The multinational companies Acciona and Actúa (Hozono Global Group) have sent a letter to the Torrevieja City Council saying that they have formed a 50/50 joint venture to handle rubbish collection, street cleaning, and beach cleaning in Torrevieja. They are also asking the local government for permission to do so.
Acciona, the current contractor for the municipal service, is giving half of its stake in the contract to Actúa. Together, they will run the contract, which has been in effect since mid-2022 and is worth €424 million over fifteen years (including VAT and future changes). The new company will be called “Cuida Torrevieja” (Take Care of Torrevieja). The city spends €25,784,331 a year on this, and during the busiest times, it has around 400 staff.
Board of Directors
The governing board should soon ratify the agreement when the Director of Legal Affairs and the Director General of Procurement have looked it over and given their approval. The Public Sector Procurement Law sets out a number of requirements that must be completed in order to do this.
These requirements include getting permission from the Torrevieja City Council first, that the contractor, Acciona, has finished 20% of the original contract or one-fifth of the contract period, which has already happened; and that the assignee, Actúa, has the ability and financial means to take on its share. A public deed must make the agreement official.
Another limitation is that the tender specifications must clearly disclose that this assignment is possible. The City Council’s standards don’t say anything about this kind of assignment, but they also don’t say it’s not allowed. The word “assignment” only appears once in the 76 pages, and that’s when the original corporation cancels or returns the guarantee. This suggests that the formation of a joint venture and the assignment are allowed under this contract.
Growth
The Hozono Global Group, led by Manuel Martínez Ortuño, is a company that builds public infrastructure and provides services. It had a turnover of 241 million euros in 2024. This is a great chance for them to get into the waste collection business in a big way, working with one of the most international Spanish companies.
Hozono wanted to run this fundamental service in Torrevieja, which has 110,000 people living there. They had already bid on the rubbish collection contract, but their offer was not accepted.
Supplier
Since 2019, when Eduardo Dolón and his Popular Party administration took over the local government, the Hozono Global Group has been the City Council’s principal provider of services and construction. The company and the municipality have a close relationship because they won public tenders for projects like fixing up the La Mata pedestrian path, building a new sports centre in the same district, fixing up neighbourhood sports courts, and maintaining public roads.
This was made stronger by a number of contracts related to the redevelopment of the waterfront. These included the demolition of the Paseo de La Libertad and the adaptation of the fairgrounds, as well as the construction of the footbridge connecting the Levante breakwater to the new Port leisure centre and the renovation of the Ice Factory building, which are all currently in progress. These contracts are worth more than €20 million to the city. The process ended with the granting of a ten-year contract worth an estimated €113 million to maintain parks and gardens and build additional green spaces. This contract will start in 2025.
Not as good as expected
The City Council engaged an outside engineering company to make sure that Acciona followed the terms of its existing contract. The company started working on this in the summer of 2023, a year after the contract started. The service is much better than it was before because the personnel has been strengthened and all the machines have been replaced, but it doesn’t live up to the expectations it set.
Since then, there have been ongoing disciplinary actions and fines for major and extremely serious breaches of the contract specifications, albeit some problems have been fixed over time. Acciona’s legal department is appealing all of these cases in court. The fines are taken off the bills, and since these penalties started, they have already added up to more than one million euros.
A few weeks ago, the firm and the City Council had another quarrel about cleaning the streets and picking up trash in the first phase of the La Hoya residential area. The City Council said that the rise should happen slowly, even though the corporation wanted to apply the higher prices to the whole region, even though just 150 residences were occupied.
Trash started to build up in the street. Eventually, an agreement was made in which the City Council would pay the full cost of cleaning the streets each year and part of the cost of collecting containers. But the contract’s guaranteed annual rise, which was set when this urban growth plan was put into action, is now €1.4 million.
Service quality
People don’t think the service is very good, which is a shame because the City Council spent a lot of public money on it. Some of the service’s key goals, including collecting organic garbage separately, haven’t been reached, and the city still doesn’t have the brown bins that the legislation says it should have by 2023. Some locations still have too much trash at container collection points, especially during high season.
The regional administration has told the municipality, which is responsible for more than 50,000 tonnes of rubbish in the Vega Baja region, that it needs to follow the law. Torrevieja said it will do this starting in February, when it sends out 900 containers.
A little piece of history
There are some problems between the City Council and Acciona, and the corporation hasn’t been very good at letting people know what it’s doing in the city. Acciona announced the multi-million euro contract award in the middle of 2022 through its marketing channels, calling it a “renewal” of the service. It started doing business in the city in 2004 as part of a partnership with Generala and then on its own. A contract led to the conviction of Pedro Hernández, the previous mayor of Torrevieja, for corruption because he rigged the bidding procedure in favour of the multinational.
The High Court of Justice, which tried Hernández Mateo as a protected official and a regional delegate for the People’s Party (PP), did not cancel the administrative act or the contract that went along with it. The ex-mayor spent more than two years in prison for lying on official papers and abusing his office.
Author: Derek Appleton
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