Who is behind water management in Barcelona?

The answer to this simple question is complex. Multinationals and banks make profit by negotiating with a human right like water. The way they operate is they orchestrate huge confusion, in order to misguide people’s understanding of who is responsible for managing the system, what is the management model (public, private or mixed) and who is hiding behind the great profit that involves managing such an essential good for life like water.

Water is a common good that people need and this makes private management of water a highly profitable source of revenue for multinationals and banks.

The control of water and millions of euros in income grants them great power in capitalist societies. Multinationals and banks are not willing to lose such power and they protect it at all costs: with demands from and criminalization of social movements that defend vulnerable families, through large publicity campaigns, even allegedly through corruption and financing political parties and resisting democratic processes related with remunicipalisation.

In Barcelona, since 1920, Agbar has been behind irregular water management.

Background on Agbar’s Creation

In the year 1867, with the expansion of l’eixample by the plan of Barcelona, in the city of Liège (Belgium) a private company with French and Belgian capital, the ‘Compagnie d’Eaux de Barcelone’, was created and then started to manage the water in the city.

Some years later, in 1881, Crédit Général Liégeois and Société Lyonnaise des Eaux (now integrated into Suez Environnement) agreed in Paris to create the Société Générale des Eaux de Barcelone with the Compagnie des Eaux de Barcelone.

In 1920 the Societat General d’Aigües de Barcelona (SGAB) was constituted. This partnership resulted from an agreement between the Bank of Barcelona, the Hispano Colonial Bank, the Bilbao Bank, the Bankers’ Union and the Bank of Arnús to buy the Societé Générale des Eaux de Barcelone.

It was not until 2010 that the court ruled that Agbar did not have a concession contract to supply water for the city of Barcelona. An Administrative Court of Barcelona declares illegal the rate and the Agbar concession regarding the Barcelona metropolitan area.

In 2013, the Metropolitan Area of Barcelona (AMB) constituted, without tender, the joint venture Aigües de Barcelona (with 85% Agbar assets and 15% for the AMB).

At the end of 2014, La Caixa (through Criteria) entered the mixed company with 15% of the shares. It accomplished this by making a payment of 50 million euros to Agbar.

In 2015, the Anti-Fraud Office of Catalonia noted irregularities in the creation of the joint venture by AMB and Agbar.

In March 2016, the Superior Court of Justice of Catalonia annulled the creation of the mixed company Aigües de Barcelona because of the irregularities of the adjudication process. Agbar went to the Supreme Court and we are waiting for a final judgment.

The national and international expansion of Agbar

SGAB hired Agbar as a trademark in Barcelona, and with the head of Aquadom and Aqualogy, it spread through several nations and autonomous communities under the names of Hidralia (Andalusia), Aquara or Agbar (Aragón), Asturagua (Asturias), Hidrobal or Sorea (Baleares), Canaragua (Canary Islands), Aquona (Antigua Aguagest in Castilla y León and Castilla la Mancha), Agbar and Sorea (Catalonia) Aquanex (former Aquagest in Extremadura), Viaqua (Galicia), Aquarbe (Navarra, La Rioja and Euskadi), and Hidraqua or Sorea (Valencian Country).

Agbar group has been taking over other local companies through more or less aggressive public acquisition offers, such as in the CASSA case, or through the acquisitions of shares in the stock market, as in the case of Mina de Terrassa. All of this with the intention of controlling all water management in Catalonia. In Catalonia, more than 80% of the population gets their water supply from private companies and Agbar provides more than 70%.

The Agbar group has spread internationally and is now present in Chile, the United Kingdom, China, Colombia, Algeria, Cuba and Mexico.

Who is behind SGAB or Agbar?

Since 1920, ownership of Agbar shares has been constantly shifting. However, in recent years there have been more substantial changes:

In 2008, the Suez group controlled 56% of Agbar. Criteria, the investment holding company of La Caixa (now CaixaBank), the remaining 44%. Agbar shares were listed on the stock market until this year.

At the end of 2009, the French group Suez took control of Agbar, with approximately 70% of shares while La Caixa retained 25% of the shares.

A few years later, in 2014, La Caixa transferred all of its remaining shares in Agbar to the French multinational Suez, which now controls 100% of Agbar. At that time, La Caixa brought in 299 million euros in cash, which went towards the goal of taking 7% of Suez.

At the end of 2015, according to the press and the scandal of the 3%, the lawyer Miquel Roca and the high directors of the Suez Environment group left in a hurry the board of Agbar.