Supreme Court rejects Abertis’ demand for 4 billion for AP-7

The Supreme Court struck down one of the options that Abertis Legal Services had most often worked on to improve its value and financial condition. The High Court, after more than two years of deliberation, rejected most of the arguments in the appeal by the concessionaire controlled by ACS and Mundys (formerly Atlantia).Abertis demanded a total of 5.373 million euros from the state. (it raised $1,070 million in 2021) to settle a controversial bill to offset extraordinary investments made by Acesa, a subsidiary of Abertis that operated the AP-7 highway until 2021. It was the most profitable fare in Spain until it was declared free.

The Supreme Court, which released its decision yesterday, rejected Abertis’s arguments regarding the accounting for compensation for differences between actual and planned traffic included in the agreement signed with the state in 2006. He agrees with him only on small issues related to the work performed, and not collected.

“The agreements and provisions of the agreement do not make any reference to or include any agreement between the parties regarding the transfer of demand risk, nor does it establish any guarantee of movement in favor of the concessionaire, but only compensation to Asse for investments and work performed with appropriate modification,” the Supreme Court says, rejecting arguments that Abertis always considered valid.

The company, led by Juan Santamaria, did not comment yesterday as it waited for its lawyers to complete a detailed reading of the Supreme Court decision. After years of litigation, their options include an appeal to the Constitutional Court or taking the case to an international body, perhaps the European Court of Human Rights in Strasbourg, according to sources interviewed.

The legal setback yesterday sent the stock market plummeting for ACS, which controls 50% of Abertis through its Spanish parent and German subsidiary Hochtief. Construction company, whose shares fell by 9.9% on the stock market (35.6 euros per share), At the end of 2023, he expressed optimism about this lawsuit, which originated in 2006 with the signing of an agreement to expand the AP-7 highway. In turn, Hochtief shares fell 9.1% to 99.4 euros per share.

It was in 2006 that an agreement was signed between Abertis and the then Ministry of Development, headed by socialist Magdalena Alvarez. lThe concessionaire has undertaken to widen the section of the AP-7 motorway between La Jonquera (Alt Empordà) and Salou (Tarragones) by one lane, has undertaken the implementation of certain free benefits and has waived claims for compensation for the division of parallel roads (H-II in Girona and N-340 in Tarragona).

For experts, The fight between Abertis and the state is deepening disagreement over the legal security of Spain’s concession regime, which is in deep doubt due to a backlog of cases that have been bogged down in the courts for years, diverting investor interest to other infrastructure markets where the public encourages private cooperation.

Keys to Agreement

The agreement between Abertis and the state defined two types of balances to restore the economic-financial balance of Achesa: one for investment and the other for guaranteed traffic. After the first legal battle, the state admitted the former. 1.070 million was paid out in 2022. Abertis has 110 million pending for this concept included in the 2022 accounts.

It was in the compensation for guaranteed traffic that differences exploded that the government had never intended. The increase was expected to occur year on year between 2006 and 2021, when the concession expires. If there had been more traffic at the end of the contract, a positive balance would have been created for the state, but the opposite ended up happening due to the various crises experienced. The result was a record-breaking lawsuit.

In 2023 Abertis filed an administrative dispute and a claim in the Supreme Court against the agreement of the Council of Ministers of February 18, 2022, under which the initial 1.070 million was paid. The concessionaire demanded recognition of the entire balance amount. However, the Supreme Court rejected Abertis’s arguments. “An agreement of this kind, which guarantees the concessionaire a certain volume of traffic, is contrary to the legal regime of highway concessions, since it involves the elimination of risk,” the High Court interprets.

In terms of its scope, the AP-7 claim is the most significant administrative dispute in Spain. The state faces other lawsuits worth millions of dollars over other highways, such as radio station bankruptcies.