Spanish developer Abengoa has reached an agreement to sell 80 percent of its stake in the Vista Ridge pipeline in San Antonio, Texas, to Missouri-based Garney Construction.
Should the deal be approved, Garney will assume control of the project, and Abengoa will be reduced to a “silent 20 percent equity partner”, according to a San Antonio Water System (SAWS) statement.
The 142-mile pipeline is expected to provide 20 percent of San Antonio's water starting in 2020. An Abengoa-led Vista Ridge Consortium won the $3.4 billion contract to develop the project in 2014.
The pipeline aims to provide access to the Carrizo and Simsboro Aquifers in Burleson and Milam counties. Current supply, which is limited to the Edwards Aquifer, reportedly decreases by up to 44 percent during drought times.
A SAWS spokesperson told Infrastructure Investor that Brookfield Global Infrastructure Advisor, John Laing and Blackstone had also submitted formal proposals to buy up the stakes, while Meridiam and Queensland Investment Corporation had also reported interest without submitting formal proposals.
Garney rose above the fray due to its long-running relationship with SAWS, the spokesperson said. The company has been in business with SAWS for the past 30 years, completing more than $156 million in major projects work.
“Garney's extensive local experience and strong local relationships will help us move forward with this important project,” said Mayor Ivy Taylor in a statement supporting the proposed acquisition. “Failure to secure our water future is our biggest risk, and Vista Ridge is a key component of our plan to diversify and expand our water supply.”
The SAWS Board of Trustees is expected to consider the acquisition proposal at its upcoming meeting on 5 April, the spokesperson confirmed. This is set to be followed by a briefing to the city council and a public meeting, after which the board would likely take a final vote in late April or early May.
Abengoa's US business filed for Chapter 11 bankruptcy protection on Monday to give the company time to negotiate the restructuring of its debt load of roughly $16.5 billion.