Corporate
The activities included in this category, which are centrally operated by the Salini Impregilo S.p.A., the Group’s Parent Company, include the following:
- coordination, control and strategic planning of the Group’s activities;
- centralized planning and management of human and financial resources;
- compliance with administrative, tax, legal/corporate and corporate communication requirements;
- administrative, tax and managerial support for Group companies.
Risk areas
Tax litigation
The dispute with the Revenue Agency concerning the notice of assessment challenging the tax treatment of impairment losses and losses on investments recognized by the Company in 2013 is still pending before the Court of Cassation due to the appeal filed by the opposing party. More specifically, the main assessment, which regarded the sale by Impregilo S.p.A. to Impregilo International NV of the investment held in the Chilean company Costanera Norte SA was dismissed by the Milan Regional Tax Commission.
Two additional disputes related to 2005 are pending at the first jurisdictional level. These disputes concern mainly (i) the costs incurred by a participatory association established in Venezuela and (ii) the technical device used for the so-called realignment of equity investments referred to in Article 128 of Presidential Decree No. 917/86. An additional assessment for the year 2006, concerning (a) the costs incurred by a participatory association established in Venezuela, (b) a loss realized on an equity investment and (c) costs for services mot attributable to the year, was reduced to about 20% of the original assessment by the Milan Provincial tax commission. The proceedings at the next jurisdictional level are still pending. The Company, comforted by the option of its tax counsel, believes that its actions were proper and, consequently, treated the associated risk as improbable, but not impossible.
Other litigation
The Corporate functions are not currently involved in any major litigation. Except for that disclosed in greater detail later in this report with regard to the USW Campania Projects, the only other litigation arose in 2009 with the lessor of the building where the old head office was located, in connection with the relocation of the Parent Company’s head office from Sesto San Giovanni (Milan) to Milan. The dispute was decided in December 2012 by an arbitration award that upheld the lessor’s claims, ordering the Parent Company to pay rent for the entire duration of the lease expiring in July 2012. This award was promptly challenged before the relevant Milan Court of Appeals, before which the proceeding are currently pending. However, in 2012, before the expiration of the appeal deadline, the Parent Company had already recognized the impact of the arbitration award on its statement of financial position. Moreover, while the appellate proceedings were pending, the Parent Company was forced to pay the amount awarded to the lessor, reserving the right to a refund.
With regard to this dispute, please note that by virtue of the provisions of the contract executed with Immobiliare Lombarda S.p.A., in its capacity as the original lessor of the premises where the head office is currently located, Impregilo S.p.A. holds the right to be held harmless from claims made by the previous lessor in excess of 8 million euros, which it exercised by means of a payment injunction. The payment injunction was issued by the Court of Milan and challenged by Immobiliare Lombarda. However, while the proceedings are in progress, the opposing party paid the full amount of the claim, as the court refused to stay the enforcement of the payment injunction.
Concessions
The Group manages several control, significant and minority interests in companies that hold concessions, mainly to operate highway networks, facilities for the production of energy from renewable sources and the transmission of electric power, systems for the integrated water cycle and non-medical hospital services.
Impregilo International Infrastructures N.V., a company under Dutch law wholly owned by Salini Impregilo S.p.A., performs a coordination and strategic guidance function in this sector.
The tables that follow show the salient data for the concession portfolio at the end of the reporting year, broken down by type of activity.
HIGHWAYS
| Country | Concession holder | % of investment | total km | stage | start date | end date |
|---|---|---|---|---|---|---|
| Italy | Broni - Mortara | 40 | 50 | Not yet active | ||
| Argentina | Iglys S.A. | 98 | holding company | |||
| Autopistas Del Sol | 19.82 | 120 | Active | 1993 | 2020 | |
| Puentes del Litoral S.A. | 26 | 59.6 | Active | 1998 | 2023 | |
| Mercovia S.A. | 60 | 18 | Active | 1998 | 2023 | |
| Colombia | Yuma Concessionaria S.A.(Ruta del Sol) | 40 | 465 | Active | 2011 | 2036 |
SUBWAY SYSTEMS
| Country | Concession holder | % of investment | total km | stage | start date | end date |
|---|---|---|---|---|---|---|
| Italy | Milan subway Line 4 | 31.05 | 15 | Not yet active |
ENERGY FROM RENEWABLE SOURCES
| Country | Concession holder | % of investment | installed capacity | stage | start date | end date |
|---|---|---|---|---|---|---|
| Argentina | Yacilec S.A. | 18.67 | T line | Active | 1994 | 2088 |
| Enecor S.A. | 30.00 | T line | Active | 1992 | 2088 |
INTEGRATED WATER CYCLE
| Country | Concession holder | % of investment | population served | stage | start date | end date |
|---|---|---|---|---|---|---|
| Argentina | Aguas del G. Buenos Aires S.A. | 42.58 | 210,000 | In liquidation | ||
| Perù | Consorcio Agua Azul S.A. | 25.50 | 740,000 | Active | 2002 | 2027 |
HOSPITALS
| Country | Concession holder | % of investment | No. of beds | stage | start date | end date |
|---|---|---|---|---|---|---|
| Great Britain | Impregilo Wolverhampton Ltd. | 20.00 | 150,000 medical visits | Active | 2002 | 2032 |
| Ochre Solutions Ltd. | 40.00 | 220 | Active | 2005 | 2038 | |
| Impregilo New Cross Ltd. | 100.00 | holding company |
CAR PARKS
| Country | Concession holder | % of investment | Car parking spaces | stage | start date | end date |
|---|---|---|---|---|---|---|
| Great Britain | Impregilo Parking Glasgow Ltd. | 100.00 | 1,400 | Active | 2004 | 2034 |
The portfolio of concession activities held by the Salini Impregilo Group includes two main business areas: a first one, comprised of investments in already active concession holder companies in Argentina, Peru and the United Kingdom, and a second one, consisting of Greenfield projects, which includes contracts for highway infrastructures in Italy and Peru that are still under construction and with regard to which the activities under concession will begin in the future.
There were no significant events or developments affecting the activities of concession holders in the first quarter of 2014, with regular business activities continuing consistent with the objectives defined by the Salini Impregilo Group.
An overview of the main projects in the portfolio of the concession activities, broken down by country, is provided below.
Argentina
In the Argentinean market, the Group’s “Concession” segment activities operate through the Mercovia S.A. subsidiary and some significant and minority interests in other companies.
The Mercovia subsidiary continued to operate its activities reporting a basically breakeven result, while for the Puentes del Litoral S.A. associated company negotiations are currently ongoing to redefine the economic terms of the concession contract.
Italy
In the domestic market, the “Concession” segment’s activities involve three recently acquired major projects for which construction activities are not yet fully operational. These projects are:
- Line 4 – Milan Subway System: This project involves the construction of a new subway line in Milan in the Linate/Lorenteggio branch. Salini Impregilo’s share of the concession is 29%.
- Broni-Mortara highway: This project calls for the design, construction and operation for 43 years of a new 50-kilometer highway connecting Lombardy and Piedmont. Salini Impregilo’s share of the concession is 61.08%.
- Port of Ancona: This project calls for the construction and operation for 30 years of a system of roads linking the Port of Ancona with Highway A14 and State Road 16 Adriatica. Counting the main roads and the access roads, the new roads will cover a length of about 11 kilometers. Salini Impregilo’s share of the project is 47%.