According to the report, the former Highway Concession Control Agency (OCCOVI) failed to regulate the rate adjustment process provided for in the contract. “The failure to carry out the Review Instance left the concession without an updated economic and financial projection that would allow adequate monitoring of profitability,” says the document, which also highlights: “During the audited period, rate updates were made based on a Financial Economic Plan that did not reflect the reality of the concession”.
Specifically, the document highlights that the rate increase processes analyzed generated a strong increase in revenue and net profitability for the Concessionaire in relation to 2015, despite the fact that solid operating profitability indicators were already evident, with a gross margin of 42.4% and EBITDA margin 33.8%. According to the AGN, these indicators had an accumulated increase of 297% and 312% respectively in the 2016-2018 biennium.
According to the AGN, the return for shareholders has been several times higher than the stock market average. “Taking into consideration the price of the share at the close of 12/30/2015, ($18.00), the dividends received per share, which totaled $9.37 until the payment of dividends made on 04/25/18, and the share price on that date ($116.50), shareholders had an accumulated internal rate of return of 636% in that period, while the Merval index had an accumulated increase of 156% for the same period,” the official text details. .
For the auditors, this was due to a series of irregularities. Among them, that the normative criterion of “reasonable profitability” of Law 17,520 of Public Works Concession was not taken into account in all the rate adjustment processes. The “absence of execution of works by the Concessionaire during the assessed rate adjustments” is also highlighted.
harm to users
On this last point, the audit reveals that in the rate adaptation process “the effective execution of the Works Plan was not analyzed, in order to guarantee a reasonable relationship with the profitability of the concession.” From there arises one of the conclusions of the report: the accumulation of irregularities directly harmed users. Due to the aforementioned increases and the absence of improvements in the traces.
Among the responsibilities assigned to the audited office was keeping the Record of Investments executed, as well as monitoring the profitability of the concessions, and verifying the reasonable relationship between them. When the AGN requested this record, its absence was evident. In other words, within the audited period it was impossible to verify the correct execution of works and their correspondence to the level of planned investments.
However, the works carried out during the time analyzed were financed exclusively with funds from the portion of the fee paid by the user of the highway to carry out projects or maintenance. So the report suggests that the irregularities resulted in less infrastructure and more profit for shareholders.
legal bid
In September of this year, the Government published a decree instructing the Treasury Attorney to take legal action in order to annul the extensions of the North Access and West Access concessions. According to the document exhibited by the Executive, the contracts “committed the State to a million-dollar debt, non-existent and harmful to the interests of the users and whose existence has not been proven.”
This extension signed during the Government of Macri, former majority partner of Autopistas del Sol, one of the firms involved, also established the extension of the concession for 10 years and the dollarization of the rates. The federal judge in Administrative Litigation Enrique Lavié Pico allowed weeks ago to designate an auditor in that company to review the contract renegotiation process.
In any case, all eyes are on resolving the underlying issue. In the Government they warn that if the conditions established by the decree signed during the previous administration had been followed, the increases in the tolls of the North Access would have multiplied by twenty.
Source: Ambito
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