|TABLE OF DEFINED TERMS IN THE AWARD|
|"AA Consortium"||Aguas del Aconquija (later to become Compañía de Aguas del Aconquija S.A.) (also referred to as "Consortium")|
|"Argentina"||Argentine Republic (also referred to as the "Argentine Republic")|
|"Argentine Republic"||Argentine Republic (also referred to as "Argentina")|
|"Award"||Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/97/3, Final Award of 20 August 2007|
|"BIT"||Agreement between the Argentine Republic and the Republic of France for the Promotion and Reciprocal Protection of Investments (also referred to as the "Treaty")|
|"CAA"||Compañía de Aguas del Aconquija S.A.|
|"CETI"||Centro de Estudio de Transporte e Infrastructura S.A.|
|"CGE"||Compagnie Générale des Eaux (now Vivendi Universal S.A.)|
|"Claimants"||Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A.|
|"Consortium"||Aguas del Aconquija (later to become Compañía de Aguas del Aconquija S.A.) (also referred to as "AA Consortium")|
|"Decision on Annulment"||Decision on Annulment of the ad hoc Committee, constituted on 3 July 2002, comprised of Mr. Yves Fortier, President, Professor James Crawford and Professor José Carlos Fernández Rozas, in Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A.|
|"Defender of the People"||(formerly Compagnie Générale des Eaux) v. Argentine Republic, ICSID Case No. ARB/97/3. Head of the office created 15 August 1995, by Tucumán Law No.|
|"Defender of the Public"||6644, for the protection and defence of the legal rights and interests of persons and community, as contained in the National and Provincial Constitutions and in the laws passed as a consequence thereof before the acts, events and omissions of the Provincial Public Administration, with the provisional scope of this law (also known as "Defender of the Public", or the "Ombudsman") Head of the office created 15 August 1995, by Tucumán Law No.|
|"DiPOS"||6644, for the protection and defence of the legal rights and interests of persons and community, as contained in the National and Provincial Constitutions and in the laws passed as a consequence thereof before the acts, events and omissions of the Provincial Public Administration, with the provisional scope of this law (also known as "Defender of the People", or the "Ombudsman") Dirección Provincial de Obras Sanitarias|
|"DYCASA"||Dragados y Construcciones Argentina S.A.|
|"ERSACT"||Tucumán Provincial water regulator created by Tucumán Provincial Law No. 6529, 18 January 1994 (formerly "ERAT") (also referred to as the "Regulator")|
|"Executive Orders"||Resolutions or regulations issued pursuant to the Provincial|
|"Executive"||Constitution of the Province of Tucumán by the Governor of the Province of Tucumán on matters referred to in laws enacted by the Tucumán Provincial Legislature The executive branch of the Tucumán provincial government,|
|"First Award"||composed of the Governor and the Lieutenant or Vice Governor and Ministers appointed by the Governor Compañía de Aguas del Aconquija S.A. and Compagnie Générale|
|"First Tribunal"||des Eaux v. Argentine Republic, ICSID Case No. ARB/97/3, Award of 21 November 2000 (also referred to as the "Original Award") A duly appointed Tribunal, comprised of Judge Francisco Rezek,|
|"ICSID Convention"||President, Judge Thomas Buergenthal and Mr. Peter Trooboff, constituted in Compañía de Aguas del Aconquija S.A. and Compagnie Générale des Eaux v. Argentine Republic, ICSID Case No. ARB/97/3, pursuant to a Request for Arbitration filed by Compañía de Aguas del Aconquija S.A. and Compagnie Générale on 26 December 1996 (also referred to as the "Original Tribunal") Convention on the Settlement of Investment Disputes between|
|"ILC Articles"||States and other Nationals of Other States The International Law Commission’s Articles on State|
|"Legislature"||Responsibility (2002) Tucumán provincial legislature|
|"Ombudsman"||Head of the office created 15 August 1995, by Tucumán Law No. 6644, for the protection and defence of the legal rights and interests of persons and community, as contained in the National and Provincial Constitutions and in the laws passed as a consequence thereof before the acts, events and omissions of the Provincial Public Administration, with the provisional scope of this law (also known as "Defender of the Public", or the "Defender of the People")|
|"Original Award"||Compañía de Aguas del Aconquija S.A. and Compagnie Générale des Eaux v. Argentine Republic Award of 21 November 2000 (also referred to as the "First Award")|
|"Original Tribunal"||A duly appointed Tribunal, comprised of Judge Francisco Rezek, President, Judge Thomas Buergenthal and Mr. Peter Trooboff, constituted in Compañía de Aguas del Aconquija S.A. and Compagnie Générale des Eaux v. Argentine Republic, ICSID Case No. ARB/97/3, pursuant to a Request for Arbitration filed by Compañía de Aguas del Aconquija S.A. and Compagnie Générale on 26 December 1996 (also referred to as the "First Tribunal")|
|"Province"||Province of Tucumán, Argentine Republic (also referred to as "Tucumán")|
|"Rais Report"||Case Study, Concession for the Potable Water and Sewerage Services in Tucumán, by Jorge Carlos Rais, Maria Esther Esquivel, Sergio Sour, Consultants, April 2001.|
|"Regulator"||Tucumán Provincial water regulator created by Tucumán Provincial Law No. 6529, 18 January 1994 (formerly "ERAT") (also referred to as "ERSACT")|
|"Roggio"||Benito Roggio e Hijos S.A.|
|"San Miguel"||San Miguel de Tucumán, the provincial capital of the Province of Tucumán|
|"Second Request"||Claimants’ Request for Arbitration dated 29 August 2003|
|"Treaty"||Agreement between the Argentine Republic and the Republic of France for the Promotion and Reciprocal Protection of Investments (also referred to as the "BIT")|
|"Tucumán"||Province of Tucumán, Argentine Republic (also referred to as the "Province")|
|"Vienna Convention"||1969 Vienna Convention on the law of Treaties|
|"Vivendi"||Vivendi Universal S.A. (formerly Compagnie Générale des Eaux)|
"For purposes of interpretation and application of this Contract, the parties submit themselves to the exclusive jurisdiction of the Contentious Administrative Tribunals of Tucumán. "10
"In conclusion, the Tribunal finds that the record of these proceedings does not provide a basis for holding that the Argentine Republic failed to respond to the situation in Tucumán and the requests of the Claimants in accordance with the obligations of the Argentine Government under the BIT"11
"...the nature of the facts supporting most of the claims presented in this case make it impossible for the Tribunal to distinguish or separate violations of the BIT from breaches of the Concession Contract without first interpreting and applying the detailed provisions of that agreement... Accordingly, and because the claims in this case arise almost exclusively from alleged acts of the Province of Tucumán that relate directly to its performance under the Concession Contract, the Tribunal holds that the Claimants had a duty to pursue their rights with respect to such claims against Tucumán in the contentious administrative courts of Tucumán as required by Article 16.4 of their Concession Contract".12
"...where the "fundamental basis of the claim " is a treaty laying down an independent standard by which the conduct of the parties is to be judged, the existence of an exclusive jurisdiction clause in a contract between the claimant and the respondent state or one of its subdivisions cannot operate as a bar to the application of the treaty standard. At most, it might be relevant - as municipal law will often be relevant - in assessing whether there has been a breach of the treaty. "13
"In the Committee’s view, it is not open to an ICSID tribunal having jurisdiction under a BIT in respect of a claim based upon a substantive provision of that BIT, to dismiss the claim on the ground that it could or should have been dealt with by a national court. "14
"A state cannot rely on an exclusive jurisdiction clause in a contract to avoid the characterisation of its conduct as internationally unlawful under a treaty. "15
"...it is one thing to exercise contractual jurisdiction (arguably exclusively vested in the administrative tribunals of Tucumán by virtue of the Concession Contract) and another to take into account the terms of a contract in determining whether there has been a breach of a distinct standard of international law, such as that reflected in Article 3 of the BIT. "16
"...whether particular conduct involves a breach of a treaty is not determined by asking whether the conduct purportedly involves an exercise of contractual rights. "17
(i) Memorial of Claimants, 24 November 2004;
(ii) Respondent’s Exception to the Jurisdiction of the Centre and the Jurisdiction of the Tribunal, 7 April 2005;
(iii) Claimants’ Counter-Memorial on Jurisdiction, 31 May 2005;
(iv) Respondent’s Reply on Jurisdiction (entitled Rej oinder Brief About Objections Raised), 21 June 2005;
(v) Claimants’ Rejoinder on Jurisdiction, 12 July 2005;
(vi) Counter-Memorial of Respondent, 29 November 2005;
(vii) Reply of Claimants, 15 February 2006;
(viii) Rejoinder Memorial of Respondent, 19 May 2006.
(i) Vivendi had not established itself as the successor-in-interest to CGE. Rather, through a series of complicated corporate changes that occurred after the filing of the first Request but before the filing of the Second Request, Veolia Environment succeeded to CGE’s majority shareholding in CAA and Vivendi currently owns only 5.3% of Veolia Environment’s issued and outstanding shares (on the date of the Second Request it held only 20.4% of such shares);
(ii) being presently only an indirect minority shareholder of CAA, Vivendi’s current claims are derivative and derivative claims are forbidden under both Argentine and international law;
(iii) with respect to CAA’s claims, CAA had not obtained its French nationality for protection pursuant to the terms of Argentina-France BIT and to the extent that it had acquired any protection under the treaty it had done so illegitimately through transfers and transactions in violation of the Concession Agreement;
(iv) CAA and Vivendi had failed to comply with Rule 36(2) of the ICSID Convention and Rule 2(l)(f) of the Institution Rules; and
(v) the ad hoc Committee’s Decision on Annulment precludes consideration of purely contractual claims (ie, for breach of the Concession Agreement). To the extent that the present Tribunal has jurisdiction, it is limited to claims for breach of the BIT which are grounded in allegations of conspiracy or based on facts which constitute a concerted effort by the Tucumán authorities to frustrate the Concession Agreement.
"This case concerns a claim against the Argentine Republic submitted to ICSID by CGE, a French corporation that operates water and sewage systems in France and other countries, and also by CGE’s Argentine affiliate, CAA. "20
"Respondent argued that CAA should not be treated as a French investor because this acquisition occurred after disputes had arisen between CGE and Tucumán (Resp. Mem. at App. B, Note relating to CGE’s Acquisition). CGE responded that the critical date for purposes of determining control under Article 25(2)(b) and under precedent interpreting the ICSID Convention is the date for consent to arbitration and that is the date in late 1996 when CGE submitted the dispute to arbitration. All parties agree that by late 1996 CGE had acquired the Dycasa shares.... For purposes of resolving the issues addressed by this Award, the Tribunal has determined that CGE controlled CAA and that CAA should be considered a French investor from the effective date of the Concession Contract. "
"Moreover it cannot be argued that CGE did not have an "investment" in CAA from the date of the conclusion of the Concession Contract, or that it was not an "investor " in respect of its own shareholding, whether or not it had overall control of CAA. Whatever the extent of its investment may have been, it was entitled to invoke the BIT in respect of conduct alleged to constitute a breach of Articles 3 or 5. It is also clear that CGE controlled CAA at the time the proceedings were commenced, so that there was no question that the Tribunal lacked jurisdiction over CAA as one of the Claimants in the arbitration. In the circumstances, and for the purposes of the present proceedings, the Committee does not need to reach any conclusion on the precise extent of CAA’s and CGE’s treaty rights at different times. "21
"The evidence before this Tribunal demonstrates that, in May 1998, CGE changed its name to Vivendi S.A., which then merged with several other companies to form the company Vivendi Universal. Vivendi Universal continues to this date to hold the majority stake in CAA that was acquired at the time by CGE. "23
"In these circumstances, the Tribunal has no difficulty whatever in concluding that the parties to the resubmitted case are the same as the parties below. "24
Mr. Daniel Benquis Mr. Christian Lefaix
Mr. Charles-Louis de Maud’huy Mr. José Alvaro Padilla
Mr. José Manuel García González Ms. Dominique Perrier
Dr. Herman J. Gibb Mr. J. Alan Roberson
Mr. Gérald Guérin Mr. François de Rochambeau
Mr. Régis Hahn Mr. Walter Velarde
Mr. Daniel Esteban Arancibia Mr. Angel Maria Garcia Pinto
Mr. Próspero Barrionuevo Mr. Raúl Gil Romero
Ms. Silvia Estela Courel Mr. Emilio Lentini
Mr. Franco Davolio Mr. Raúl Roque Topa
Mr. Fortunato Carlos Duguech Mr. Daniel Arturo Vaca
Daniel Benquis Régis Hahn
Alberto B. Bianchi Herve Jauffret
Carmen Broudeur Christian Lefaix
Juan Walter Velarde Carrion Alvaro José Padilla
Charles-Louis de Maud’huy Daniel José Paz
François de Rochambeau Dominique Perrier
Herman J. Gibb J. Alan Roberson
Gérald Guérin Christoph Schrueur
José Manuel García González José W. Vanetta
Daniel Esteban Arancibia Ismael Mata (replaces report of Francisco Sassi Colombres)
Jorge A. García Mena
Maria Silvina Bosio
Alejo J. Molinari
Maria Gilda Pedicone de Vails
Jorge Carlos Rais
Francisco Sassi Colombres (report
replaced by that of Ismael Mata) Raúl Gil Romero
Sylvia Estela Courel Carlos F. Rosenkrantz
Franco Davolio Raúl Roque Topa
Fortunato Carlos Duguech Héctor Osvaldo Turk
Angel Maria Manuel Garcia Pinto Daniel Arturo Vaca
Juan Carlos Jiménez Daniel Enrique Yáñez
Michael C. Kavanaugh
Emilio Juan Lentini
(i) on 23 August 2006, after the conclusion of the hearing on the merits, Claimants sought to file additional evidence not in the record to support alternative approaches to the calculation of damages. By letter dated 1 September 2006, Claimants explained that although "[t]o be sure, there are facts on the existing record that the Tribunal can use for that purpose", Claimants wished the Tribunal to exercise its discretion to accept further evidence offered by Claimants to give the Tribunal the "full picture" relevant to alternative calculation methods. In its letter dated 31 August 2006, Respondent objected to Claimants’ attempt to introduce such evidence. In Respondent’s view, even if the Tribunal sought further discussion from the parties as to the effects of the various methods of calculation on Claimants’ damages claim, the record was clear that no new evidence was to be introduced. The Tribunal communicated its decision to the parties by letter dated 15 September 2006, attached hereto as Schedule A. The Tribunal advised that it declined to exercise its discretion to accept Claimants’ new evidence;
(ii) on 25 August 2006 each of the disputing parties submitted a post-hearing submission;
(iii) on Days 10 and 11 of the hearing on the merits, to assist the parties in developing their closing arguments and post-closing submissions, the Tribunal noted various topics with respect to which the Tribunal thought it would be helpful if the parties provided summaries of the evidence. On 12 September 2006, Respondent submitted to the Tribunal various compilations and descriptions with respect to various of the governmental agencies that were relevant to the proceedings. On 13 September 2006, Claimants objected to Respondent’s submission on the basis that the submission was untimely. After carefully considering the positions of the parties, as expressed by Claimants in its letters of 13 September 2006 and 19 September 2006, the Tribunal has concluded that it will accept the summaries and compilations of existing evidence provided by Respondent. Although it might have been contemplated that the parties would submit all compilations and descriptions with their post-hearing briefs, this was not explicitly required by the Tribunal. The Tribunal notes that Claimants do not suggest that any of the materials provided by Respondent include evidence not already part of the record. In any event, the Tribunal has concluded that there is no actual prejudice to Claimants in permitting Respondent to present this material to the Tribunal;
(iv) on 29 September 2006 each of the parties made their respective initial submissions on costs;
(v) on 6 October 2006, each of the parties made submission commenting on the costs of the other party.
(i) a violation of the fair and equitable treatment standard, as expressed in Articles 3 and 5 (1) and (3) of the BIT,28 and
(ii) an expropriation of Claimants’ investment in its entirety, contrary to Article 5(2) of the BIT29.
(i) the causes and foreseeability of episodes of turbidity which appeared in the water in San Miguel de Tucumán in late 1995 and January 1996;
(ii) which of the disputing parties initiated (and what motivated) the parties’ attempts to re-negotiate the Concession Agreement, which commenced in early 1996, shortly after the manganese turbidity phenomenon;
(iii) whether the provincial water regulator, ERSACT, took regulatory action against CAA because of the latter’s failure to meet its contractual obligations and in order to ensure adequate supplies of clean and potable water, or as part of a campaign to harass CAA until it agreed to renegotiate the terms of the Concession Agreement; and
(iv) whether CAA had previously agreed to changes that were made to the 6 June 1997 legislative bill (which set out the terms of the proposed, renegotiated Concession Agreement) when the bill was amended in the course of being enacted as law No. 6826 on 13 June 1997.
"Despite progressive improvements in its commercial management, the DiPOS currently has not achieved a collection rate higher than 55%. In any event, the collection rate provided by the Bidder for billings on services is felt to be insufficient, given that it sets a figure of 85% at the start of the concession term, which gradually increases to 90% by the 15th year... Our own projections start from a collection index of 85% and attain 90% by the third year, and 95% after the eight year and through the end of the concession. These returns are considered to be reasonable taking into account the results achieved by the DiPOS and the improvements that can be achieved by effective private management as demonstrated in international experiences ".60
1.6 APPLICABLE LA W
’’The rules applicable to this Agreement according to Section 1.5 of the Bid Terms and Conditions, shall be Law 6529 as amended by Law 6537, Law No. 6445, Law No. 5995, Law No. 6071, Executive Order Agreement 7/1, Executive Order N° 288/93, and, where applicable, Law No. 5241.
In the event of any doubt or gap, the following documents shall be relied upon in the order indicated:
1.6.1. This Concession Agreement and the Executive Order granting approval thereof.
1.6.2. The awardee’s Bid and any improvement thereof as qualified by Memoranda 7 and 16 of the Pre-Award Commission.
1.6.3. The Bid Terms and Conditions for Di.P.O.S. Privatisation, approved by Executive Order 1053/3/94 and explanatory circulars thereof.
1.6.4. The Prequalification Terms and Conditions and explanatory circulars thereof.
This Concession Agreement shall be interpreted within the framework of the obligations described in the Bid Terms and Conditions and explanatory circulars thereof and in the hereinabove mentioned legislation. In the event of any discrepancies or contradictions between this documentation and the Concession Agreement, which do not allow for any interpretation maintaining in effect all of the sections in question, the provisions of this Agreement shall prevail. "
"12.1. APPLICABLE TARIFF SYSTEM
...the Concession Tariff System shall be the following: The methods for calculating tariffs shall be the one currently used by Di.P.O.S. based on the provisions set forth in Executive Orders 9022/63 and 1333/74 issued by the Federal Executive Power and Provincial Executive Orders 2611/82 and 1277/85. The rules and elements necessary to do the above-mentioned calculation are included in ANNEX XX. During the first year of the Concession, the tariffs pertaining to each category and class of Users arise from applying the offered adjustment coefficient (K=1,679) to the tariff framework in force. The resulting values are included in ANNEX XXI. During the second year of the Concession, the tariffs pertaining to each category and class of Users arise from applying a multiplying coefficient equal to ONE AND TEN HUNDREDTHS (1.10) to the tariff framework in force during the first year (the values of which are included in ANNEX XXI). The resulting values are included in ANNEX XXII During the third and subsequent years of the Concession, the tariffs to be applied to each category and class of Users arise from applying a multiplying coefficient equal to ONE AND TEN HUNDREDTHS (1.10) to the tariff framework in force during the second year (the values of which are included in ANNEX XXII). The resulting values are included in ANNEX XXIII "
"9.2 INCLUSION IN TARIFF Taxes, duties and/or local contributions shall not be considered Concession costs. The same will apply to stamp taxes to be paid on the Concession Agreement. Any modification to a higher or lower figure, the introduction of new taxes and the abolition of existing taxes that may arise as from the date of presentation of the Bid, shall allow the renegotiation of tariffs and prices so as to properly reflect such modifications in costs. "
(i) advise the Governor and his ministers on any legal matter, for which purpose the provincial Attorney General may request from the Province’s various administration offices such reports, records and files as may be necessary;
(ii) undertake such studies as may be necessary for the purpose of updating laws and regulations;
(iii) intervene in legislative acts and duties of the Executive; and
(iv) intervene in administrative matters in which the interpretation of the rules in force is at issue.
(i) enforcement of the provisions of Laws No. 6445 and Law No. 6529;
(ii) oversight of the concession and the services provided by the concessionaire to users;
(iii) monitoring of the concession holder’s compliance with its investment obligations, expansion plans, and its timely and proper compliance with the price and rate schedules;
(iv) addressing users’ complaints regarding deficient service or over-billing; and
(v) taking any necessary steps to meet these objectives, subject to the prevailing law and the applicable provisions of the Concession Agreement.93
Articles 1 and 2 of the law explain the purpose and the scope of the office:
"Art. 1 - Create the Office of the Defender of the People for the protection and defence of the legal rights and interests of persons and community, as contained in the National and Provincial Constitutions and in the laws passed as a consequence thereof before the acts, events and omissions of the Provincial Public Administration, with the provisional scope of this law, the head of which shall be an official called "Defender of the People ".
"Art. 2 - JURISDICTION - For the purposes of this law, the concept of provincial public administration, includes the centralised and decentralised administration; self-governed entities; State enterprises; State companies; State-partially-owned Companies; State-majority-owned Companies; and any other agency of the Provincial State whatever is its legal nature, name, special regulatory law, or place where its service is provided. This Office of the Defender of the People shall have jurisdiction over public non-state legal entities that exercise public powers, as well as over private suppliers of public utilities. In this case, and without prejudice to the remaining powers granted by this law, the Defender of the People may demand the competent administrative authorities in pursuance of the powers granted by law. The Office of the Defender of the People shall not have jurisdiction over the Judicial Power and the Legislative Power. "95 (emphasis added)
"[Regarding the state of the facilities at the time of their transfer,] CAA... agrees with what was expressed by DiPOS, since it has also noticed a significant deterioration in the organization and in the state of the equipment, plant, etc., making it very onerous and difficult to place it in a normal working order."102
CAA’s Initial System Improvement112
|1995 Last Five Months|
|Water network repairs||5,018|
|Change and renewed values||188|
|New interconnections (m)||5,070|
|Purging and removing encrustations from pipes (m)||18,150|
|New and renewed connections (m)||118|
|Removing electrical panels||51|
|Change of well pumps||42|
|Repairs of sewer leaks||405|
|Repairs of manhole covers||166|
|Clearing sewer network obstructions||2,596|
|Renovating sewage pumping stations||2|
|Cleaning sewage pipes (m)||295,800|
|Water analysis (number of tests)||3,044|
|Water analysis (parameters of tests)||15,220|
"Not from a legal point of view, but with everything that was going on, evidently it was out of line in terms of equations, possibility of providing the service, and particularly the possibility of a community to pay. However much, legally it might have been perfectly well adjusted."118
"We have not detected any error in the first invoice that CAA has sent to its customers: the invoicing coincides with what is set forth in the Concession Agreement and Annex XIII which the executive power signed for the concession of the sanitation service "120
the Legislature passed a resolution that same day ordering ERSACT to provide information on the tariff increase and inviting members of the public to provide input on tariff rates. The resolution also instructed the Court of Accounts to investigate the legality of each item that appeared on CAA’s invoices. And this occurred before the new government took office on 30 October 1995.121
"Dr. Paz then told Mr. Davolio: "Don ’tyou think we ’re getting buried in paper from all these cases being fded lately? Take the case of the 78 fines: don ’tyou think a single case could have been filed, instead of 78? " Mr. Davolio replied, "[t]hat ’s how I see it. If it were up to me, I would resolve most of these matters with a telephone call. As far as the 78 fines, I agree, but my superiors are asking me to put pressure on Aguas del Aconquija to renegotiate the rates. "
"Dr. Paz then told Mr. Davolio, "Lately our engineers are spending more time on inspections in response to resolutions than on technical work. Do you think a relationship can be kept up under those conditions for 30 years? ".
"Mr. Davolio replied; " Look, this whole problem came about because of the high rates and, what is worse, you had the misfortune that the manganese thing happened, which it never had before in Tucumán. So until the rates are renegotiated like the government wants, the order from higher up is to keep applying pressure with whatever we’ve got"
Mr. Davolio then said "you have no idea how much I want to get out of here. I am sure that right now someone is on the phone saying, "What is Davolio doing meeting with CCA ’s [sic] people for over half an hour? But I don’t care. You two leave and I will deny everything ".141 (emphasis added)
"A. The regulatory body, its function was to oversee compliance with the contract in every respect, and when there was what is called a breach or non-performance, then a resolution was issued when that non-performance was well-founded and duly proven. That is what you call resolution against CAA.
Q. Thank you for that clarification. When such a resolution was issued, was the ultimate decision whether or not such a resolution should be issued a decision of Minister Fogliata?
A. Exactly. Until the day that I took over as Interventor, but despite that, even after that, I always consulted with him "... "Well, while he was the Interventor, its not that he would issue it. It would be drawn up by ERSACT. It would be taken to Minister Fogliata for him to it define or decide whether it was appropriate because he would have a political view or policy view beyond the resolution and in light of how the relationship with the company stood"152
(i) "Ingresos Brutos" ("IB"), a provincial tax on CAA’s gross income equal to 2.5% of the service tariff;
(ii) PACIS, a municipal tax equal to 1.2% of the service tariff;
(iii) Contribución de Ocupación de Suelos ("OS"), a municipal tax that varied between the municipalities but was equal to 6.0% of the service tariff in San Miguel Tucumán;
(iv) a municipal retention levy ("RM"), collected on behalf of the municipalities, and equal to 2.0% of the service tariff;
(v) a federal value-added tax ("IVA"), being 21% of the sum of the service tariff and the IB, PACIS and OS taxes; and
(vi) "ENTE, a charge paid to ERSACT, being 6% of the sum of the service tariff and the IB, PACIS, OS, RM and IVA taxes and levies.
"2. The billings by "AGUAS DEL ACONQUIJA S.A. " include a 67.9% increase over the rate schedule amounts for the last billing by DiPOS, plus the cost to the Concessionaire of provincial taxes and municipal taxes (on the rate for service net of VAT) and the 6% contribution to the Regulatory Agency ".154
Carlos Barrionuevo, ERSACT’s then head, told his board on 20 September 1995, that "the Concession Agreement contains absurd provisions" and asked the board to "issue an administrative act ordering a halt to the attempt to collect all these charges".155 The board minutes record a discussion about the scope of the Regulator’s power to interpret the contractual provisions, but a complete copy of the minutes not having been produced, it is not possible to say what then transpired.
"Journalist - is the agreement going to be rescinded? Is the Executive Branch continuing to pursue this issue?
Mr. Bussi - that is the intention. Unless there is a miracle, and I do believe in miracles, but...
Journalist - do you believe that such a miracle is close?
Mr. Bussi - No, no. I have said this before and I will say it again: I don’t see any possibility of a miracle any time soon"159
"the company... has not given much thought to the consequences of trying to convert its breach of contract into a political issue..."
’’the concessionaire company has been systematically ignoring and evading performance of the agreement. "
"neither... the Ambassadors of France and Spain have had to suffer what the 700,000 Tucumán residents had to suffer for a good part of the month of January, during which substance which was anything but water was distributed through the pipes. That substance was neither potable nor usable ".
"the possible application to Aguas del Aconquija of the maximum sanction set forth in the Concession Agreement - Rescission - is not a capricious action by Governor Bussi. It is the response to a unanimous request by the entire social, political, guild and business spectrum of the province, duly represented by the Honourable Legislature, which has been supporting without hesitation the actions undertaken by the Executive Branch. "
"I will not hesitate to personally move forward with the administrative measures, as well as to also drive the legislative and legal actions that may be necessary to resolve the problem affecting the people of Tucumán",161
"the Province has put things in their place... the French have had to take one step back in their excessive ambitions which aimed at getting the people, and above all the poorest people, to have a really hard time as a result of the subjugation of the previous government resulting from the privatization.190