The Minister of Public Works, Housing and Mobility for the Canary Islands Government, Pablo Rodríguez, alongside the general director of Road Infrastructure, Rosana Melián, announced on Wednesday that the Executive has finalised an agreement with UTE OHL, amounting to 13,777,496.74 euros, to comply with the ruling from the Superior Court of Justice of the Canary Islands. This ruling invalidates the award made by the previous government on the construction works for the Island Ring between El Tanque and Santiago del Teide, located in Tenerife.
The minister explained that “the recent ruling from the TSJC has confirmed the viability of the proposal submitted by OHL, which was initially awarded, compelling the Ministry to adhere to the High Court’s decision, thereby making choices that prioritise the public good and ensure responsible, transparent, and efficient use of public funds.”
Undoubtedly, he conveyed to reporters, “it is in the public interest and the legitimate rights of the involved parties to reach a compensation agreement in favour of UTE-OHL, as recompense for the damages incurred, in exchange for relinquishing the award and the commitment of UTE-FCC to continue the works without interruption.”
Furthermore, the minister specified that upon receiving the final ruling, the Ministry set objectives to ensure that the works would not be halted due to their significance for connectivity and mobility on Tenerife, and that progress would continue without delays.
Rodríguez emphasised the importance of safeguarding the public interest and minimising the additional costs arising from the High Court’s decision on behalf of the Government of the Canary Islands.
Rosana Melián, for her part, detailed that the agreement, which has already been submitted to the Contentious-Administrative Chamber of the TSJC, includes the withdrawal of UTE OHL from the award of the contract and the execution of the work.
“In this manner, we ensure that the works are not halted, as doing so would harm the public interest, and the continuation of this effort will be managed by UTE-FCC, which has formally expressed its eagerness to proceed with the execution,” she remarked.
Additionally, Melián elaborated on the implications of executing the ruling “to its full effect,” which would necessitate a change of contractor.
“First and foremost, we would have needed to terminate the contract with UTE FCC, which has been undertaking the project for five years, resulting in the cessation of work. From that point, we would have needed to award the project to UTE OHL, which the court specified should have been the successful bidder,” she indicated.
In line with this, the general director pointed out that this course of action “would not have been straightforward, as the actual situation created by the works already completed by UTE FCC, in accordance with its project, would differ from the original proposal submitted by UTE OHL.”
Melián clarified that following the outlined process “would incur a considerably higher financial cost” than that agreed upon through this arrangement.
“We estimate that this entire process would have taken at least three years, resulting in significant economic, environmental, and social implications given the importance of this project,” she emphasised.
The agreement takes into account various factors, including the loss of profit that would have been accrued had the contract been awarded, specifically the industrial profit calculated based on the work plan included in UTE OHL’s proposal, along with default interest.
Moreover, the expenses incurred by the consortium as a result of the bidding process and the specific resource regarding the contracting have also been considered and duly substantiated.
CHRONOLOGY OF THE SITUATION
Pablo Rodríguez recalled that the project was awarded in June 2019 to UTE OHL when he was still serving as Minister of Public Works, with a budget of 213.4 million euros, excluding IGIC, after the Ministry’s technicians determined there were no irregularities in their offer.
However, UTE FCC later filed an appeal, claiming that OHL’s proposal did not adhere to labour and social regulations.
The Administrative Contract Court then ordered the exclusion of OHL, leading the Ministry to award the project to a different UTE in October 2023, with the former minister from the previous administration in charge.
In March this year, the ruling from the First Section of the Administrative Litigation Chamber of Santa Cruz de Tenerife, dated March 14, 2024, was communicated, annulling the Resolution of the Administrative Court of Public Contracts in the Autonomous Community of the Canary Islands, as well as the Order from the former Minister of Public Works and Transportation, which deemed the proposal by UTE-OHL viable and awarded the project to them.
The project is currently in an advanced stage of implementation, exceeding 60% of the original budget, and is anticipated to be completed by the first quarter of 2027.
