anarchic way in which water infrastructure has been financed with grants from Brussels or Madrid, by regional governments or directly by local municipalities, local authorities have never felt the need to adjust water charges to reflect costs.”

But Gistau believes that “if local councils succeed in raising charges, it will be an important first step to getting financial institutions to assign funds by giving lenders a guarantee that they will recover their investment.”