On October 25, the Supreme Court (TS) rejected the cassation appeals filed by the Collbató Town Hall, by the Consortium for the Integral Water Management of Catalonia (Congiac) and by Gestió Integral d’Aigües de Catalunya, SA (Giacsa) against the judgment of the Superior Court of Justice of Catalonia (TSJC) of 21 September 2021, which considers the management of the Collbató water service through the Congiac and Giacsa a law fraud. With this decision of the TS, the judgment of the TSJC becomes final and the Collbató City Council has to execute it with a new water service management system that complies with the law. What’s more, the continuity of the Congiac-Giacsa system is absolutely compromised.
The management of local public services and those of water in particular can be direct by municipal company or indirect by concession or joint venture. But there is also that of associative management or horizontal cooperation between municipalities through associations or consortia. In fact, the 2014 concessions directive establishes that public services can be provided by the Administration itself, in association with others -horizontal cooperation- or by resorting to public contracting of private operators.
The Congiac, initially constituted by the city councils of Manresa, Mataró, El Prat de Llobregat, Reus and Vilafranca del Penedès, offers the provision of water services in the municipalities that adhere. The service is provided through Giacsa, a company owned by Congiac itself and by the water companies of the founding municipalities. All this would have the protection, supposedly, of the horizontal cooperation of the mentioned European directive.
The Supreme Court confirms the ruling that establishes that through Giacsa there is unfair competition
However, the Congiac, constituted as a management entity of supposedly common interests of the founding municipalities, is open to all municipalities in Catalonia. It is this universal character that makes the TSJC ruling conclude that the Congiac-Giacsa group is conceived with a market vocation, but avoiding the competition. And not only because of the burdensome nature of the Giacsa-municipalities relationship, but also because of the completely open nature of the Congiac in the geographical and material scope that reveals that there is no determined common interest. The 2014 directive already specifies that it cannot be used to exclude or harm certain economic operators. And precisely the judgment of the TSJC establishes that Giacsa is an instrument aimed at the aforementioned municipal companies being operators of the water sector, in unfair competition with the other private companies in the same sector. The sentence also reproaches that who provides the service in each municipality is not Giacsa, but one of the municipal companies of the founding municipalities of Congiac; in the case of Collbató, it was Aigües de Vilafranca. Likewise, it shows that, in the founding municipalities of Congiac, who provides the water service is not Giacsa, but the respective municipal company. In short, there is neither common interest, nor horizontal cooperation nor, therefore, protection of the 2014 concessions directive.
For more statutory and corporate changes that are made in the Congiac and in Giacsa, the fraud of law that the judgment of the TSJC makes clear cannot be amended.