Spanish infrastructure group Abertis said in its most recent corporate governance statement that the political risk in Argentina and Bolivia could lead the company to lose its concessions in those countries, without any compensation from their respective governments.
This year’s statement is a departure from corporate governance statements in 2007-2008, which only spoke of exposure to some economic and currency risks, without pinpointing specific countries. Should it lose its concessions in these countries, Abertis would lose about two percent of its revenues. The company has a stake in an Argentinean toll road and owns Bolivia’s three major airports.
A spokesman from Abertis told InfrastructureInvestor.com that the inclusion of these countries as risk factors in its recent corporate governance report is merely a precautionary measure, since the company has not received any official notification from either country regarding a possible nationalisation of its concessions. But he did say the political risk has increased in both.
In Argentina, Abertis is currently in negotiations with the government and bondholders for Ausol – the concessionaire that operates the northern access to Buenos Aires, and in which Abertis holds close to 32 percent – after the concessionaire defaulted over its debt payments late last year and was placed in administration by the Argentine government.
Abertis let Ausol default after years of frozen tolls, mandated by the Argentine government, threatened the economic equilibrium of the concession. It is now seeking better concession terms with the government and a restructuring of over $300 million in debt. However, Abertis has already booked Ausol at zero value to avoid damaging its results, in case of further problems.
The company’s three airport concessions in Bolivia – El Alto, in La Paz; Viru Viru, in Santa Cruz; and Jorge Wilstermann, in Cochabamba – have also suffered from frozen airport tariffs over the years, but are not at risk of defaulting. Nevertheless, the company has been getting increasingly vocal about raising tariffs to offset increased labour costs.
This has led it to clash with government-backed unions, the spokesman explained, prompting public pronouncements from senior government officials regarding the possibility of re-nationalising the airport concessions. The three airports were awarded in 1997 to TBI, which Abertis acquired in 2005, for 25 years.