MADRID Feb 18 Spanish water company Agbar
AGS.MC said on Monday it anticipated a rise in business as
towns privatise water systems to gain a new source of income to
compensate for the end of a residential construction boom.
Agbar hopes to pick up water management contracts as towns
sell off municipally run systems to compensate for a fall in
value-added tax income from house construction and sales.
"Towns are going to face a financing problem, and this is a
good argument for them to seek help and turn to privatisation as
a financing formula," Agbar Director General Jose Vila Bassas
said during a conference call after the firm reported a 111
percent rise in 2007 net profit after a unit sale.
Spain's central and regional governments could see tax
income from construction and property activity cut by a third as
tighter credit conditions and oversupply cool the sector,
Spain's Cinco Dias newspaper reported on Monday, citing a
Agbar, which is over 90 percent controlled by holding
company Criteria CRIT.MC and French utility Suez LYOE.PA,
gained more than half its 2.86 billion euros ($4.18 billion) in
2007 sales from water management contracts.
Commenting on Criteria and Suez, Vila said the firms planned
to cut their stake in the company to 70 percent and would unveil
details of the sale before August of this year.
(Reporting by Clara Vilar, editing by Will Waterman)