Salini Impregilo Group has been active in Venezuela through its permanent organisation, which directly or in association with international partners, carries out railway and hydroelectric projects with a solid base constructed in the country over more than 30 years.
In recent years, relationships with customers, which are all government agencies, have been characterised by delays in payments. This issue became more acute in 2015 due to the rapid fall in oil prices, which is Venezuela’s main source of hard currency, and social tensions that have intensified as a result of the lack of basic foodstuffs and medicines.
The following table shows the amounts involved in the main contracts in place at the reporting date:
(Share in millions of Euros)
|Residual backlog||Percentage of completion|
|Puerto Cabello - Contuy Ferrocarriles stations||434.8||17.3%|
|Porto Cabello Sistema Integral||313.4||-|
|San Juan de Los Morros railway||278.2||48.0%|
|Puerto Cabello - Contuy Ferrocarriles||201.4||85.2%|
The project on which most progress has been made is the P. Cabello project, while the two sites in Guarico (Chaguaramas and San Juan de Los Moros railways) will continue the maintenance phase until work is rescheduled with the customer.
With respect to especially the P. Cabello - La Encrucijada project, the last considerations collected were in January 2015 for hard currency, whereas local currency collections took place in line with the contractual schedule. Moreover, approximately 70% of the progress billings in local currency was collected in 2015, demonstrating the customer’s interest in continuing the works. The Group’s share of the project is roughly 33%.
Outlook for 2016
The projects that are being developed by Salini Impregilo Group are priority infrastructures of the utmost importance, both in economic-industrial and social terms. Accordingly, and based on the constant and careful monitoring of the country’s situation, no specific issues are apparent at this stage with regard to the recoverability of the Group’s net assets.
However, in view of the delicate and complex uncertain situation that has developed at political level, the possibility that events not foreseeable at the date of this report may arise in the future that may require changes to the assessments made to date cannot be excluded (more information is available in the paragraph on country risk in the section on the “Main risk factors and uncertainties”).