The Construction division of Ferrovial It has 75 lawsuits open. Most of them correspond to possible defects in the construction of the works carried out and to civil liability claims. The total amount provisioned for these risks by the company chaired by Rafael del Pino was 104 million euros at the end of 2020. This amount is lower than the previous year, when it reached 112 million euros.
Of all the litigation, the one referring to the construction of the SH-130 highway in Texas (United States) stands out. In it 115 million euros are played. An arbitration whose hearing began on March 9, 2020 but that, due to the pandemic, it was suspended on March 20.
Subsequently, the hearing was resumed by telematic means on August 13. The International Chamber of Commerce (ICC), which is the institution responsible for the arbitration procedure, informed Ferrovial that the date of issuance of the final award would be in mid-March 2021. It would be notified to the parties in April. However, it has not yet done so.
Millionaire requirement
It was the concession company of the SH-130 highway (SH130 Concession Company) that presented a request to submit to arbitration a dispute against the highway construction company: Central Texas Highway Contractors. The latter made up of Zachry Industrial and Ferrovial Agroman (now Ferrovial Construcción).
The reason that triggered the arbitration was, according to the concession company, that there were vices and defects in the construction, especially in the pavement package of the highway. According to Ferrovial in its Annual Report 2020, it does so “in a generic and succinct way”.
SH-130 Concession Company valued these vices and defects at 130 million dollars (about 106 million euros), of which half (53 million euros) would be attributable to the participation of Ferrovial, without there being joint and several liability regarding the participation of another partner.
It was in March 2019 when SH Concession Company filed an additional claim for another 161 million dollars (about 131 million euros). In total, 291 million dollars (239 million euros) that, according to this company, has used, or will use, to repair the damages claimed. Of that amount, 145 million dollars (119 million euros) would be attributed to Ferrovial. Subsequently, and after the presentation of the defense brief by Ferrovial, the amount was lowered to 280 million dollars (230 million euros). Half (115 million euros) would correspond to the Spanish company.
Reduced liability
Both Ferrovial and Zachry Industrial consider that the highway construction works were carried out in accordance with the provisions of the contract and the good practices of the industry. And they trust that, in the event that the litigation turns out to be contrary to their interests, liability is limited by a series of facts.
Among those facts, that there is an insurance policy in favor of the construction companies; that the responsibility for defects should lie with the subcontractors; and that the Texas Department of Transportation, and the concession company, appear to have reached an agreement to carry out the repair work. Works whose amount has been established at 60 million dollars (about 50 million euros). Therefore, it would be an amount less than the demanded.
Ferrovial, for these reasons, does not consider additional risks to those it took into account in 2019, when it provisioned 25 million dollars (just over 20 million euros). Ferrovial has recently been awarded a section of I-37 in Texas for € 69 million.
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