ANNUAL REPORT 2016 Our Mission
We take care of our community by managing everybody‘s water transparently, efficiently and sustainably.
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2016 Annual Report Canal de Isabel II
Our Commitments
To be a benchmark public company and to be the driving force behind 1. the Autonomous Community of Madrid.
2. To work towards managing the full water cycle in Madrid.
To lead the way in addressing the challenges facing the sector and any 3. regulatory advances.
To maintain, innovate and plan our infrastructures and services, adapting 4. to society‘s future needs.
To minimise the environmental impact of all our processes, favouring the 5. efficient use of resources and energy, and pushing towards renewable generation.
To increase the satisfaction of our customers and users, ensuring a level 6. of excellence in the quantity, quality and continuity of the service.
To ensure affordable and socially responsible rates, encouraging savings 7. in consumption.
To strengthen the digital transformation for a more “hands-on” 8. management.
To practise rigorous and transparent financial management, ensuring the 9. appropriate economic balance, financial autonomy and sustainability of the company.
To support our professionals by attracting, retaining and encouraging 10. talent.
3 2016 Annual Report Canal de Isabel II
Canal de Isabel II in 2016
2016
6 January 26 February 8 March
Launch of the free mobile app Canal creates a new website Canal de Isabel II with which customers and (http://www. celebrates International users can manage any issues canalciclointegraldelagua.es/en/) Women‘s Day with an related to water consumption, where multimedia content event at the Central Offices like sending metre readings, about the integral water that is directed at all the revising the status of their water cycle can be viewed. The company‘s employees. bill, or reporting breakdowns or website features 360º views, leaks, among other things, and virtual tours of our most receive tips on how to save water. representative facilities, technical documentation, and lots more.
10 March 22 March 9 and 10 April
The Autonomous Community As part of the World Water Open days: close to 300 citizens of Madrid reinforces Canal‘s Day celebrations, Canal offers visit Canal‘s key infrastructures. workforce and promotes free tickets for the exhibition In addition to the El Atazar equalisation of working “Cleopatra and the Fascination reservoir, which was visited by conditions, consolidating of Egypt”, hosted by the Arte the company‘s president, the the stability of its employees Canal exhibition centre. Control Centre, the La Reguera by authorising the filling of treatment plant in Móstoles and 162 permanent job positions. the Torrelaguna drinking water Canal and the Works Council agree treatment plant were also opened to harmonise working conditions. to the public.
4 2016 Annual Report Canal de Isabel II
4 May 5 May 8 May
The Board of Directors of Canal Organisation of the “Solidarity At the Arte Canal Centre, the de Isabel II appoints Rafael Prieto Coffee” at the Canal Central exhibition “Cleopatra and Martín as the new CEO of the Offices in collaboration with the the Fascination of Egypt” company. In late January, Prieto Spanish Cancer Association. closes its doors after more had taken over the management of Employees donated 895.20 than 200,000 visitors saw the public entity Canal de Isabel II. euros, an amount that was the exhibition and more than matched by the company for a 20,000 children participated total of 1,790.40 euros. in its free workshops.
29 May 1 June 1 June -
More than 6,000 runners take Canal announces that it has 30 September part in the 37th edition of achieved an energy surplus in the “Water Race” organised May, beating its own record. Canal applies the seasonal by the Canal Sport Club, in the Canal was able to produce water tariff for all Madrid 5- or 10-kilometre races through enough electricity to guarantee residents in order to the streets of Madrid.. Part of its needs (28,000 MWh) and encourage the sensible use the registration fee goes to also had a surplus of 2,000 of this resource during the the Spanish Federation of Rare megawatts per hour (MWh) to summer period. Diseases. feed into the grid.
5 2016 Annual Report Canal de Isabel II
Canal de Isabel II in 2016
11 and 12 15 June 18 June 13 July June Closing ceremony of The awards ceremony of By resolution of the Audit The Oxfam Intermón Canal Sport 2016: the Microvideos contest, Committee and the Board of Trailwalker hundreds of workers organised by Canal Educa, Directors, Canal de Isabel competition is held from the company is held. This initiative sought II filed a complaint with with the participation attended the event, to promote sustainability the Public Prosecutor‘s of Canal employees. which began with the and the environment Office regarding possible awarding of prizes among students in the irregularities in the to the winners of all latter years of primary acquisition of the Brazilian categories and ended school, secondary company Emissão by with several draws and school, baccalaureate its subsidiary Soluciones a concert. and vocational training Andinas de Agua. This programmes in the complaint would give rise Community of Madrid. to “Operation Lezo”, which is being investigated by Spanish High Court No. 6.
27 July 22 August 25 August
Canal signs a project with the Fight against fraud: Canal Canal launches a new service Vicente Ferrer Foundation acquires high-resolution that allows citizens to find to install showers and satellite imagery to update information about any toilets in 276 homes in the the inventory of parks, green interruption in the water supply district of Anantapur (India). areas and swimming pools in the the company‘s website. The aim Through Canal Voluntarios, Autonomous Community (about of this initiative is to expand Canal employees will design 2,400 km2) to evaluate the water the company‘s communication and supervise the project. used in each area and detect channels with its customers and More than 500,000 people possible fraud. users. have gained access to drinking water and sanitation thanks to this charitable initiative.
6 2016 Annual Report Canal de Isabel II
4 October 5 October 6 November 15 - 17 November
The new Pelayos de la Organisation of the For the sixth consecutive year, the Canal participates in the iWater Presa Drinking Water “Solidarity Coffee” at United Nations Global Compact integral water cycle fair, held Treatment Plant (DWTP), Canal‘s central offices gives an Advanced grade to in Barcelona, announcing its which connects several in collaboration with Canal de Isabel II‘s Annual innovation projects. Some of municipalities from the the Spanish Red Cross. Corporate Report. This is the the themes presented by the so-called “south-west Employees donated highest rating given by the world‘s company‘s technicians include corner” to the supply 601.93 euros, an amount largest voluntary corporate social extreme rainfall management, system, comes into that was matched by the responsibility initiative. This remote detection of fraud, the service. With this initiative, company for a total of distinction recognises the quality “social tariff”, the use of reclaimed Canal completes the 1,203.86 euros. of the information provided by water, the water-energy binomial, connection of the entire companies in their annual reports. the treatment plant as an urban Autonomous Community mine or the management of to the general supply unregistered water. system.
1 December 2 December 20 December
Canal launches an alert protocol The Works Council and Canal The Autonomous Community in case of lack of water supply Management reach an agreement of Madrid reports that, for the for customers considered to to return to the historic model and second consecutive year, it will be “sensitive”. There are 7,000 provide the company with its own freeze water tariffs and extend the “sensitive” contracts, including collective bargaining agreement. social tariff to non-contributory hospitals and health centres, The text, which is the result of several pension recipients, a measure that nurseries, schools or universities, months of negotiations, addresses will benefit some 39,000 Madrid hotels, mass consumer industries the commitment expressed by residents. The social tariff implies the or nursing homes. Canal alerts President Ángel Garrido and the free consumption of 25 m3 of water the affected customer 48 hours in demands of workers‘ representatives every two months and the reduction advance of a scheduled interruption to provide a framework that regulates of the fixed quota by 50%. In this way, so that its negative impact can be and improves the working conditions families facing financial problems will minimised. of its 2,500 workers. pay just 4 euros a month for 411 litres of water per day.
7 2016 Annual Report Canal de Isabel II
CONTENTS
CANAL DE ISABEL II IN 2016 4
MESSAGE FROM THE CHAIRMAN OF THE BOARD 11
MESSAGE FROM THE CEO 12
OUR COMPANY Main figures in the Autonomous Community of Madrid 2016 16 Our business: the water cycle 18 1 Organisation of our public company 25
OUR CONTEXT The value of water 29 AND FUTURE Context in which our sector operates CHALLENGES Internationally 30 2 Us and our sector in Spain 32 Our main challenges 34
OUR MISSION AND Canal‘s missions, values and commitments 39 COMMITMENTS Our stakeholders 40 3 Communication channels with our stakeholders 42
8 2016 Annual Report Canal de Isabel II
BUSINESS AREAS: Guaranteed supply: water for everybody, every day 46 OUR PERFORMANCE IN 2016 Guaranteeing quality: the best water 54 4 Continuity of service: reliability above all 57 Environmental quality and energy efficiency: we take care of your environment 60 Municipal cooperation: building our region 76 Commitment to users: at your side, for anything you may need 81 Transparency, governance and social commitment: the company of all the people of Madrid 91 Canal‘s professionals: empowering our people 105 Innovation and development: at the cutting edge of our sector 112 Sustainability and efficient management: a profitable company 120
CANAL GROUP Canal Group: activities and geographical implementation 134 Canal Group: population served and capabilities 5 in the integral water cycle 136 Canal Group: companies involved in other activities 140 Group company workforce 142 Consolidated Group financial results in 2016 143
Process of materiality and results: ABOUT THIS REPORT Material features and coverage 150
Detailed statistics on Canal de Isabel II in APPENDIX 1 the Autonomous Community of Madrid (2014-2016). 156 Canal de Isabel II Business Group main financial APPENDIX 2 figures (accrued) (2014-2016). 206 Main financial figures for Canal de Isabel II APPENDIX 3 Group companies in 2016. 230 Auditor‘s report on the contents of Canal de APPENDIX 4 Isabel II‘s 2016 Annual Report. 254
APPENDIX 5 GRI G4 tables of contents. 258
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2016 Annual Report Canal de Isabel II
Message from the Chairman of the Board
This document provides the main management results for 2016. In May of this year we began to redefine the positioning of Canal de Isabel II in order to reinforce its 100% public ownership and boost its efficiency as a European benchmark for quality and technology.
Its 166-year track record in water management has enabled Canal to participate in the development of the society of Madrid and consolidate its position as one of the best companies in the integral water cycle.
Now, in order to respond to the new challenges posed by these times of change, we are establishing a new management model that will redirect its activity to consultancy and engineering and to the geographical area of our Autonomous Community.
In this way, Canal de Isabel II is returning to its origins to recover its essence and strengthen its corporate values of commitment, proximity, transparency and sustainability. Because it is our objective to consolidate the public company‘s own identity and make Canal a model of management, efficiency and transparency that successfully faces this new stage we started with enthusiasm.
I am convinced that, with everyone‘s effort, excellence will continue to be, as it has been in 2016, the hallmark of what is and will be the company of all the people of Madrid, and of which we are so proud.
Ángel Garrido García Councillor of the Presidency, Justice and Spokesperson of the Government of the Autonomous Community of Madrid Chairman of Canal de Isabel II
11 2016 Annual Report Canal de Isabel II
Message from the CEO
As a native madrileño, I am proud to run one of the best companies in the integral water cycle, not only in Spain but worldwide; a company with a unique and successful joint model, built over many decades and improving day by day. With this message, my intention is to present some milestones related to the management of the company throughout 2016.
From a hydrological point of view, 2016 can be described as an average year, with contributions 4.49% below the historical average of the last hundred years. However, the trend of recent years has been maintained - despite population growth, consumption continues to decline. Thus, even though the population served grew by 0.88%, consumption fell by 1.24%. The big effort being made by the people of Madrid when it comes to saving water is very clear if we compare our domestic consumption with that of the rest of Spain, it being 4% below the average.
Investment has reached 187.7 million euros. Work has been carried out on a total of 143 projects, and we have awarded 68 new investments for 55.81 million euros. One of the most noteworthy actions is the Pelayos de la Presa Drinking Water Treatment Plant (DWTP), our 14th plant, which has allowed the municipalities of the so-called “south-west corner” to be integrated into our general supply system.
We are an efficient company, with the most advanced means to plan and develop an adequate investment plan, which allows us to increase our efficiency. In the last 10 years, the number of line ruptures has been reduced by almost two-thirds. With a network of more than 17,000 kilometres, this ratio places us among the best operators internationally. This improvement is the result of the implementation of network sectorisation and pressure management.
We continue to grow in regenerated water and in 2016 we decided that all of our tertiaries would work 100% every month to improve the quality of our discharges into waterways. This will mean the dumping of 125 million cubic metres a year with tertiary treatment, which is far more demanding than that authorised for the discharges from our WWTPs.
Last year, we recorded a slight increase in the number of contracts In 2016 we improved our social tariff, including (1.34%) and we are very close to reaching 1.5 million. Customers who, once again, continue to rate us as outstanding in terms of among its beneficiaries all non-contributory satisfaction, which in 2015 was the best rating in our sector in Spain. pension recipients in the Autonomous Community of Madrid.
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Our relationship with the municipalities is a particularly important As for the employees, Canal‘s best asset, the company‘s first own issue for Canal de Isabel II. The actions we have carried out in 2016 collective bargaining agreement was signed, homogenising the include 23 sewerage plans and 5 supply plans for 27 municipalities. working conditions of all employees (whether permanent or temporary). Our tariffs, which are among the most affordable, are almost 25% below the Spanish average, according to FACUA, and are among the In addition, we are transparent in the performance of our most affordable of all European capitals (48.6% below the average). management: we have responded to 323 requests from Moreover, in 2016 we again froze tariffs for 2017, and they will parliamentarians of the Madrid Assembly in 2 years, and the remain frozen for the rest of the parliamentary term. In 2016 we Chamber of Accounts is performing a comprehensive audit of also improved our social tariff, including among its beneficiaries all the company over the 2008-2015 period. We successfully passed non-contributory pension recipients in the Autonomous Community the tax inspection controls, we report to the CNMV and, due to of Madrid. With this discounted rate, families can have 12,500 litres the regrettable events related to “Operation Lezo”, we provide per month supplied to them for less than 4 euros (including VAT). everything that is required of us by the Public Prosecutor‘s Office Finally, in our internal protocols we included the express prohibition and the Spanish High Court. of cutting off supply in cases of families who are going through financial hardship. Financially, both turnover and results were very similar to those of 2015. This allowed us to distribute part of the profits in the form of We are one of the companies in the sector in Spain that most invests dividends to 111 shareholding town councils, reaching 129 million in R&D&i. Our new R&D&i Strategy (2017-2020), aligned with the euros since 2012 (a total of 22.32 euros per inhabitant). Autonomous Community of Madrid plans (PRICIT), will increase our R&D&i budget by 236%. The aim is to invest 2% of our turnover in We have experienced difficult times in 2016 and the first months innovation by 2020. of 2017, but Canal is a company with 166 years of life that has experienced technical, political, social and environmental difficulties, We believe in and are committed to the circular economy and the and it has always been able to continue providing service. We are environment. Currently, our company has the greatest installed confident that, with the collaboration of all those who interact with power for the production of electric energy from renewable or us - customers, employees, citizens and shareholders - the company high-efficiency sources. Thus, in 2016 we produced more than will continue to thrive. 261 million kilowatt-hours, more than 62% of our total consumption.
Our social commitment has continued to advance in 2016 with such notable actions as the Canal Voluntarios project in Anantapur (India) Rafael Prieto Martín or the exhibition “Cleopatra and the Fascination of Egypt”, which CEO of received 222,581 visitors. Canal de Isabel II
As for the employees, Canal‘s best asset, the company‘s first own collective bargaining agreement was signed, homogenising the working conditions of all employees.
13 1 OUR COMPANY
14 2016 Annual Report Canal de Isabel II
The company Canal de Isabel II is a public company. Its shareholders include the Autonomous Community of Madrid, through the public entity Canal de Isabel II, and one hundred and eleven municipalities of the Autonomous Community of Madrid (Spain). The company started its activities on 1 July 2012, taking over most of the competences and activities of the public entity Canal de Isabel II, created in 1851, which since 1984 has been the public company dependent on the Autonomous Community of Madrid in charge of managing the integral water cycle.
Canal manages the whole water cycle in In 2016, the Group‘s companies managed virtually the entire region, i.e. of all processes a total of 848 million cubic metres of water oriented towards the adequate management (542 million cubic metres in Spain and of water resources and the conservation of the 306 million cubic metres in Latin America) environment. These processes, which include and 46,095 kilometres of supply, sanitation the collection, treatment and monitoring of and regenerated water networks, supplying water quality, its transport and distribution, 10.05 million people (6.75 million in Spain the sanitation and purification of wastewater and 3.30 million in Latin America), employing and its regeneration for subsequent reuse, 6,690 workers and generating more than are necessary to develop and maintain the 6,500 indirect jobs. At the end of FY 2016, quality of life of Madrid‘s residents. the Canal de Isabel II Group had close to 2.3 million supply contracts (86% of which The experience accumulated by Canal de are domestic) in more than two hundred Isabel II in more than a century and a half of municipalities, with a supply coverage of management allows us to contribute added 98.01%, 99.62% in Spain. value through other activities related to the water sector in geographical areas other than the Autonomous Community of Madrid. Thus, since the 1960s, Canal began to build a group of investee companies that, along with our company, constitute the modern-day Canal de Isabel II Business Group.
Population supplied per country (millions of inhab. /% of total)
0.51 Mill. /5.04%
3.29 Mill. / 32.80% Canal de Isabel II in the Autonomous Community of Madrid Other companies in Spain Companies in Latin America
6.25 Mill. / 62.16%
The main figures of the Canal Group at FY 2016 end are detailed in chapter 5, “The Canal Group”.
15 1. OUR COMPANY
Main figures in the Autonomous Community of Madrid 2016
6.25 mill. 6.46 mill. inhabitants supplied inhabitants served in sanitation (173 municipalities) (179 municipalities)
491.48 hm3 1.45 mill. rerouted for consumption in contracts with customers
12.41 hm3 of regenerated water supplied 487.27 hm3 treated in WWTPs 81.56 MW installed for electric power generation
2,590 mill. kWh employees in the workforce 261.41 (including in the Cáceres office) produced in 2016
€187.7 mill. €866.8 mill. in investments in turnover
16 2016 Annual Report Canal de Isabel II
Technical information at FY 2016 end
SUPPLY SANITATION
Number of reservoirs 14 Kilometres of municipal sewerage networks 14,018 managed Reservoir capacity (hm3) 945.85 Kilometres of major sewer and outfall networks 823 Water rerouted for consumption in reservoirs and 491.5 catchments (hm3) No. of buffering basins and storm tanks managed 65
Number of catchment wells in operation 78 Capacity of storm tanks managed (hm3) 1.48
Kilometres of network (conveyance and 17,434 No. of wastewater pumping stations managed 133 distribution) No. of wastewater treatment plants managed 157 No. of drinking water treatment plants (2016) 14 Rated treatment capacity (millions of population 17.57 Treatment capacity (hm3/day) 4.55 equivalents)
No. of major regulating reservoirs 33 Water treated in WWTPs (hm3) 487.27
Storage capacity of major reservoirs (hm3) 3.2
No. of small reservoirs 291
No. of major pumping stations 22
REUSE CUSTOMERS AND POPULATION SERVED IN THE AUTONOMOUS COMMUNITY OF MADRID No. of existing reuse plants 23 Number of contracts (millions) 1.45 Kilometres of regenerated water network 512 Population supplied in the Autonomous Community 6.25 Regenerated water reservoirs in service 63 of Madrid (millions of inhabitants)
Volume of regenerated water produced Supply coverage (percentage of inhabitants in the 12.41 96.57% (hm3/year) A.C. of Madrid)
Municipalities with reuse services through Canal 22 Municipalities supplied by Canal de Isabel II in the 173 Autonomous Community of Madrid Golf courses with reuse agreements or contracts 10 with Canal Population served in sewerage management 5.50 (millions of inhabitants) Industries and other entities with reuse agreements 11 with Canal Coverage of sewerage management (millions of 85.02% inhabitants)
Municipalities managed in sewerage 134
Population served in wastewater treatment 6.46 (millions of inhabitants)
Coverage in wastewater treatment (percentage of 99.87% inhabitants)
Municipalities managed in wastewater treatment in 179 the Autonomous Community of Madrid
17 1. OUR COMPANY
1.2. Our business: the integral water cycle
From the moment a drop of rainwater falls from the sky until it returns to rivers or the sea in the best conditions, it goes through a cycle that is commonly called the integral water cycle.
The cycle consists of two main phases: to guarantee its sanitary characteristics, supply and sanitation, which correspond enabling its use for garden irrigation, to the actions necessary to bring drinking street cleaning, watering sports areas and water to consumers, and the collection and even for industrial use. Canal de Isabel II treatment of wastewater. A third phase can currently manages all the phases and stages be added to this cycle, namely the reuse of mentioned above. the wastewater after adequate treatment
REUSE CONVEYANCE
A more advanced treatment In order to have water process at certain wastewater any time throughout the year, treatment plants allows the use it must be collected and stored. of treated water for irrigation It must then be subjected of public green areas, street to different processes that cleaning and industrial uses, guarantee its disinfection and among others. channelled through large pipes to the tanks from where it is distributed to homes, industries and services.
TREATMENT DISTRIBUTION Return of suitably Water conveyance purified water to channels or from the municipal reservoirs to receiving means so that its the individual connections through natural cycle is not affected. pipelines SEWERAGE SYSTEMS
Collection of waste water and rainwater, and evacuation to the various discharge points
All the information about the integral water cycle is available on our website: http://www.canalciclointegraldelagua.es/en/
18 2016 Annual Report Canal de Isabel II
Supply: conveyance (collection and treatment)
The supply system for the Community of The reservoirs managed by Canal have a total Madrid managed by Canal de Isabel II is storage capacity of 945.85 million cubic metres, mainly based on surface water catchment, 62.2% of which is located in the Lozoya river using the 14 reservoirs managed by Canal basin. The main reservoir of this region is the to take advantage of inputs from the Lozoya, El Atazar reservoir, with a capacity of more Jarama-Sorbe, Guadalix, Manzanares, than 425 million cubic metres. Guadarrama-Aulencia and Alberche rivers, from where 90% of the water supplied to The abstraction of groundwater, as a support the network comes. to surface water supply, is a key element in the management of the supply system during The water that these rivers provide varies periods of drought or water scarcity, and can greatly from one year to another. The average contribute up to 90 million cubic metres per input is 764.8 million cubic metres per year year of exploitation. To guarantee this volume (as can be seen in the graph), although it has we have 78 wells in operation. reached as high as 1,756 million cubic metres (in 1941) and as low as 238.8 million cubic Moreover, Canal also has the possibility metres (in 2005). An input of 730.45 million of transferring water from the reservoirs cubic metres was recorded in 2016, which is of San Juan and Picadas, on the Alberche 4.49% less than the historical average. River, and the Guadarrama and Sorbe Rivers through the weirs of Las Nieves and Pozo de
Cumulative natural inputs (cubic hectometres per calendar year)
1,000 900 800 Average: 764.8 700 2016: 730.5 600 500 2015: 480.9 400 300 Minimum: 237.7 200 100 0 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec
Minimum input year 2005 Average input 2015 input 2016 input
You will find more details about our reservoirs and catchments in the link: http://www.canalciclointegraldelagua.es/captacion_aguas-superficiales_embalses.html
19 1. OUR COMPANY
Los Ramos, respectively. We can also supply From all the catchment possibilities described Origin of water rerouted in 2016 (491.48 hm3) from the San Juan reservoir to the Rozas de above, Canal obtains the resources that are Puerto Real DWTP and, from 2016, to the subsequently sent to the treatment plants, new Pelayos de la Presa DWTP. Finally, it is through a network of large canals and raw 1.78% also possible to collect water from the Tagus water pipes that, at the end of 2016, had a 7.92% River in order to supply it to the networks total length of 231.7 kilometres. once treated in the DWTP of the same name. Canal de Isabel II manages 14 Drinking 1.34% The total volume of water derived for Water Treatment Plants (DWTPs) with a total 33.54% consumption totalled 491.48 million cubic nominal capacity to treat 4.55 million cubic metres in 2016,1.24% less than the 2015 metres per day. volume and 3.78% lower than the average over the previous five years (2011-2015). 55.41%
El Atazar Rest of Canal reservoirs Groundwater Picadas and San Juan reservoirs Other catchments Volume rerouted for consumption (hm3)
540.90 524.98
496.85 497.67 493.43 For more information about our 491.48 treatment plants, visit this link: http://www.canalciclointegraldelagua. es/es/tratamiento.html 2011 2012 2013 2014 2015 2016
20 2016 Annual Report Canal de Isabel II
If you would like to know more about distribution, Supply: drinking water distribution visit this link: http://www. canalciclointegraldelagua.es/en/ In the journey of the water from the The regulating tanks are enclosures distribucion.html DWTPs to the user‘s tap, Canal de Isabel designed to store the water that supplies II has a series of installations that ensure the population. The company manages 33 the maintenance of the service: the large of these large regulatory reservoirs, with a pipelines, the regulating tanks, the pumping total capacity of 3.2 million cubic metres, in stations and the distribution network addition to a further 291 smaller regulating guarantee a continuous service, with the tanks. required pressure and quality. The networks managed by Canal in 2016 reached a length In order to take the water from the of 17,434 kilometres (of which 3,082 km corresponding reservoirs and raise it to were for adduction). a higher level, thus guaranteeing the supply of water in the highest areas of the Community of Madrid, Canal has 22 large pumping stations and 109 smaller pumping stations.
Water supply in the Autonomous Community of Madrid
Evaporation: 59.69
Input: 730.46
Environmental return: 780.01 Wells: 6.60
Las Nieves: 49.96 Volume in Leakage: Picadas: 38.50 reservoirs: Hydrological safety: 101.37 667,449 (70.6%) Environmental: 837.36 Sorbe: 11.90
La Parra: 0.00 San Juan: 17.07 Rerouted from reservoir: 445.55 Tagus: 0.00
Leakage from Other transfers: 0.63 operation: Refilling 0.00 aquifers: 0.00 Transfer to Pedrezuela: 1.51 Pedrezuela: 11.51
Consumption: 491.48
21 1. OUR COMPANY
Sanitation: urban sewerage and drainage
The purpose of sewerage and urban Other major facilities managed by Canal drainage networks is to collect sewage and include the 133 Wastewater Pumping rainwater in the municipalities and convey Stations (WWPS‘s), whose mission is to pump it to treatment plants. As at 31 December wastewater when it cannot be transported 2016, Canal maintained these networks in to the WWTPs by gravity. Another 65 storm 134 municipalities, collecting the wastewater tank and buffering basin facilities are also of 5.5 million inhabitants. managed, with a combined capacity of 1.48 million cubic metres. Their purpose The total length of the municipal networks is to prevent flooding, as well as retaining managed amounts to 14,018 kilometres of the first rainwater that is the most polluting, pipelines. At the same time, Canal manages minimising its effect on the channels. 823 kilometres of supramunicipal pipelines and outlets, collecting and transporting wastewater from the municipalities to the corresponding WWTPs.
More details on sewerage management and purification Sanitation: purification of waste water are available at this link: http://www. canalciclointegraldelagua.es/en/ After the collection and transport of continuous, high-quality and efficient saneamiento.html wastewater through the sewage systems of service that covers the entire territory. In towns and cities, treatment or purification 2016, Canal‘s 157 Wastewater Treatment takes place so that it can be properly Plants (WWTPs), with a nominal treatment returned to natural watercourses, under the capacity of 17.57 million equivalent quality standards set by the European Union inhabitants, treated a total of 487.27 million and national, regional and local legislation, cubic metres of wastewater and managed or for subsequent reuse. to eliminate 96% of suspended solids, 97% of BOD5, 93% of COD, 91% of phosphorus Canal de Isabel II is in charge of performing and more than 61% of nitrogen contained this task in 179 municipalities. To this end, in wastewater. we have excellent infrastructures that allow us to provide an extremely technical
22 2016 Annual Report Canal de Isabel II
Find out more about wastewater reuse in the Regeneration and distribution of treated waste following link: http://www. water for reuse canalciclointegraldelagua.es/en/ saneamiento_agua-regenerada. html Canal de Isabel II considers that the reuse and 512 kilometres of reuse networks that of treated waste water is an essential had provided a total of 12.41 million cubic component of the integrated management metres of water to municipalities that had of the resource and contributes to the this service. 22 municipalities now have net increase in availability of water in the reused water supply in 2016, and this region. For this reason, in recent years, number will increase in the coming years Canal has increasingly developed its activity thanks to the signing of 21 new supply of distributing regenerated water for agreements. installations that do not require drinking water, especially for street cleaning and the To better understand the value of reuse, irrigation of public parks, golf courses, and with the regenerated water produced by even for industrial uses. Canal, 1,494 hectares are currently being irrigated in 218 green areas of the region By the end of 2016, Canal had 23 and 10 golf courses with a total surface area regenerated water production facilities of 699 hectares. (tertiary treatment) with capacity to produce 308,126 cubic metres per day
Situation of regenerated water supply in the municipalities of the Autonomous Community of Madrid (2016)
In service in 2016 (22 municipalities) Under way in 2017 (3 municipalities) To be implemented starting in 2018 (13 municipalities)
23 1. OUR COMPANY
Value chain of the Canal de Isabel II Business Group
Potential Financial Regulators Shareholders Strategic partners business institutions generators and investors
Environmental organisations
Ground Desalination Society Surface
Employees CATCHMENT SYSTEM
Spain Colombia Brazil REUSE Peru Spain EXTERNAL Ecuador TREATMENT SUPPLIERS CUSTOMERS AND USERS Water Spain Colombia Domestic Services Brazil Peru Electricity Institutions Infrastructure (city councils) Machinery DISTRIBUTION Industrial and commercial Chemicals and Reagents Spain Material Ecuador Colombia Brazil Peru
INTERNAL MANAGEMENT ENVIRONMENTAL SUPPLIERS SEWERAGE SYSTEMS Companies of the group that Spain operate as strategic Ecuador suppliers: Colombia Pilot solutions and Peru cost laboratories WATER TREATMENT
Spain Ecuador Colombia Peru
24 2016 Annual Report Canal de Isabel II
1.3. Organisation of our public company
Canal de Isabel II‘s corporate organisation and governing bodies meet the requirements arising from its legal status as a public limited company since its creation in June 2012.
Shareholding structure of Shareholders Canal de Isabel II (as at 31 December 2016) The share capital of the public company 111 municipalities holding shares in the Canal de Isabel II is represented by company was formalised on 14 December 7.60% 1,074,032,000 ordinary shares, each with a 2012, in compliance with what was agreed 10.00% nominal value of one euro. with said municipalities in the agreements of incorporation signed in 2011 and 2012. The incorporation of the company Canal de Isabel II Gestión, S.A. (currently Canal By the end of 2016, the 111 municipalities de Isabel II, S.A.) was authorised by that owned Canal de Isabel II had a total of agreement of the Governing Council of 5,787,5588 inhabitants, or 89.49% of the 82.40% the Autonomous Community of Madrid on population of the Autonomous Community 14 June 2012 (published in the Community of Madrid (92.29%, excluding Alcalá de of Madrid Official Gazette of 21 June Henares). 2012). The delivery of the shares to the Other 110 municipalities of the Autonomous Community of Madrid Madrid City Council Autonomous Community of Madrid (through the Canal de Isabel II public entity) Governing bodies
Canal de Isabel II‘s corporate governing The Board of Directors holds its general bodies are the General Shareholders‘ meetings once a month or when the Meeting, which includes all shareholders of chairman decides to convene them. In the company, and the Board of Directors. addition, pursuant to Royal Legislative Decree 1/2010 of 2 July 2010, which Given the characteristics of the company‘s approves the revised text of the Spanish shareholders (100% public), the composition Law on Corporations and the Company‘s of the Board of Directors is governed mostly Articles of Association, the Board of by its public nature, with six Proprietary Directors‘ committee system contained in Directors and three Independent Directors. Articles 529(13) and 529(14) of the Spanish The Directors are subject, regarding Law on Corporations, respectively, is also incompatibilities, to Law 3/2015 of 30 March applicable to Canal de Isabel II S. A. in its on the regulation of conflicts of interest of capacity as an issuer of securities other Government members and senior officials of than shares admitted to trading on official the General State Administration, and to Law secondary markets. 14/1995 of 21 April on the incompatibilities of senior officials of the Autonomous At present, the Board‘s Committees are the Community of Madrid, thus ensuring Audit Committee and the Appointments greater transparency and preventing the and Remuneration Committee, both of occurrence of potential conflicts of interest. which are chaired by independent directors and the majority of which are made up of With regard to incompatibilities, Directors directors in this category. are subject to Law 5/2006 of 10 April on the regulation of conflicts of interest of members of the Government and senior officials of the General State Administration.
25 1. OUR COMPANY
CHAIRMAN Mr Ángel Garrido
SECRETARY (NON-DIRECTOR) Mr Manuel Beltrán
DEPUTY CHAIRWOMAN Mrs Engracia Hidalgo
DIRECTORS
Mr Ángel Garrido Mr Rafael Prieto Mr Pedro Manuel Rollán Mr Guillermo Hita Mr José Conesa (proprietary) (proprietary CEO) (proprietary) (proprietary) (independent)
Mrs Engracia Hidalgo Mr Jaime González Mr José Antonio Díaz Mr Jacobo Pedro Martínez Mr Raúl Canosa (proprietary) (proprietary) (proprietary) (independent) (independent)
BOARD COMMITTEES
AUDIT COMMITTEE APPOINTMENTS AND REMUNERATION COMMITTEE
Chairman Chairman Mr José Conesa Mr Raúl Canosa (independent) (independent)
Mrs Engracia Hidalgo Mr Jacobo Pedro Martínez Mr Pedro Manuel Rollán Mr Jacobo Pedro Martínez (proprietary) (independent) (proprietary) (independent)
The General Shareholders‘ Meeting allocation of profits. Since the creation of determines the number and appoints Canal de Isabel II in 2012, and until 2016 the members of the Board of Directors. (including the complementary dividend Currently, the Board comprises ten Board paid in 2017), a total of 734.03 million Members and a Secretary (non-member): euros have been paid out: 604.83 went to the Community of Madrid, 73.40 to the The Shareholders‘ Meeting, among Madrid City Council, and 55.79 to Canal‘s other powers legally attributed to it, is other shareholder municipalities. This responsible for approving the company‘s represents a contribution of 22.32 euros per management, approving the accounts inhabitant in the 111 municipalities that are for the previous year and deciding on the shareholders.
You can find more information about Canal de Isabel II Board members here: https://www.canaldeisabelsegunda.es/en/Informacion_accionistas/Gobierno_ corporativo/ConsejoAdmon/index.html
26 2016 Annual Report Canal de Isabel II
Organisation and Executive Management
Our organisation has a structure composed The Company has a Management of different divisions, subdivisions and Committee, which is chaired by the Chief departments. At the end of 2016, the Executive Officer and made up of the management structure in effect was as directors of Canal de Isabel II, which meets follows: on a regular basis to resolve the major issues
CHAIRMANSHIP
Chairman‘s Office
CHIEF EXECUTIVE OFFICER
Technical Innovation and Operations Sales Financial and Business Resource Security General Engineering Division Division Development Division Division Division Secretariat Division
affecting the company in any field (analysis These indicators are grouped into seven of economic, operational, commercial or areas of analysis: resource management, environmental information), as well as to environmental efficiency, solvency and deal with any other substantial matters profitability, pace of investment, efficiency proposed by its members. in internal processes, public image and electricity consumption/production. On an annual basis, the Management Committee sets management objectives, The Management Committee informs the which are monitored on a monthly basis Chairman of the Board of any significant by means of management indicators in the issues that may affect the company‘s environmental, economic and social fields. activity.
Other Committees and Commissions
As noted earlier, the Audit Committee is In addition to the aforementioned committees, made up of three directors (two of them Canal periodically holds different committees independent and one proprietary), with made up of executive management members. the Chairmanship of the Committee legally These committees cover various topics, mandated by one of its independent including the Supply Management Committee, directors; the same regime is established the Energy Committee and the Committee on for the Appointments and Remuneration Information Systems, among others. Committee.
27 OUR CONTEXT AND 2 FUTURE CHALLENGES 2016 Annual Report Canal de Isabel II
2.1. The value of water
Until the end of the 20th century, concern ●● Water is a public necessity good. about access to water was very limited Adequate access for consumers in Growing demand and to certain geographical areas suffering affordable, fair and equitable terms shrinking water resources from scarcity, and the fact that it might should be ensured, so that the resource is due to climate change imply be a problem on a global scale was not shared, avoiding concentrations of power. even considered. The traditional paradigm Tariffs must be structured in such a way the need to change water considered that water was not a scarce that users with less purchasing power management strategies. resource, but rather that it was poorly can have access to the service, sharing distributed. Thus, the water scarcity the costs fairly. problems faced by certain dry and arid regions were local and considered to be the ●● Water is a scarce economic good. The We must ensure supply to result of a poor distribution of the resource. long-term replacement and maintenance all users in affordable, fair of assets must be ensured. To this end, This approach was also applied in Spain, with the cash flows obtained in water and equitable terms, so the dichotomy of a “wet” and a “dry” Spain. management must guarantee the that those with the least Thus, water policy focused on transfers and conservation of the value of these assets; purchasing power have major hydraulic works, such as dams or water management must guarantee access to the service. desalination plants. operational efficiency and prices must be a sign of the real costs incurred in However, the growing demand for water, providing water to consumers. coupled with a reduction in renewable water resources (the consequences of ●● Water as a key element in the climate change and global warming, among environment. It is necessary to other reasons) are causing a major change discourage the depletion of water, a in the paradigm of water management, critical natural resource, promoting making water scarcity a global problem responsible consumption to ensure that that affects both developed and developing its ecological functions are preserved and countries. The new paradigm views water that the alteration of natural waterways is as a basic resource for human life, which kept to a bare minimum. must be managed as a scarce commodity of increasing value. For this reason, it Spain is no stranger to this concept: is necessary to reconcile the different between 2003 and 2007, the percentage dimensions of water and find a balance of the country‘s surface area at risk of between them all: desertification rose from 31% to 37%. This is a situation that we must not ignore. Other sources, such as “Water Intelligence”, say that in 2008, 34% of our country‘s population was living at considerable risk of water scarcity.
Riosequillo Dam
29 2. OUR ENVIRONMENT AND FUTURE CHALLENGES
2.2. Context in which our sector operates internationally
Throughout its more than 165 years of activities, such as the management of the history, Canal de Isabel II has adapted integral water cycle. The socio-economic progressively to the demands and challenges and technological trends that will most posed by a changing and increasingly affect our sector at an international level in competitive environment, and has been the coming years are: able to do so within a unique framework of
Population growth: The world‘s population is Water scarcity: This Economic progress: It is expected to reach 8.4 billion by 2032, although population increase and the estimated that the number of this growth will take place especially in associated increase in middle-class inhabitants (people developing countries. This will entail a greater demand, coupled with the with purchasing power between need for water management infrastructures. adverse effects of climate USD $10 and $100 per day) will change, will lead to water increase by 172% in 2030 with scarcity. respect to 2010 levels.
Urban growth and urbanisation: In 2009, for Digital transformation: The reduction of technology costs will the first time in history, the urban population facilitate businesses‘ access to them. surpassed the rural population. This trend is expected to continue in the coming decades. Utility companies will probably be the ones Increased technological competitiveness: However, there will be that will experience the greatest impact of this competitive pressure for the use of this technology, which will make it trend on their business models. possible to obtain higher returns for the companies that most apply it. Digitalisation is no longer an option, it is a necessity.
30 2016 Annual Report Canal de Isabel II
For more information see Projections and studies carried out by the for all” and seeks to address global water section 4.7. main international organisations suggest scarcity, poor water quality and inadequate that the problem of water scarcity, far sanitation, which negatively affect food from being mitigated, will continue to security, livelihood options and educational worsen in the medium and long term. For opportunities for poor families. this reason, in 2015, the United Nations included Goal 6 among the Sustainable Canal de Isabel II, like all the companies Development Goals approved by its in our sector worldwide, is committed General Assembly, dedicated to water and to the achievement of this Goal 6 and sanitation. Specifically, this goal focuses on is implementing actions to advance this “Ensuring the availability of water and its achievement. Among these actions, Canal sustainable management and sanitation Voluntarios especially stands out
Sustainable Development Goals approved by the UN Assembly
31 2. OUR ENVIRONMENT AND FUTURE CHALLENGES
2.3. Us and our sector in Spain
See complete information on all Canal de Isabel II accounts for approximately and those published in 2016 by the Spanish compared parametres in Annex 1. 13% of the urban water management Association of Water Supply and Sanitation sector in Spain and is currently the largest (AEAS) and the Spanish Association of Urban company in our country that manages Water Management Companies (AGA) in this unique and integral system. The their “14th National Study on Drinking Water population supplied by Canal accounts for Supply and Sanitation in Spain”, which was almost 40% of the population served by based on 2014 data. Thanks to this study public companies in Spain. This and other we can make a comparison between our extremely useful data are obtained from the figures and those of our sector. comparison of our company‘s 2014 figures
Comparison of some of Canal de Isabel II‘s figures in 2014 and the data of our sector published in the “14th National Study on Drinking Water Supply and Sanitation in Spain 2014”, published by AEAS and AGA in 2016.
Percentage of population served by type of company (2014)
10.0% Canal de Isabel II Other public companies 34.0% Municipal Services 20.6% Private company Mixed (public/private) company
13.4% 22.0% Source: AEAS (2016)
Our more than 6.2 million inhabitants served represent 13.4% of Spain‘s population and 39.41% of the inhabitants served by public companies in the sector.
Contribution to Spain‘s GDP (0.62%) 12.82% 0.08% Canal de Isabel II This is the percentage of Canal‘s turnover with respect 0.54% to the total of our sector in Rest of sector Spain (840 million vs. 6.479 companies billion euros per year)
Canal de Isabel II‘s turnover in the Autonomous Community of Madrid accounts for 0.42% of the region‘s GDP.
32 2016 Annual Report Canal de Isabel II
Price of services in euros/m3 for a Investment in infrastructures Per capita household consumption “typical” AEAS customer (litres per inhabitant and day) (weighted by inhabitants served) 12.57%
1.77 1.47 Sector average 139
87.43% Canal de Isabel II 124
Spain average Canal de Isabel II Canal de Isabel II Rest of operators
Our tariffs are 16.95% below the With 200 million euros annually, Canal‘s consumption per inhabitant/ average in Spain (”typical” domestic Canal is the operator that invests day is 10.79% lower than the sector customer of AEAS) the most in Spain within our sector. average.
Length of managed networks Metres of network per inhabitant served Although we serve 17,346 4.8 13.4% of the Spanish 13,854 3.6 population, we treat 2.8 207,654 2.5 151,146 24.69% of the wastewater treated
Supply Sanitation Sector average Canal de Isabel II in our sector and
Canal de Isabel II Supply almost 100% Rest of the sector Sanitation (99.86%) with at least We manage 7.71% of the supply The high population density in the biological treatments networks and 8.40% of the Autonomous Community of Madrid means sanitation networks in Spain. that our networks are less extensive than (71% for the sector) the sector average (42% less in supply and 30% less in sanitation).
Percentage of reclaimed water produced for Final destination of WWTP sludge non-agricultural uses (hm3/% of the total) 10% 0.31% 11.83/5.27% 11% 100% 99.69% 79% Customers with letter of services with financial compensation (59% 212.84/94.73% Spain average Canal de Isabel II in the sector)
Dumpsite/landfill Customers entitled Incineration to social tariff with Canal de Isabel II Agriculture and gardening/parks discounts of up to Other public companies 76% of the tariff (90% of customers in We have not yet reached levels Almost 100% of the sludge from the sector) comparable to our market share in the our WWTPs is reused in agriculture reuse of waste for urban purposes. and gardening/parks.
33 2. OUR ENVIRONMENT AND FUTURE CHALLENGES
G4-27 2.4. Our main challenges
Throughout its 166-year history, Canal de Isabel II has grown by contributing to solving the challenges facing the society of Madrid and adapting to its growing water supply needs.
The main challenges that our company To these challenges we must add the still will have to face in the future in order to necessary level of awareness and culture guarantee the fulfilment of our main mission in the rational use of water (which must (the supply of water to all our users) have be extended to all of society, including to do, on the one hand, with the scarcity regulators and administrations), with of the natural resource, and, on the other, the maintenance of demanding levels with maintaining the sustainability of our of investment in infrastructures and the management model. necessary adaptation to a constantly changing globalised world.
34 2016 Annual Report Canal de Isabel II
G4-27
1. 2. Guaranteeing access by all to a Preserving environmental quality resource sustainability Achieving maximum efficiency in delivering quality services With regard to sustainable development, one of the main that are sustainable over time is one of the main challenges we challenges facing our company is to meet the quality objectives face. Due to the climatic characteristics of our region and the set by the EU Water Framework Directive (WFD). Achieving these irregularity and sometimes lack of rainfall, water is a strategic and objectives will allow water bodies to significantly improve their limited natural resource. quality, but will require great technical and economic efforts.
In recent decades, and despite dwindling contributions, Canal has In order to meet this challenge, Canal de Isabel II has established, had to cope with a large increase in population, with the same as part of its business objectives, a plan specifically designed reservoir capacity. Our supplied population has increased from to comply with the WFD within the established deadlines and 5.50 million inhabitants in the year 2000 to 6.25 million in 2016, has worked on new purification infrastructures and on the an increase of nearly 14%. improvement and expansion of existing infrastructures.
The trend in the future is for water demand to increase more In addition to efforts to improve purification, the current moderately than in previous decades, and yet it will be increasingly technological development can lead to an increase in the costly to maintain supply due to the effects of climate change on available resource, using wastewater regeneration techniques for inputs. Faced with the hydric stress challenges posed by climate subsequent reuse and others that provide greater efficiency to all change, it is necessary to think ahead in order to maintain or water uses, including industrial use. Canal de Isabel II is promoting improve the current guaranteed levels, even with rainfall regimes the gradual use of reused water in the Autonomous Community different from those known so far and a moderate increase in of Madrid for uses other than water supply, such as irrigation of population. green areas, industrial uses and street cleaning.
But, in addition to quantity, we have an obligation to maintain the But environmental sustainability also offers opportunities. The current quality of the resource even using different sources of new concept of the “circular economy” must be one of our future supply. In the coming years, Canal will have to work on measures objectives, given that we have opportunities to take advantage of that guarantee this quality from the origin to the user, improving the by-products of our processes for the generation of resources its processes and networks. such as electric power or fertilisers by means of techniques already implemented in Canal and which we will develop on a larger scale in the future.
35 2. OUR ENVIRONMENT AND FUTURE CHALLENGES
G4-27
3. 4. 5. Promoting the Growing sustainably Adapting to a changing necessary change in Canal de Isabel II is recognised as one of world user habits the best European operators in the integral The rapid evolution and transformation cycle. The experience acquired in recent In addition to optimising the use of of society in recent years has created decades in the Autonomous Community new challenges in all sectors and for the resource, Canal de Isabel II will of Madrid is a guarantee that can allow continue to focus on raising awareness all businesses providing services to the us to grow towards new activities in the public. Technological development creates of the rational use of water as a means coming years, but this growth, which of ensuring future sustainability. It is new opportunities for advancement and must be based on synergistic processes, progress, but in turn, given the global extremely important for society to adopt should not lead to new investments a culture of water based on respect for prospects of accelerated growth, it is outside the Autonomous Community of increasingly necessary to ensure the the resource, and on the knowledge that Madrid. it is a scarce commodity. sustainability of social, economic and environmental development. Canal still has room to grow in our As one of our main programmes, and geographical area, providing new on a permanent basis, Canal maintains The current globalised world is in a integral cycle services, mainly sewerage, process of continuous change in which campaigns and actions focused on to municipalities where we are not yet awareness-raising and education, aimed new transnational risks and threats arise, operating. We can also grow alongside which, together with the traditional ones, at all citizens and at the different sectors our customers with new value-added of activity, with the aim of promoting poses more threats and makes societies services such as maintaining internal more vulnerable. Water cycle facilities and consumption and rational use of water, networks or supplying regenerated avoiding waste as much as possible. the computer systems with which they water to a larger number of industries. are managed are key infrastructures for Internationally, like other Spanish ensuring the competitiveness of regions, public companies, our technical skills without which modern development is and accumulated knowledge would unthinkable. In order to maintain its position potentially allow us to provide assistance as one of the most developed regions in and consultancy to other geographical Spain, Madrid must continuously ensure its areas. supply in terms of both quantity and quality.
The current context is rapidly changing the ways in which people connect and interact with businesses. We live in a growing digital environment, so it is necessary that we evolve towards new systems that allow us to tackle the digital transformation and, in this way, address the needs of users and customers.
As is the case in other industries, the urban water services sector is evolving at the same pace as society as a whole, although, since it is an essential public service, it does so under very particular conditioning factors. In this global context of commitment and responsibility for sustainability, environmental demands are increasing every day. The same goes for social expectations and needs. Therefore, Canal de Isabel II must face the new challenges with a proactive attitude and, above all, supported by strong advances in research, development and innovation.
36 2016 Annual Report Canal de Isabel II
G4-27
6. Fostering efficiency and excellence Efficiency is an obligation, also in public enterprises. We must demonstrate to society that we are efficient, while ensuring good governance and transparency as central elements of our management. These assets, together with social commitment, are what will allow us to make the citizens of the Autonomous Community of Madrid feel Canal as something of their own: their great water company.
Our professionals are the basic pillar that will allow us to face all the programmes to develop in the future. With their excellence, effort and proactive spirit we should build the future and address the challenges now facing us. It is therefore necessary to retain these professionals and ensure their development within the company.
Having sufficient resources to meet future challenges will only be possible with the necessary economic sustainability of the company. Effective financial and process management is essential to this end, enabling us to make economic savings and eliminate possible inefficiencies. As a result, we will be able to maintain our solvency by providing quality services at affordable rates over the next few years.
37 OUR MISSION AND 3 COMMITMENTS 2016 Annual Report Canal de Isabel II
3.1. Canal‘s mission, values and commitments
This mission includes the values of our company, which are as follows:
We care for our community by ●● Commitment: We become involved in the lives of the inhabitants of our Community by providing services that are absolutely essential for the development of Madrid‘s people, managing the water of all with its economy and its society. transparency, efficiency and ●● Proximity: We want to be a friendly, human company to all our stakeholders and sustainability. counterparts.
●● Transparency: We manage a publicly owned natural resource and we are a public company that, therefore, has the responsibility to be an example of transparency in all its actions.
●● Excellence: Since we manage public resources, we must be especially demanding with our performance to optimise this management, through the effectiveness and efficiency of all our actions.
●● Sustainability: We are managers of a natural resource and have the mission to protect the quality of our region‘s water bodies. Conservation of the environment and the sustainable management of all our activities are part of our DNA as a company.
Canal has given shape to its mission through ten commitments. These are:
1. To be the benchmark public company and driving force of the Autonomous Community of Madrid.
2. To work to manage the integral water cycle in Madrid.
3. To lead the industry‘s challenges and regulatory developments (”going beyond the norm”).
4. To maintain, innovate and plan our infrastructures and services (adapting them to the future needs of society).
5. To minimise the environmental impact on all our processes by favouring the efficient use of resources and energy and promoting renewable generation.
6. To proactively pursue the satisfaction of our customers and users, ensuring a level of excellence in quantity, quality and continuity of service.
7. To ensure affordable and solidarity-driven tariffs, encouraging savings in consumption.
8. To strengthen the digital transformation for more hands-on management.
9. To perform rigorous and transparent financial management, ensuring the appropriate economic balance, financial autonomy and sustainability of the company.
10. To support our professionals by attracting, retaining and encouraging talent.
39 3. OUR MISSION AND COMMITMENTS
G4-24 G4-25 3.2 Our Stakeholders
G4-26 With its stakeholders, Canal de Isabel II ●● Other companies in our sector with which assumes specific commitments on a daily we work, as well as the industry basis, which it considers to be an essential associations in which we actively element of our responsibility as a company. participate (AEAS, AGA, EUREAU and IWA). Our main stakeholders include: ●● Society in general, with special interest in ●● Regulatory bodies: The European Union, certain sectors and agents, including: the Ministry of Agriculture, Food and Environment, the Tagus Hydrographic ●● The school community (teachers and Confederation and the Ministry of Health, students) with whom we interact Social Services and Equality. through the activities of Canal Educa.
●● ●● The Government, the Assembly of the The entities that address the Autonomous Community of Madrid and expectations of our society (NGOs, the parliamentary groups represented in it. foundations and associations).
●● ●● Public shareholders: The Community of The media and opinion makers. Madrid and the 111 town councils that ●● The scientific community and form part of our shareholding. institutions focused on innovation. ●● Customers and users: The town and city ●● Business analysts and experts in our councils of the municipalities we serve, as industry. well as domestic, commercial and industrial customers and users; large ●● Persons in charge of managing our customers such as developments or environment and persons responsible homeowners‘ associations. for its protection and improvement.
●● Business partners: Our company‘s employees, suppliers and contractors.
40 2016 Annual Report Canal de Isabel II
The frequency with which we interact with the different stakeholders is as follows:
CUSTOMERS AND USERS EMPLOYEES
We keep in touch with our customers on an We maintain a permanent relationship with employees through almost daily basis. In addition to the bimonthly personal contact and new technologies. A noteworthy example of delivery of the water bill, we have a very fluid this is the daily update of the Canal&Tú intranet in Canal de Isabel contact through our numerous commercial offices II, which includes all the news affecting the company‘s daily life. In and telephone campaigns. Moreover, we have a addition, regular meetings are held with workers‘ representatives customer satisfaction survey in which we contact through the Works Council or in other thematic forums such as them to find out their opinion about our services. meetings on training or overtime, or of the Occupational Safety and Health Committee.
SUPPLIERS
We also maintain constant and fluid contact with our suppliers. Daily, through their telephone, e-mail and web queries, handling offers, minor orders and complaints through our web SRM system and our SAP ERP, in addition to the direct contact that necessarily takes place with each of the services that work with them. Annually, through the confirmation of balances necessary for the auditing of annual accounts, and also when carrying out the annual satisfaction survey.
SHAREHOLDERS WITH THE REST OF OUR The General Shareholders‘ Meeting is called by the Board of Directors when STAKEHOLDERS deemed convenient for the corporate interests. The Ordinary General (regulators, strategic partners, Shareholders‘ Meeting, previously called for the purpose, meets within the business generators or society at first six months of each financial year to approve, where appropriate, the large), relations are continuous, company‘s management and the accounts for the previous financial year, constant and increasingly intense. and to decide on the distribution of profits.
Our intention is to continue to deepen our relationship with all our To open this participation, in 2016, focus groups and interviews stakeholders, intensifying contact with them. We are convinced that were organised in order to obtain the participants‘ opinion and we will only achieve our goals if we all work in the same direction. expectations regarding the company. The focus groups involved For this reason, one of the characteristics of the reflection process is different types of customers and users, commercial and institutional to draw up plans for the 2018-2030 period, with the participation of customers, Canal employees and suppliers of the company. The our stakeholders in their development, which will define the future interviews were held with the regulators of our activity, consumer of our company. associations, business associations, associations of our sector, environmentalists and technology centres.
41 3. OUR MISSION AND COMMITMENTS
3.3 Communication channels with our stakeholders
In order to promote fluid communication with stakeholders, Canal de Isabel II uses the communication channels at its disposal to understand and respond to society‘s demands and queries with regard to economic, environmental and social aspects.
Map of the most common communication channels used in Canal de Isabel II
COMMUNICATION CHANNEL INTERNAL COMMUNICATION EXTERNAL COMMUNICATION
Personal/ ●● Meetings ●● Corporate headquarters In person ●● Training and awareness raising ●● Commercial customer service offices
●● ●● Leisure and sport activities for Customer service employees and their families ●● Customer ombudsman ●● Organised tours of facilities (open-door days) ●● Educational campaigns (Canal Educa) ●● Recreational and sports areas ●● Participation and sponsorship of conventions, forums and other encounters ●● Fundación Canal activities ●● General Shareholders‘ Meeting ●● Shareholder Office
Telephone, fax, ●● Telephone, fax, ordinary post ●● Customer Service Hotline email ●● Suggestion box ●● Supplier Service Hotline ●● Contact telephone no. for educational initiatives ●● Customer ombudsman ●● Messages on the bill
Internet ●● Corporate Intranet ●● Online Customer Service
●● R&D&i blog ●● Corporate website ●● Transparency portal ●● Shareholder portal ●● Canal Educa website ●● Canal Voluntarios website ●● Fundación Canal website ●● Arte Canal exhibition website ●● Canal on YouTube ●● Instagram ●● Canal de Isabel II App for Android and iOS
42 2016 Annual Report Canal de Isabel II
Map of the most common communication channels used in Canal de Isabel II (cont‘d.)
COMMUNICATION CHANNEL INTERNAL COMMUNICATION EXTERNAL COMMUNICATION
Publications/ ●● Internal reports and memos ●● Sending of personalised information to customers Technical reports ●● In-house magazine for ●● Canal de Isabel II Annual Report employees ●● Corporate publications ●● Fundación Canal publications ●● Canal R&D&i workbooks
Media: TV, press, ●● Press releases radio, etc. ●● Media announcements ●● Online press room ●● Awareness raising campaigns targeting the population (Join the Challenge)
43 AREAS OF ACTION: OUR PERFORMANCE 4 IN 2016 2016 Annual Report Canal de Isabel II
In order to respond to future challenges, in 2017 Canal has defined what it considers should be its areas of strategic action. These areas include:
4.1. Guaranteed supply 4.2. Guaranteeing the to all citizens of quality of the water the Autonomous we supply Community of Madrid
4.3. Guaranteed service 4.4. Environmental quality continuity and energy efficiency
Cooperation with Commitment and 4.5. Autonomous Community 4.6. proximity to the of Madrid municipalities user
Transparency, good Promoting the 4.7. governance and 4.8. talent, commitment commitment to and safety of our society employees
Innovation and Economic sustainability 4.9. development 4.10. and efficiency in internal processes
The following sections describe our performance and progress throughout 2016 in each of the areas of action on which the new Strategic Plan focuses.
45 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016 4.1 Guaranteeing supply: water for all, every day
The main responsibility of Canal de Isabel II is to ensure the current and future supply of water to all our users. To do this, we need to have adequate infrastructures and tools that allow us to manage the resource in an efficient and sustainable way.
One of the main challenges we face is to In the case of the Autonomous Community achieve maximum efficiency and continue of Madrid, we are already suffering from to provide quality and sustainable services some of these risks. This is shown, for over time. As a result of climate change, example, by the reduction of almost 20% situations of resource scarcity and “water (17.63%) in the average contributions of stress” in Spain are likely to become more water to our reservoirs in the last thirty frequent. years compared to the historical average since 1914 (as shown in the graph).
Natural contributions of rivers to Canal reservoirs, 1914-2016 (millions of cubic metres per year)
1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1914 1917 1920 1923 1926 1929 1932 1935 1938 1941 1944 1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Annual input Historical average (768.5) Average over the last 30 years (629.9)
46 2016 Annual Report Canal de Isabel II Guaranteed supply
The published scenarios on the evolution of Canal also has the possibility of obtaining the climate in Spain until 2050 raise fears groundwater through its 78 wells, a Our population supplied in that this situation will worsen in the future. strategic reserve for drought situations. Of the Autonomous Community It will therefore be necessary to make the note in this regard is the construction and of Madrid has increased from required investments and look for the best connection to our networks of Campo de 5.74 million inhabitants in supply alternatives to meet this important Pozos del Guadarrama, which had 28 wells challenge. in 2016. 2002 to 6.25 million in 2016. In spite of shrinking inputs, in the last twelve The Guadarrama River has been used in years Canal has been able to cope with a recent years, transferring water to the large increase in population with the same Valmayor Reservoir by means of the Las reservoir capacity. Our supplied population Nieves weir. We also have the possibility Canal has the possibility has increased from 5.74 million inhabitants of obtaining water from the Sorbe River of obtaining groundwater in 2002 to 6.25 million in 2016, an increase using the El Pozo de los Ramos dam, which through its 78 wells, a of 8.90% in twelve years. connects to the Jarama Canal. strategic reserve for drought Facing this challenge means acting in several We also have the Tagus DWTP, which situations. ways, seeking solutions by means of alternative since 2010 has made the river‘s resources resources, new infrastructures, policies available to the inhabitants of Madrid thanks to promote saving, efficiency in resource to the most advanced technologies. management and extending the supply of regenerated water for compatible uses. All these actions allow us to improve communication between the supply systems of the Autonomous Community of Madrid, improving the flexibility of Resources in addition to the system‘s operation and our ability to reservoirs guarantee water availability for users. In very dry years, as was the case in 2012, In the area of supply, our objective is to have these provide to our system almost 40% more resources that allow us to mitigate the (38.77%) of the resources needed to supply effect of the decrease in natural inputs and, the Autonomous Community. Their input in in addition, to have facilities that allow us 2016, 124.5 million cubic metres, accounted to operate with enough flexibility from the for 24.71% of the total. sources of supply available to us.
One of these resources is our capacity to transfer water from the reservoirs of Picadas and San Juan in the Alberche river, where we have the corresponding concession.
47 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Guaranteed supply
Use of resources in addition to inputs to Canal reservoirs for the 2011-2016 period (millions of cubic metres annually) 185.4 56.0 61.7 54.0 48.9 47.0 35.8 32.1 30.8 22.2 18.1 15.8 14.7 11.9 11.3 12.0 10.8 8.1 8.3 7.4 6.6 4.0 6.9 3.1 3.1 0.0 0.0 0.0 0.0 0.0
2011 2012 2013 2014 2015 2016
Tagus Sorbe (Pozo de los Ramos) Alberche Groundwater Guadarrama (Las Nieves)
New infrastructures to obtain additional resources
However, having this volume of supply including the new Pelayos de la Presa DWTP has meant that we have had to reinforce (Canal‘s 14th) and other supply infrastructures the capacity of strategic infrastructures that have come into service this year, such as: in our system. Highlights of recent years include the doubling of the Valmayor water ●● Connection of the Torrelaguna – Pinilla treatment plant, which came into service systems in 2012, the expansion and improvement ●● Pelayos de la Presa DWTP and reservoirs of the Majadahonda water treatment plant processes and, especially, the construction ●● Zarzalejo Estación deposit of the Second Distribution Ring, better known as the “M-50 water ring”. ●● New Galapagar deposit (Dehesa Vieja)
We continued to make progress in the construction of new infrastructures in 2016,
48 2016 Annual Report Canal de Isabel II Guaranteed supply
NEW PELAYOS DE LA PRESA DWTP
Pelayos de la Presa‘s new Drinking Water Treatment Plant In addition to the new DWTP, 23 kilometres of pipes, a (ETAP) came into service on 4 October 2016 and connects storage tank for treated water and several pumps were several municipalities in the so-called south-west corner of built, with an investment of 17.7 million euros. The Pelayos the Autonomous Community to the region‘s general water de la Presa plant, the most advanced of all those operated supply system. by Canal de Isabel II along with the Tagus plant, occupies a surface area of 5.2 hectares and has a production capacity With its entry into service, our company now has 14 drinking of up to 332 litres per second. It is equipped with advanced water treatment plants. In this way, Canal de Isabel II completes purification systems, such as membranes for ultrafiltration the connection of the entire Autonomous Community to the and activated carbon filters, which provide excellent quality general supply system, after making an overall investment water to the local populations. Canal de Isabel II is currently of 33.9 million euros that guarantees quality supply to the continuing to develop works to further improve the quality municipalities in the area. of supply in the area, with an additional investment of 4 million euros. Specifically, 6.6 kilometres of new pipelines The treatment plant can supply the towns of Pelayos de and a new drinking water deposit are being built in San la Presa, San Martín de Valdeiglesias, Cenicientos, Cadalso Martín de Valdeiglesias, and improvements are being made de los Vidrios and Rozas de Puerto Real, where more than to the existing tanks and pumping stations, both in Pelayos 16,000 people live. The plant, which involved an investment de la Presa and San Martín de Valdeiglesias. of 12.2 million euros, has state-of-the-art water treatment systems.
The entry into service of the water treatment plant completes Canal de Isabel II‘s project to strengthen the supply to this area of the south-western region, which was the only one that did not have an alternative supply in the event of drought because it was not connected to Canal‘s general supply system.
49 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Guaranteed supply
Reuse Plan
Regenerating wastewater for its subsequent regenerated water, with a total surface area of Distribution by uses of regenerated water supplied in 2016 reuse is one of our greatest challenges for 699 hectares, as well as industry (International the future. Thanks to regeneration, we will Paper) and 11 other entities. Thanks to be able to obtain a large volume of water agreements signed with 43 municipalities, for certain uses that are not related to the 218 parks in the region are irrigated with 14.44% supply of water for human consumption, regenerated water (a total of 1,494 hectares). 7.00% 23.02% but which today are an important part of the demand: irrigation of public parks In 2016, we regenerated a total of 12.41 million and gardens, golf courses, street cleaning cubic metres of water for subsequent reuse in and even some industrial uses. By making our plants. As shown in the graph, the figure 24.14% 25.47% greater use of reclaimed water, we are able has decreased slightly with respect to 2015 to reduce the pressure on the resources due to climatic circumstances that reduced stored in our reservoirs, which means a the demand for water. more rational and sustainable management 5.93% We are also making important advances and of the resource. investments in wastewater reuse. Highlights Rest of municipalities Autonomous By the end of 2016, Canal had 23 regeneration in 2016 include watering with reusable Community of Madrid (21) plants in service, 512 kilometres of reuse water in Torres de la Alameda and the Municipality of Madrid green zones networks and 63 regenerated water deposits. reused water supply in Torrejón de Ardoz. Municipality of Madrid street cleaning bays With these infrastructures, 22 municipalities Golf courses (10) and 10 golf courses were served with Official companies and agencies (11) Industry (International Paper)
Monthly consumption of regenerated water (hm3)
2.50
2.00
1.50
1.00
0.50
0 Feb. Mar. April May Jun. Jul. Aug. Sep. Dec.
2014 2015 2016
Water regenerated annually (hm3) 12.89 12.41 11.83 9.08 10.37 9.77 6.82 6.19 6.22
2.02
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
50 2016 Annual Report Canal de Isabel II Guaranteed supply
The fight against fraud The fight against water fraud Canal de Isabel II has a specific area is transferred to other areas of Canal, since is one of our priorities. dedicated to combating fraud. The task of it is understood that this case may fall within detecting fraud involves various phases, its scope, due to its special characteristics. the final result of which is in many cases channelled through complaints brought Throughout 2016, as a result of the work In the last 7 years we have before the Judicial Authority, it being carried out, fraud involving more than reduced network losses by understood that we are faced with activities 6 million cubic metres of water has been almost 70%. that could be included in Chapter VI of detected and almost 325,000 euros have the Criminal Code - “Fraud prevention”.. been collected through proper management. In other cases, preventive conviction of In addition, 935 fraudulent connection non-contracted connections is carried out convictions have been carried out and in order to avoid their illegal use by third 341 contracts have been negotiated and parties; occasionally, the result of the action signed to regularise fraudulent situations.
Efficiency as a priority
Canal de Isabel II‘s strategic priority is to improvement in our breakage rates over the implement internal actions that allow us to past 11 years, with a 62.07% reduction in manage water with the greatest efficiency pipe breaks. This is despite the growth of the in the distribution network, reducing network and the addition of networks from and controlling the leaks registered in new municipalities with poor conservation. distribution and connections, and in breaks. The results of all the efficiency efforts made The policy of renewing and improving the by Canal are reflected in the available data distribution network, which in the last three on the efficiency of Canal‘s network. Thus, years has meant an average renewal of actual losses in adduction and distribution 121 kilometres per year, aims to minimise have been reduced by nearly 70% (69.63%) water losses due to leakage and breakage in the past 7 years. and to reduce damage to third parties due to flooding. The effort that Canal has historically made resulted in a significant
Network breakage rate Hidden losses in the distribution network (percentage of (number of breaks per km of net per year) water derived for consumption per hydrological year)
0.29 0.28 0.23 6.52% 5.65% 0.20 4.92% 0.23 4.97% 0.15 0.15 0.18 0.14 3.69% 3.89% 0.14 0.11 1.98% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
51 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Guaranteed supply
Canal‘s actual losses are significantly lower The self-consumption of water needed to than those published by the National provide the service to Madrid residents Statistics Institute (INE) in 2016, which in throughout the hydrological year 2015/2016 2014 placed the average in Spain at 15.24% was 4.98 million cubic metres, 1.02% of the of the water supplied to the networks. The water derived for consumption by Canal. Autonomous Community of Madrid was the region with the lowest losses (4.59%), almost 70% below average.
Actual losses in drinking water distribution networks 2000-2014 published by the National Statistics Institute in 2016 (in % of water supplied to networks)
22.00% 20.92% 20.00% 18.00% 15.24% 16.00% 13.63% 14.00% 12.00% 10.00% 8.00% 6.00% 4.59% 4.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Spain Average Autonomous Community of Madrid
For more details, visit the following link: Getting everyone involved in efficient and www.sumatealretodelagua.com responsible water use
Taking care of water and giving it the Our communication campaigns are permanent importance it deserves is everyone‘s job. All and their high impact has made it possible to citizens must take constant care of this scarce place Madrid among the regions that have commodity. Our company has more than most reduced water consumption in recent three decades of experience in developing years. communication campaigns for saving water and protecting the environment. These campaigns are recognised by communication professionals and the target audience.
52 2016 Annual Report Canal de Isabel II Guaranteed supply
Change in resource use vs. population supplied (in % compared to 2005, the driest year on record)
8.88% 9.43% 9.61% 9.33% 8.80% 7.55% 8.69% 7.99% 5.56% 2.29% 0.00% 0.59%
-11 points
-9.06% -7 points -10.77% -11.34% -9.32% -12.19% -12.15% -13.95% -18.56% -18.43% -19.12% -19.44%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Population supplied Water rerouted for consumption
You can find more information about our Raising awareness among future generations: educational programmes in the following link: Canal Educa www.canaleduca.com The main objective of the Canal Educa programme in English; if a centre is programme, which celebrated 25 years committed to technology, Canal Educa has a in 2016, is to promote responsible water complete web portal where you can access consumption and transmit environmental a virtual classroom with online activities. If sustainability values. the centre is committed to the sustainability of the planet, the Ecoaudit of water can be To this end, from the outset we have set carried out, in which students, teachers and ourselves the goal of offering schools attractive non-teaching staff work together to improve activities and resources that facilitate the the use of water in the educational area. important task of educating, implementing an action-oriented methodology in which In 2015-2016, a total of 80,242 students students not only learn new content and skills, from all over the Autonomous Community but also acquire fundamental values such as of Madrid participated in our educational solidarity, respect and coexistence. programme.
Our challenge is to get our message across In order to keep abreast of all the activities to more people each year. For this reason, that we propose throughout the course, we year after year, Canal Educa adapts its encourage the educational community to programme of activities and expands its subscribe to the programme newsletter or educational offer. Our most recent additions follow us through our social networks. are languages and digital technology: we offer a large part of our educational
53 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016 4.2 Guaranteeing quality: the best water
The quality of the water that Canal de Isabel II serves Madrid‘s residents is one of the hallmarks of the Autonomous Community of Madrid. Madrid‘s water is considered throughout Spain as being of the highest quality. Thus, for example, bottled water consumption in the region (14.23 litres per inhabitant per year) is 76.68% lower than the Spanish average (58.52 litres per inhabitant).
There are multiple reasons for this quality. thirteen integrated in the Treatment We have an excellent raw material at source Exploitation Area. The determinations (our reservoirs and catchments), with required by Royal Decree 140/2003, of 7 adequate and advanced treatment systems February, which establishes the sanitary and the great effort we make to preserve criteria for the quality of water for human and maintain water quality. consumption, are made at these labs. Canal also manages the quality control of purified Consequently, with the aim of guaranteeing effluents in WWTPs and the quality of water safety, Canal de Isabel II has regenerated water for irrigation of green established a strict monitoring programme areas. from the point of origin of the supply to its delivery to the consumer. In 2016, Canal de Isabel II carried out almost 1.7 million analytical water quality checks Under the water supply monitoring and and analysed more than 11.96 million quality control programme, analyses are samples to ensure the quality of service. carried out in three laboratories integrated This means running more than 4,650 checks in the Water Quality Area and in another per day and almost 23 samples per minute.
54 2016 Annual Report Canal de Isabel II Guaranteeing quality
Controlling water at the source The parameters we measure are chosen specifically for their The control of water at source encompasses environmental conditions for groundwater importance in order to diagnose the two possibilities of available resources, established by the Autonomous Community water quality. Their number is surface water and groundwater. of Madrid. increasing year by year. Surface water monitoring is carried out Surface water intended for the production by means of the limnological study of the of drinking water usually has a high level reservoirs and rivers used for catchment, of quality, with the highest percentage of while groundwater monitoring is aimed surface water collected classified at the In addition to drinking water, at the analytical characterisation of highest quality levels established by current we also control the quality the resource, in compliance with the legislation. of treated effluents and the wastewater we regenerate. Monitoring distributed water
For the surveillance of treated and supply nodes. All of them are equipped distributed water, we use two programmes with sensors that allow a series of chemical based on classical manual sampling: parameters to be measured continuously and the results to be sent in real time to ●● Systematic programme checking the the Main Control Centre (CPC) through the resource on entering and exiting the Channel‘s own communication network. DWTPs, header and regulating tanks, and official sampling points locatedThe parameters that we measure in the throughout the network. EVAs are chosen specifically for their importance with respect to the diagnosis ●● An auxiliary programme without an of water quality. Their number is being established schedule for addressing increased through a multi-year programme. claims and specific studies. The analytical determinations in all the EVAs include chlorine, ammonium, nitrites, pH The manual sampling system is complemented and conductivity. Additionally, total organic by a network of 40 Automated Surveillance carbon, nitrates and turbidity are measured Stations (EVAs), installed at the outlets of in nine of them. DWTPs, large tanks and the most important
Monitoring wastewater and regenerated water
Canal de Isabel II also manages the quality and a metal and solid samples laboratory, an control of tributaries treated in WWTPs and incubation room and a data and microscopy the quality of reclaimed water destined for room, among other facilities. irrigation of green areas and street cleaning. Our surveillance program allows us to maintain Canal de Isabel II has a purified water a permanent alert system through a network laboratory for this purpose. Located in of Automatic Surveillance Stations (EVAs), 85 Majadahonda, it covers a surface area for treated water and 57 for reclaimed water, of more than 2,200 square metres and which we also use for strict control of treated is equipped with a physical-chemical water from its entry into the WWTP until it is laboratory, a microbiology laboratory, an returned to the rivers, and for the control of organic contaminants analysis laboratory water from the reuse networks.
55 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Guaranteeing quality
Compliance with regulations on water for One of the consumption best waters in Spain In 2011, Canal was certified by the National the company and certified, since 1997, Accreditation Body (ENAC) according to according to UNE-EN ISO 9001 and UNE-EN the UNE-EN ISO/IEC 17025 standard for ISO 14001 standards. The lowest the performance of physico-chemical and microbiological analyses, from the Central, Since 2009, Canal has been accredited by the consumption of Majadahonda cold water metres verification bottled water of Poveda (in Arganda) and Griñón laboratories. This certification has been extended by the laboratory (file 278/LE1569), which was all the Autonomous inclusion of new test methods and now subsequently extended to flow metres. Communities. includes in its scope fresh and drinking In 2016, the degree of compliance of the water and reclaimed water. distributed water, in percentage of samples In addition, all of Canal‘s laboratories that meet the norm on total samples and EVAs are included in the scope of analysed for the self-control protocol, was application of the quality and environmental 98.40%. management systems implemented in
Non-carbonated bottled water consumption by Autonomous Community (in litres per inhabitant and year in 2016)
114.41 113.76
73.32 72.15 65.41 61.96 58.52 56.40 55.50 53.35 51.31 50.64 44.79 42.46 31.74 21.71 18.73 14.23 Galicia Murcia Aragon La Rioja Madrid Navarra Asturias Valencia Catalonia Cantabria Andalusia Extremadura Castilla y León Canary Islands Balearic Islands Spain Average Basque Country Castilla La Mancha Source: Ministry of Agriculture, Fisheries, Food and Environment household consumption database (2017)
Collaboration with other entities
Canal de Isabel II actively participates with external entities ●● Associations of Chemists and Pharmacists related to water quality control. In recent years, it has collaborated with: ●● AEAS (Spanish Water Supply and Sanitation Association)
●● ●● The Ministry of Health and Consumer Affairs EUREAU (European Water Suppliers Association)
●● ●● The Department of Health and Consumer Affairs of the FELAB (Association of Testing, Calibration and Analysis Autonomous Community of Madrid Entities)
●● ●● Madrid City Council AEC (Spanish Association for Quality)
56 2016 Annual Report Canal de Isabel II 4.3 Service continuity: A reliable service
Canal must guarantee the security of the service that allows continuous supply and contributes to the well-being of all of Madrid‘s residents. To this end, we must equip ourselves with systems that guarantee the security of our facilities, some of which are critical, as well as our information systems and our personnel.
Guaranteeing the security and safety of facilities and people
In order to ensure the supply of drinking Operational security water to the citizens of the Autonomous Community of Madrid, Canal de Isabel II Canal de Isabel II manages a large number must guarantee the management and of infrastructures that can be considered control of the security of all its facilities. particularly risky, as well as an important heritage that is subject to different security To this end, we coordinate key aspects such pressures. The entry into force of Law 8/2011, as building and facility security services, of 28 April, which establishes new measures self-protection plans, security in large dams, for the protection of critical infrastructures, water fraud control, coordination with the has led to the classification of some of the law enforcement agencies and protection of infrastructures we manage under this new customer-related data. category.
57 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Service continuity
By the end of 2016, there were almost Self-protection of buildings and 400 people working in the area of security facilities at Canal de Isabel II, monitoring our 1,159 different installations throughout the territory In 2016, many actions have been taken in of the Autonomous Community of Madrid. As this direction. These include preventive at 31 December 2016, we had 97 established maintenance of the self-protection systems fixed surveillance posts and 14 external in 50 buildings or the preparation and/or security and safety patrols in place, increasing renewal of 12 Self-Protection Plans. surveillance coverage should the need arise. The implementation of the Self-Protection Also in 2016, the existing coverage Plans is organised on two solid bases: of electronic security systems was training and involvement. To this end, the extended to include closed-circuit television personnel who will be part of the teams are surveillance (an additional 9.45%), intrusion chosen on a voluntary basis, and then all the detection systems and card access control staff is trained. In 2016, 4 Real Fire courses to multiple facilities (22.34% more). Our were given and 30 evacuation drills were closed-circuit television (CCTV) systems held. already manage 533 cameras; many of them perform automated supervision without human intervention, increasing operator efficiency and responsiveness.
58 2016 Annual Report Canal de Isabel II Service continuity
Protection of data related to customers and suppliers
Canal de Isabel II periodically reviews the files ●● Suppliers that process personal data and reports them to the Spanish Data Protection Agency Registry ●● Occupational health, risk prevention and as regulated in Article 14 of Organic Law medical service 15/1999 of 13 December on the Protection of ●● Recruitment of personnel Personal Data. Specifically, Canal has reported the creation of the following data files: ●● Video surveillance
●● Socio-cultural activities and public relations Canal has implemented a system for the improvement of processes related to the ●● Customers protection of personal data in order to ●● Building access control guarantee the privacy of customers and the protection of their personal data in ●● Employees accordance with the applicable regulations, for which reason this aspect has been ●● Recording of calls included as another element in the quality system. ●● Requests for suggestions and complaints
Security of information systems and business In 2016, the following continuity projects in the field of security of our systems The information and communication systems To this end, Canal de Isabel II has drawn up stand out: (equipment, applications, information a series of procedures for information and and telephones) are working resources communication systems with the main rules Implementation of that Canal uses to manage the company‘s to be followed for the safe use of these next-generation firewalls activities. To ensure their correct use, Canal resources. These rules generally seek to for greater control of de Isabel II publishes a series of policies that protect both users of Canal‘s systems and network traffic to corporate establish guidelines and recommendations the company itself against inappropriate information systems. for use to minimise the risks inherent in the or malicious use that may pose a risk inappropriate use of these resources. with respect to the security, availability or Implementation of an performance of the systems or services The corporate objectives of information information system for provided, as well as other aspects of a security and continuity of operations are set legal nature or to improve the efficiency of Business Continuity and out in the Information Security and Business systems, without impairing our operational Alarm Notification and Continuity Policy, through which the capacity in the performance of our work. Management. company acquires the commitment to its protection and supports the implementation Thanks to these policies and procedures, the Implementation of a of the necessary measures to do so. availability of the company‘s critical systems Business Continuity office was 99.95% during 2016 and 99.94% for However, improving the security, availability other critical systems. and continuity of information and the systems that manage it is not only a task of the technical services that manage it, but also requires proper use by all system users.
59 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016 4.4 Environmental quality and energy efficiency: We take care of your environment
The environment is in Canal de Isabel II‘s DNA. As managers of a natural resource that is essential to life and responsible for the purification and proper discharge of nearly 6.5 million people‘s waste into the sewage system, it could not be otherwise. Therefore, the conservation and protection of our environment is part of our mission and is one of our main daily tasks. In the future we want to take a step beyond legal compliance in our commitment to the environment.
For more information about our environmental commitments, visit Environmental management at our website: http://www.canaldeisabelsegunda. Canal de Isabel II es/en/gestionamos/cuidamos/ Management systems Canal de Isabel II develops all its Madrid, as well as wastewater treatment activities taking into account its Quality in the same area except the municipality of and Environment Policy, as well as the Madrid. Occupational Safety and Health (OSH) Policy. In order to guarantee its compliance, the During 2016, Canal has been adapting its Company has implemented and certified quality and environmental systems to the a Quality and Environmental Management new ISO 9001:2015 and ISO 14001:2015 System in accordance with the ISO standards to renew its certification in 2017. 9001:2008 and ISO 14001:2004 standards, Canal monitors the quality systems, and a Management System for Health and centralised waste management, waste Safety at Work in accordance with the BS disposal control and the coordination OHSAS 18001:2007 standard, whose scope of issues related to occupational health includes the collection, treatment, marketing, and safety through specific areas of the distribution and quality control of drinking company‘s management structure. water in the Autonomous Community of
60 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
The Committee on Quality, Environment Health at Work Manual and Prevention Plan, and Health and Safety at Work, as the general procedures, technical instructions Protecting the environment specific body that directs and promotes and standard operating procedures. In 2016, is in Canal de Isabel II‘s DNA. management systems, is responsible for changes have been made to 101 System This could not be otherwise. coordinating and taking decisions on these documents. aspects (Quality, Environment and Health and Safety). It is chaired by the CEO and In 2016, planned internal audits have been includes all the company‘s management. carried out in different areas, specifically 46 in organisational units and 21 in We strictly apply the principle The document base of the Management facilities. The results of the internal audits of prevention: the best way System, at 31 December 2016, consisted of demonstrate the effectiveness of the to correct an environmental 597 documents including the Quality and management system implemented and its Environment Manual and the Safety and capacity to identify areas for improvement. impact is to prevent it from occurring.
Result of the audits carried out on management systems each year
85 88 86
60 54 Deviations 42 Observations Opportunities for improvement 15 7
2014 2015 2016
61 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
Prevention at the source of adverse environmental impacts Canal de Isabel II incorporates the principle impact is to prevent it from occurring”), of prevention into its operating philosophy with an approach based on analysing the (”the best way to correct an environmental life cycle of our processes and activities.
Main actions implemented by Canal de Isabel II for the prevention and reduction of environmental impacts
Processes/ Actions to prevent environmental impacts facilities
Evaluation of environmental aspects in planning and projects Conducting environmental impact studies
Environmental protection clauses in tender documents Projects and works Adoption of preventive, protective and corrective measures Monitoring and surveillance of environmental aspects on site and subsequently Correction and mitigation of environmental impacts Reservoir protection plans Monitoring of the ecological quality of the reservoir environment Reservoirs Dam emergency plans Maintenance of ecological flows
Wells Sustainable exploitation of groundwater resources Efficiency in the handling and reduction of rejections and losses DWTP deposits and Continuous quality monitoring networks Sectorisation and network pressure control plan Renovation of networks Distribution Unbilled water reduction plan network New technologies in networks plan
Improvement of purification systems Implementation of the National Water Quality Plan Discharge of excess reclaimed water from tertiary courses to the channels WWTP and EWTS Monitoring of discharges Sludge reuse with cogeneration Regenerated wastewater reuse plan Electric power generation from biogas
Sensible use communication campaigns Virtual office and e-invoicing Management Environmental education (Canal Educa) Sales and support process Paper and energy saving plans in offices Energy Improvement Plan Fleet of low-emission, hybrid and electric vehicles
62 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
Our environmental management system (notably, Law 21/2013, of 9 December, on contemplates the principle of continuous environmental assessment). In addition All drafts are evaluated improvement of our performance, and to the aspects of the natural and physical according to the includes among its objectives the environment, these assessments analyse Environmental Impact prevention and minimisation of pollution, the social and economic aspects and, if the commitment to comply with necessary, any significant impacts on local Assessment legislation. applicable environmental legislation and communities. the monitoring and control of significant environmental aspects. In 2016, a total of 9 projects from the Sanitation and Treatment, Supply and We have formalised All the projects drafted at Canal de Isabel Building areas were submitted for procedures for II are evaluated in accordance with the environmental impact assessment. In provisions of Law 2/2002 on Environmental addition, this year a positive environmental communicating with Assessment of the Autonomous Community impact statement was obtained for 2 actions. our stakeholders on of Madrid and other applicable legislation environmental issues.
Prevention and communication about environmental aspects of our operations
The prevention of potentially negative In the case of the execution of projects environmental effects of Canal‘s operations subject to the administrative environmental and facilities is integrated into internal impact assessment procedure, there are procedures and instructions for their always bilateral communications between identification, analysis and evaluation and the Autonomous Community administration for their monitoring and control. responsible for the environment and our company, with a view to requesting and The centralised management of the providing sufficient documentation for the company‘s waste and the control correct definition of the works we carry of its emissions is carried out by the out and the impacts they cause. In addition, Environmental Management Subdivision, other entities with the potential to be while the control of discharges and the affected are also consulted. quality of wastewater treatment plant effluents is the responsibility of the Water Furthermore, within the framework Quality Department. In addition, channels of of management systems, there are communication have been established with documented internal procedures related internal and external stakeholders. to environmental communications from stakeholders.
Types of environmental information queries received by Canal in the last three years
18 18 18 17 15
7 6 6 6 5 4 3 3 2 2 2 2 2 1 1
Discharge Noise Works Odours Waste Storage Condition Water Ecological Impact on Other of management of materials of consumption flow flora and wastewater and waste reservoirs fauna
4 2 5
63 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
Expenditure and investment in environmental management and activities Distribution of voluntary environmental expenditure for Apart from the environmental expenses Given the intrinsically environmental nature the 2014-2016 period linked to the fulfilment of our legal of many of our processes (we manage a obligations (waste management, sludge natural resource and deal with wastewater management, etc.) or associated with the treatment), many of our investments have 3.24% processes necessary for the management of an environmental protection objective. Thus, the integral water cycle (waste management, in 2016, the investments made by Canal de sludge management, etc.), Canal dedicates Isabel II with a final environmental objective 5.07% 33.97% other economic resources to voluntary amounted to 30.25 million euros (16.12% 40.73% aspects of environmental management. of the total investments made by Canal). These resources amounted to 4.43 million In the 2014-2016 period, environmental euros (excluding associated revenues) investments made by the company in 2016 and represent 2.04% of the total amounted to 74.15 million euros. 16.98% expenditure associated with environmental management (a total of 216.81 million euros in 2016).
Thermal sludge drying The main items of voluntary expenditure Reuse include the maintenance of green areas and Maintenance of green areas reforestation (40.73%) and the maintenance and reforestation of landscaped areas and thermal drying of Expenditure on environmental education programmes sewage sludge (33.97%). Other voluntary environmental expenses Our environmental performance
Canal manages all its facilities in accordance with sustainable criteria, seeks to rationalise the consumption of materials and energy, avoids discharges and emissions into the atmosphere and manages its waste appropriately, periodically controlling the noise and odours produced by its activities.
Use of reagents The main materials that Canal consumes In 2016, total reagent consumption was are the reagents used in drinking water 64,493 tonnes. Of these, 27,369 tonnes treatment plants (DWTPs) and wastewater were destined for drinking water treatment; treatment plants (WWTPs). in addition, 37,124 tonnes have been consumed in wastewater treatment.
Type of reagents consumed in DWTPs Types of reagents consumed in WWTPs in 2016 0.47% 7.51% 2.83%
Chlorine Lime Alumina sulphate Ferrous chloride 18.41% Calcium hydroxide Polyelectrolyte 8.96% Polychlorinated alumina Activated carbon dust 0.59% Sodium hypochlorite 4.90% 50.95% Other reagents (15 types) 96.70% 8.68%
64 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
Paper consumption In 2016, the direct consumption of energy from different sources for Canal‘s facilities We are a major consumer and operations was 2,115,608 gigajoules, of electric power. For this In administrative and commercial 71.41% of which corresponded to electric management activities, the main material power consumption. reason, in recent years we consumption recorded is paper. have advanced electricity Data from 2016 indicate that electric power generation taking advantage In these activities, 64.17% of the 26.99 tonnes consumption was 1.70% higher than in of paper used in 2016 was recycled. Canal 2015 and 9.60% higher than in 2014. This of the synergy of processes has the firm objective of reducing paper with water management. increase is mainly due to the increased use consumption in internal administrative tasks of the Alberche (Picadas and San Juan) river and has managed to reduce its consumption lifts, which was 15.77%% higher than in by 16.41% between 2014 and 2016. 2015 and 170.50% higher than in 2014. In terms of consumption related to commercial management, 2016 has remained at similar levels to previous years, although the 32.13 tonnes consumed are 7.27% less than those consumed in 2015. In addition, the printed documents have been Percentage distribution of energy consumption in 2016 produced through a service provider that is FSC (Forest Stewardship Council) certified to ensure the use of paper produced through responsible forest management. 26.95% Power consumption 0.53% Canal de Isabel II needs to consume a 71.35% great deal of energy to carry out all its 1.18% processes. This energy comes from various sources, but is mainly electrical. Therefore, as we are aware of the importance of such Electric power consumption, in recent years initiatives Vehicle fuels have been developed for the generation Heating fuels and processes of electric energy through synergistic Natural gas thermal drying of sludge processes with water management. Thus, by year-end 2016, we were the company with the greatest installed power in Percentage of electric power electricity generation in the Autonomous consumption by integral water cycle Community of Madrid, with a total of 81.56 activity in 2016 megawatts. 1.71% 8.49%
21.12%
4.17% 60.49% 2.19%
1.83%
Wastewater purification Reuse of generated wastewater Thermal drying and composting of DWTP sludge Other: telecommunications, offices and warehouses Adduction (drawing and purification) Distribution of drinking water Sewage system
65 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
The biggest electric power energy In terms of specific consumption, data consumers in 2016 were the WWTPs, which vary greatly depending on the rainfall Our electricity consumption account for 60.49% of the total, followed characteristics of the year. Thus, when is greatly conditioned by by the drinking water lifts (mainly the two river flows are very low, it is necessary to weather conditions. In very mentioned in the Alberche river), which use well fields and to make greater use of dry years it can double and represent 18.40% of the total 21.12% of elevators, with which energy consumption adduction and purification. almost doubles. The specific consumption even almost triple. recorded in recent years is as follows:
Specific consumption recorded in recent years
0.605 0.577 0.550 0.549 0.543 0.565 0.550 0.435 0.431 0.418 0.384
0.284 0.239 0.253 0.186
2012 2013 2014 2015 2016
Specific consumption - supply (kWh per 3m rerouted for consumption) Specific consumption - sanitation and reuse (kWh per 3m purified or regenerated) Specific consumption - total company (kWh per 3m managed)
Water consumption Apart from the water that we distribute the water rerouted for consumption in the as part of the supply processes, the water same period. consumption registered for the realisation of our processes (i.e. self-consumption) Self-consumption has been reduced by has amounted to 5.02 cubic hectometres 7.81% with respect to self-consumption for of water in the 2015-2016 hydrological the 2014-2015 hydrological year, which year. This figure corresponds to1.03% of was 5.44 million cubic metres of water.
Canal‘s internal water consumption sources in 2016
0.94% 0.83% Canal de Isabel II facilities 2.51% 39.23% Flushing Commissioning of new or existing facilities 13.00% Cleaning of tanks and regulating infrastructures Consumed in DWTP processes Other consumption (cleaning pipes and recesses) 43.49%
66 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
Atmospheric emissions Wastewater treatment The emissions of greenhouse gases, Nearly all the wastewater from the Distribution of Canal air emissions acidifying substances and tropospheric population of the urban centres of the (except CO2) in 2016 (tonnes/ percentage of total) ozone precursors into the atmosphere that Autonomous Community of Madrid, can be attributed to Canal‘s operations including Madrid, is treated by Canal de come from: Isabel II. For this purpose, we have 157 facilities that allow us to treat these waters 1.18/0.43% ●● Indirect emissions originating in the from a total of 179 municipalities. 6.05/2.22% generation of electricity that we consume 3.05/1.12% from the grid. These emissions depend, in In 2016, these plants have treated 487.27 addition to consumption, on the million cubic metres of wastewater, 77.56/ generation scheme of the electricity equivalent to 99.24% of the water rerouted 28.49% system in the Iberian Peninsula. for consumption. The quality of the effluents treated in the plants managed ●● Emissions associated with the composting by Canal maintains the high standard that processes of sludge from our WWTPs. characterises the system. 175.70/ 64.54% ●● Direct emissions from existing combustion The wastewater treatment plants are located plants in Canal‘s facilities, particularly in the basins of different rivers across the those from the UTL in Loeches. 8.69/3.19% Autonomous Community: Alberche, Aulencia, Cofio, Guadalix, Guadarrama, Guatén, ●● Exhaust gas emissions from our 682 Henares, Jarama, Lozoya, Manzanares, Methane vehicles and machines, which in 2016 Nitrous oxide (N O) Perales, Tagus and Tajuña. However, not 2 have covered a total of 10 million all of them carry out each of the possible Nitrogen oxides (NOx) kilometres, as well as diesel used in some purification processes, but rather they are Sulphur dioxide processes. Carbon monoxide adapted according to factors such as the size Volatile organic compounds or number of inhabitants for which they are (non-methane) designed, economic imperatives, seasonal variations in river flows, wastewater origin or possible industrial discharges. The type of processes used in purification determines even the physical aspect of the installations.
Purification efficiency (percentage of pollutant load removed)
97.03% 97.33% 95.85% 95.76% 92.66% 92.73% 91.11% 91.32%
61.48% 53.36%
DBO5 Suspended solids COD Phosphorus Nitrogen
2015 2016
67 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
Location of Canal‘s WWTPs in the Autonomous Community of Madrid Our WWTPs are designed according to factors such as the number of inhabitants they serve, seasonal variations in river flows, the origin of wastewater or possible industrial discharges.
Canal‘s WWTPs have a design capacity of 17.57 Since 2015, Canal has been developing its million equivalent inhabitants and can treat a Plan for complying with WWTP discharge daily flow of up to 3.23 million cubic metres. authorisations, aiming to ensure compliance with at least 80% of the samples taken for In order to ensure compliance with self-monitoring in drinking water treatment phosphorus removal requirements, we plants, as well as carrying out comprehensive have made the necessary adaptations to the monitoring of the entire WWTP in order to treatment plants included in our Nutrient reduce non-compliance to a minimum. The Elimination Plan (nitrogen and phosphorus) main actions envisaged are as follows: from 2010 to the present day. The objective of this Plan is to comply with the Water ●● Study of the discharges that reach the Framework Directive as regards water WWTPs. discharge conditions in sensitive areas ●● Modification, extension or new (almost the entire Community), which is construction of WWTPs. included in the National Water Quality Plan. ●● Reduction of relief flows in dry weather.
●● Various operational improvements.
68 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
In this regard, in 2016, the expansion of samples complying with these standards of the Miraflores de la Sierra WWTP, the improved by 10.78% compared to the total Given our location at the technological improvement and treatment number of samples taken at the WWTP. headwaters of the Tagus Basin, capacity of the El Molar Sur WWTP, and the almost the entire territory of expansion of the Galapagar-Torrelodones Canal‘s activities do not produce any discharge of chemical substances in the the Autonomous Community WWTP and the Villarejo de Salvanés WWTP are noteworthy. normal operation of the facilities. Thus, of Madrid is considered a throughout 2016, there has also been no sensitive area in the National As a result of this commitment, the compliance significant incident in this regard. Water Quality Plan. rate of our treatment plants improves every year. Between 2013 and 2016, the number
WTP compliance (percentage of samples in compliance out of total samples)
90.20% 87.49% 84.91%
81.42%
2013 2014 2015 2016
Waste management The control of waste management at In recent years, Canal has been working Canal‘s production centres and assembly actively on the proper management of points is based on the correct separation non-hazardous waste with the aim of of waste at source and is complemented increasing the amount destined for reuse or by the monitoring of the collection routes, recovery. scheduled fortnightly and carried out by the managers, ensuring compliance with In 2016, a total of 32,099 tonnes of current legislation. non-hazardous waste were generated and
Final destination of non-hazardous waste produced in Final destination of hazardous waste produced in 2016 2016, except pre-treatment WWTP and WWPS waste (tonnes/percentage of the total) (tonnes/percentage of total)
144.01/ 7.57% 527.01/ Reuse 81.45/ Reuse 405.16/ 27.71% Recycling 29.63% Recycling 21.31% Composting Dumpsite/landfill Dumpsite/landfill
10.86/ 825.44/ 182.55/ 3.95% 43.41% 66.42%
69 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
managed, including 30,198 tonnes of Management of noise and odours Final destination of WWTP sludge pre-treatment waste from the WWTPs and in 2016 (tonnes of dry matter/ percentage) WWPS‘s (94.07% of them). Also noteworthy During 2004, Canal implemented a are construction and demolition waste (465 programme to control noise levels 631/1.46% tonnes) and waste from drinking water generated by our facilities that may filtration sand (514 tonnes). 75.6 tonnes of disturb the population or in areas of 201/0.46% paper and cardboard and 405 tonnes of special sensitivity. In 2016, the number of vegetable waste have also been managed controlled installations has increased to 234, 8,890/ and used in the Loeches WWTP sludge with a degree of compliance of over 97.9% 20.53% composting and thermal drying plant with according to the criteria established in the co-generation as a structuring material for company‘s internal regulations. 4,387/ composting. 10.13% The emissions of odoriferous substances 29,196/ With regard to hazardous waste, 274.85 from wastewater treatment plants are 67.42% tonnes were generated in 2016. These include controlled within the framework of the 86.27 tonnes of laboratory waste (29.56%) air emissions control programme and the and 81.45 tonnes of motor oils and lubricants regulatory inspections included in the Agricultural application (29.63%). legislation in force. In 2016, the programme Composting included 139 control points and only one Thermal drying In addition to the hazardous and non-compliance was detected throughout Dumpsite/landfill non-hazardous waste associated with our the year. Ceramic recovery processes, of note in terms of volume are the sludge generated in the production of drinking water from the DWTPs (a total of 26,636 tonnes), and the sludge generated in Compliance with environmental the treatment of wastewater at the WWTPs Final destination of DWTP sludge laws in 2016 (tonnes of dry matter/ (186,839 tonnes) (not counting the sludge percentage) from the Madrid City Council‘s treatment plants, which are managed by the City Canal de Isabel II has procedures for the Council). identification and access to the requirements 310/6.28% established in the environmental laws and The final destination for dewatered sludge for the periodic evaluation of its compliance from WWTPs is, for the most part, for use within the framework of the implemented in agriculture. However, those that due and certified environmental management to their characteristics cannot be used for system. agricultural purposes (1.92% of the total WWTP sludge) are destined, on the one In 2016, only 25 sanctions proceedings hand, to energy recovery in cement plants, were opened by the Tagus Hydrographic 4,620/93.72% using their calorific value as a light fuel to Confederation, the vast majority of which are replace fossil fuels and, to a lesser extent, linked to involuntary discharges of wastewater to landfill. In 2016, a total of 8,890 tonnes from our 157 WWTPs. These proceedings are at different stages of processing; most of them Agricultural application following treatment of dewatered sludge were processed in the Loeches Sludge Treatment Unit. have been appealed through administrative Dumpsite/landfill channels or even through the filing of the corresponding contentious-administrative proceedings. The cumulative amount of the penalties associated with these cases amounted to 408,270 euros at year-end 2016. As a result of the claims and appeals filed by Canal in relation to proceedings initiated in previous years regarding environmental breaches, a total of 123,600 euros has been saved.
70 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
Energy efficiency and climate change
Most experts agree on the importance that the effects of climate change can have on the potential change in the distribution of water resources globally.
Canal de Isabel II cannot be unaware of this concern about the future sustainability of our supply model and, for this reason, we are working both in the area of mitigation and adaptation to be prepared to face the adverse effects that climate change may cause. Our greenhouse gas emissions (GGEs)
In 2016, according to estimates, greenhouse ●● Indirect emissions, associated with gas (GHG) emissions amounted to 191.33 supplies and services provided by third
kilotons of CO2 equivalent. This represents a parties (scope 3), such as waste transport, Contribution of individual 6.26% reduction in our total GHG emissions reagent consumption and paper outbreaks to greenhouse gas compared to 2015 and is mainly due to a consumption. They accounted for 28.04% emissions during the period 2014-2016 reduction in emissions associated with grid of our emissions in 2016 and include electricity consumption (16.58% compared emissions associated with commuting by 2.17% to 2015), driven by a higher degree of Canal employees from their homes to the electricity self-sufficiency (62.35%), and to company‘s workplaces. 0.28% a reduction in the average emission factor 7.58% of the Iberian Peninsula‘s electricity system In terms of specific emissions in 2016, 0.191 30.98% with respect to 2015. kilograms of CO2 equivalent were recorded 1 19.39% for each cubic metre managed . This As far as the origin of our emissions represents a 10.61% decrease in specific is concerned, three scopes can be emissions compared to the previous year. distinguished: 36.80% Electricity consumption is one of the main ● 2.81% ● Direct emissions, originating from Canal sources of emissions of this type of gas by processes and/or facilities (scope 1), Canal. In dry years, which require higher accounted for 37.67% of the total in 2016. electricity consumption to ensure adequate Direct combustion emissions (scope 1) These include our main combustion supply, emissions may almost double (as Other direct emissions, including activities: the cogeneration in the Loeches they did in 2012). For this reason, Canal vehicles (scope 1) UTL, the composting processes of sludge focuses its efforts to reduce emissions on Emissions associated with electricity or those associated with emissions from the generation of clean energy and the consumption (scope 2) the company‘s 682 vehicles. search for energy efficiency. Emissions from agricultural use of sludge from WWTPs (scope 3) ●● Indirect emissions, associated with Canal‘s Emissions associated with waste electricity consumption (scope 2), transport services (scope 3) accounted for 34.29% of the total in 2016. Emissions associated with the consumption Their calculation is based on the average of WWTP and DWTP reagents (scope 3) emission per kilowatt hour produced by Other indirect emissions (scope 3) the peninsular electricity system (219
grams of CO2 equivalent per kWh in 2016).
1 Sum of the water rerouted for consumption, the water purified in WWTPs and the water regenerated for reuse throughout the year.
71 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
Generation of clean energy
Canal de Isabel II has facilities that, ●● 2 WWTPs with photovoltaic solar panels, synergistically with the supply and sanitation with a total installed power of 0.33 processes, generate renewable energy, use megawatts. energy by-products from processes and cogenerate electricity. As a result, Canal de Isabel II is currently the company with the largest installed capacity At the end of 2016, Canal and its Business for the production of electricity in the Group managed the following electricity Autonomous Community of Madrid, with a production facilities: total of 81.56 megawatts.
●● 8 hydroelectric power plants, with a total Thanks to the energy generated in processes installed capacity of 34.85 megawatts, associated with both supply and sanitation, managed by Hidráulica Santillana, a Canal has a high degree of electrical Grupo Canal company. self-supply. In 2016 the electricity generated, ●● 13 WWTPs equipped with 261.41 million kilowatts, is equal to 62.35% motor-generators using the biogas of its total consumption. Of this amount, produced in purification processes, with a 46.04% was used for self-consumption in total installed power of 25.44 megawatts. our facilities and 53.96% was transferred to the grid. ●● 1 cogeneration plant, associated with the thermal drying process of WWTP sludge, The generation of electric energy by with an installed power of 19.90 megawatts. Canal has managed to avoid the emission of 57,249 tonnes of CO in 2016, which ●● 3 small wastewater falls in the Sur and La 2 represents 87.25% of the emissions from Gavia WWTPs that take advantage of the Canal‘s own electric power consumption difference in level at the dumping point with and 29.92% of our total emissions of these an installed power of 0.26 megawatts. gases. ●● 8 microturbines installed in different points of the supply network with a total installed power of 0.78 megawatts.
2014 2015 2016 Production: 248.9 GWh Production: 243.3 GWh Production: 261.4 GWh Consumption: 384.1 GWh Consumption: 412.3 GWh Consumption: 419.3 GWh % Self-production: 64.8% % Self-production: 59.2% % Self-production: 62.3% 35,000 120.00%
30,000 100.00% 25,000 80.00% 20,000 60.00% 15,000 40.00% 10,000 Production in MWh/month Production 5,000 20.00% Percentage of self-production Percentage 0 0.00% Jul-14 Jul-15 Jul-16 Jan-14 Jan-15 Jan-16 Jun-14 Jun-15 Jun-16 Oct-14 Oct-15 Oct-16 Apr-14 Apr-15 Apr-16 Feb-14 Feb-15 Feb-16 Sep-14 Sep-15 Sep-16 Dec-14 Dec-15 Dec-16 Nov-14 Nov-15 Nov-16 Mar-14 Mar-15 Mar-16 Aug-14 Aug-15 Aug-16 May-14 May-15 May-16
Cogeneration (UTL Loeches) WWTP biogas Other (microturbines, WWTP water falls and photovoltaic) Hydroelectric (Hidráulica Santillana) % self-production
72 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
Actions to reduce emissions
In addition to generating electricity, Canal Sustainable mobility has made significant efforts in recent
years to reduce greenhouse gas emissions, Canal promotes low CO2 emission rates in its including: vehicle contracting tenders. One of the most important factors for awarding contracts are
Raising awareness to reduce these CO2 emission rates, with vehicles with water consumption and the lowest index being assessed positively. rationalise water use The lower consumption of vehicles and the possibility of using biofuels are also Efforts to raise awareness about the particularly valued in these processes. efficiency and sensible use of water have Since 2011, we have had hybrid and electric a direct impact on saving GHG emissions. vehicles in our fleet. In 2016 there were 24 Thus, the greatest reduction in emissions hybrids and 5 electric vehicles (equivalent to is directly related to the reduction of water 4.64% of the light vehicle fleet). These two consumption by our customers and users. types of vehicles have covered a total of Compared to the consumption pattern 353,361 kilometres, avoiding the emission
of the last dry year (2012), consumption of 38.54 tonnes of CO2 equivalent in 2016. between 2014 and 2016 was 92.35 million cubic metres less; this means that the Search for energy efficiency emission of approximately 16,000 tonnes of Since 2010, various plans have been CO equivalent has been avoided. 2 developed for energy improvement in Canal. Reforestation Actions They seek efficiency in energy management from an integral point of view (operational, In 2016 Canal planted 3,629 trees and 259 technological, economic and environmental), shrubs on degraded land. The development promoting coordination between the of new plantations is a means for carbon different areas of the company. Highlights sequestration, a useful short-term in 2016 include an overall company-wide response to global warming caused by energy efficiency audit, five in-depth energy the accumulation of carbon dioxide in the efficiency audits of specific installations, and atmosphere. the commissioning of the new turbine at the Torrelaguna Minicentral and biogas engines Promoting the use of public at the Alcalá Oeste WWTP and Torrejón de transport Ardoz WWTP.
Canal finances 75% of the amount of the Transport Pass in the Automonous Community of Madrid for all employees who request it, thus promoting the use of public transport in the workforce.
73 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Environmental quality and energy efficiency
Managing biodiversity
Supply system managed by Canal, Presence in protected spaces see in this link: http://www.madrid.org/cs/ Satellite?c=CM_InfPractica_FA&cid=1 The situation of our reservoirs in the middle Thus, for example, in the Catalogue of 109168010135&language=es&pagena and upper basins of the rivers and in places Reservoirs and Wetlands of the Autonomous me=ComunidadMadridpor that were originally sparsely frequented has Community of Madrid, drawn up in ciento2FEstructura boosted the local ecosystems associated accordance with Law 7/1990, among the with water and has welcomed, as far as bird reservoirs selected according to their values life is concerned, the emigration of species and characteristics, 9 are included in the that have been displaced by the progressive Canal-managed supply system. pressure on wetlands. For this reason, our reservoirs and their surroundings have The surface area occupied by Canal-managed developed peculiar and very interesting facilities and infrastructure on land subject to ecosystems that have coexisted with the some form of legal protection amounted to farming and livestock activities of the Sierra. 6,414 hectares in 2016. It represents 57.8% These ecosystems play an important role of the total area occupied by Canal facilities, in modulating climatic conditions and the 12.34% of which were Special Protection hydrological cycle, not to mention other Areas for Birds (ZEPA), 75.49% were Sites values such as landscape and socio-cultural of Community Importance (SIC) under the values. European Union‘s Habitats Directive, and 12.18% were other protected areas.
Distribution of the area occupied by Canal facilities in protected areas in 2016 (hectares/percentage of total)
891/ 903/ 12.18% 12.34%
Special Protection Area for Birds (ZEPA) Site of Community Importance Other types of protected spaces
5,523/ 75.49%
74 2016 Annual Report Canal de Isabel II Environmental quality and energy efficiency
Protected species present
In the vicinity of the Canal‘s facilities there are high-value According to the Regional Catalogue of Plant Specimens and plant species that are included in the Regional Catalogue of Singular Stands of the Region of Madrid, there are 3 unique Threatened Species of Wild Fauna and Flora. These include: trees specimens located on land owned by the Company, Ilex aquifolium (Holly), Taxus baccata (Taxus), Arbutus unedo which are: (Strawberry Tree), Corylus avellana (Hazelnut Tree), Fraxinus excelsior (Common Ash), Ulmus glabra (Wych Elm), Betula ●● In the category of notable trees: a specimen of Morus alba (Silver Birch), Sorbus aria (Whitebeam), Sorbus aucuparia alba (Valdehondillo mulberry tree), in El Vellón. (Rowan or Mountain-Ash), Fagus sylvatica (Beech), Quercus ●● In the category of outstanding trees: two specimens. suber (Cork Oak) and Viburnum opulus (Guelder-Rose). One Avies numidica (Algeria fir) and one Cedrus deodara (Deodar Cedar) in the gardens of Santa Lucía in Torrelaguna.
Plant heritage conservation Ecological flows
Canal de Isabel II annually carries out a series of With the approval of Royal Decree 270/2014 of 11 April conservation and improvement works on the green areas 2004 on the Hydrological Plan for the Spanish part of the in order to achieve an optimum level of maintenance of Tagus River basin area, the environmental flows of the the extensive plant heritage, both of the areas included following bodies of water were set in the new plan for in its facilities and of the areas open to the public for use 2015: Jarama River downstream of the El Vado dam, Lozoya and enjoyment, such as the Tercer Depósito Leisure and River from the reservoir of El Atazar to the Jarama River and Sports Centre, the Plaza de Castilla Park, the Riosequillo Manzanares River from the reservoir of Santillana to the Recreational Area, the Valmayor yacht club, the Cervera reservoir of El Pardo. For the rest of the river sections, an de Buitrago marina, and other areas of great richness and environmental demand is established as a guideline. diversity located in enclaves of high ecological value. During 2016, the environmental discharges into the rivers Brush was cleared on a total of 520.21 hectares in 2016 carried out by Canal de Isabel II for the conservation of for fire prevention purposes. In addition, throughout the river sections involved a total volume of 75.60 million the year, the necessary phytosanitary treatments were cubic metres. undertaken to prevent pests and plant diseases on a total area of more than 337.10 hectares, with the application of low-environmental-impact chemical products. Additionally, the elimination of potentially harmful invertebrates is promoted by installing “nest boxes” or “nests” of insectivorous birds.
In addition, throughout 2016 the vegetation conservation of 425.38 hectares annexed to our facilities was maintained and reforestation work was carried out, planting a total of 18,358 units of plants, trees and shrubs.
75 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016 4.5 Municipal cooperation:
Building our region
Canal de Isabel II‘s management model, in the segments of drinking water distribution and sewerage, which are municipally owned, is based on long-term agreements signed with municipalities for the operation of such infrastructures. The assumption of these activities under a supramunicipal perspective generates economies of scale and synergies in the operation, which represent important advantages for municipalities.
The supply networks, which were the origin our management, present great needs and of Canal more than a century and a half ago, require specific plans and an additional are currently managed with excellent results. effort to reach the right conditions and, However, municipal sewerage networks, thus, prevent incidents that affect citizens most of which have recently fallen under and the environment.
76 2016 Annual Report Canal de Isabel II Municipal cooperation
Our relations with the municipalities of the Autonomous Community of Madrid
The relationship with the municipalities is With regard to sanitation services, at the a matter of special importance for Canal de end of 2016 Canal managed the sewerage Isabel II, as it facilitates the provision of an system for 134 towns in the Autonomous efficient and quality service to all citizens. For Community of Madrid, with a total this reason, throughout 2016, Canal de Isabel population of 5,498,097 inhabitants, which II held 164 meetings with 95 municipalities means that it has provided this service to in the Autonomous Community of Madrid. 85.02% of the region‘s population. In water purification, Canal has served 6,458,497 To provide different types of services, Canal inhabitants in 179 municipalities, practically establishes management agreements 100% of the region‘s population (99.87%). and other types of agreements with municipalities and large customers. All In addition, by late 2016 the Canal system agreements and commitments are supplied water to seven bordering negotiated and signed individually with municipalities belonging to Castilla-La each municipality. Mancha (Valdesotos, Valdepeñas de la Sierra, Tortuero, Uceda, Pióz, Pozo de Through these agreements, Canal supplied Guadalajara and Ontígola). The population water in 2016 to a total population supplied in the bordering municipalities of 6,245,119 inhabitants in 173 of the in 2016 is 11,793 people. In the case of 179 municipalities of the Autonomous Ontígola (Toledo), Canal has also provided Community of Madrid. This population wastewater treatment services to its 4,250 equals 96.57% of the population registered inhabitants. in the region on 1 January 2016.
SERVICES PROVIDED BY CANAL DE ISABEL II IN THE Supply Sewage system Purification AUTONOMOUS COMMUNITY OF MADRID
Number of municipalities served 173 134 179
Population served 6,245,119 5,498,097 6,458,497
Coverage in the Autonomous Community of Madrid 96.57% 85.02% 99.87%
Distribution by number of inhabitants of the 179 municipalities in which a service is provided in the Autonomous Community Madrid
52
31 28 29
19
10 8 2
Less than From 500 From 1,000 From 5,000 From 10,000 From 50,000 From 100,000 More than 500 inhab. to 1,000 to 5,000 to 10,000 to 50,000 to 100,000 to 200,000 200,000 inhab. inhab. inhab. inhab. inhab. inhab. inhab.
77 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Municipal cooperation
The most common type of agreement the municipal distribution network; this signed by Canal with the municipalities of includes the renovation of the distribution ●● Three supplementary quota agreements the Community is the Integral Supply networks, to which an additional distribution for the execution of works with Algete, Management Agreement. Through this fee, paid by the end-customers, is applied. Navalcarnero and Navas del Rey. agreement, Canal performs the maintenance, ● operation and renovation of the distribution As mentioned earlier, there are 134 ● Three agreements for the execution network, with the assignment of networks agreements with municipalities to provide of hydraulic infrastructures with Paracuellos de Jarama, Torrelodones to the general supply system of the the sewerage service, so our company and Villalbilla. Autonomous Community of Madrid. There maintains and operates these municipal are also other types of agreements such as sewerage networks. ●● A Debt Cancellation Agreement with the Commercial Management agreements, Becerril de la Sierra. in which Canal performs this management Apart from the management agreements, (contracting, metering, invoicing and Canal also signs other agreements with ●● A certificate of implementation of the collection management), as well as the the town halls covering specific issues. In Adduction service with Villamanta. adaptation and maintenance of connections. 2016, 11 new agreements were signed ●● Three agreements with residential with 10 municipalities in the Autonomous Through technical-commercial supply estates and town halls in Algete, El agreements, Canal maintains and operates Community of Madrid: Boalo and Los Molinos.
Map of the types of agreements with Canal de Isabel II in the municipalities of the Autonomous Community of Madrid
Integral distribution management:111 Integral distribution management (before 2012): 4 Integral distribution and sewerage system management (formerly PAMAM): 35 Technical-commercial distribution management: 12 Technical-commercial distribution management with sewerage network maintenance: 1 Commercial management:8 Distribution and sewerage network management in UTE: 1 Commercial services: 1 Commercial municipal management agreement: 1 Adduction reinforcement contract: 2 No agreement: 3
78 2016 Annual Report Canal de Isabel II Municipal cooperation
Ensuring sewer management and urban drainage
Sanitation management is absolutely vital for The maintenance work carried out by the maintenance of public health in urban Canal consists of monitoring the networks, environments and to ensure environmental inspecting (5,448 kilometres of network in protection and the upkeep of the region‘s 2016) and cleaning the pipelines, cleaning water bodies in good condition. the scuppers (more than 590,000 in 2016), cleaning the occasional spills, resolving each warning and incident in the network, and carrying out any required conservation and Sewerage and urban drainage improvement works. In addition to this work, a cartographic update (1,790 kilometres The objective of urban drainage networks is in 2016) is performed and the network to collect wastewater, domestic, industrial diagnostic studies are prepared; also, technical and runoff water for subsequent transport compliance files for requests for connections to treatment plants. Canal is responsible or network modifications are processed. for maintaining municipal networks in the 134 municipalities with which it has In recent years, and given the poor state signed agreements. By the end of 2016, of the network in some municipalities, these networks reached 14,018 kilometres. Canal has promoted the preparation of This maintenance consists of inspecting diagnostic studies of the networks and the and cleaning all the network elements, as development of Master Sanitation Plans for well as carrying out emergency works these municipalities. Our goal is to ensure and cartographic updating. In the same that all municipalities have their own year, Canal managed 823 kilometres of specific Master Plan; in 2016 we delivered supramunicipal sewers and outlets. 23 municipal sewerage plans. By the end of the year, 89 of the 134 municipalities As previously mentioned, the company has already had a Plan. These actions will lead to 133 wastewater pumping stations (WWPS‘s), an improvement in the network, a significant which raise the water to allow its transport reduction in discharges and, in turn, an to the WWTPs, and 65 storm tanks and improvement in the receiving waterways, laminators, which aim to prevent flooding while reducing the risk of flooding in the and discharges into the riverbeds. Thanks municipalities under management. to these facilities, up to 1.48 million cubic metres of the first rainwater, which are the most polluting, are retained.
79 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Municipal cooperation
Sewerage System Master Plan In 2016 we delivered delivered in 2016 23 sewerage plans and Supply Master Plan drafted in 5 supply plans were 2016 drawn up for 27 of the Sewerage System Master Plan delivered and Supply Master municipalities of the Plan drafted in 2016 Autonomous Community of Madrid
In addition, in the field of urban drainage, Finally, Canal undertook a major work continued on the installation and communication campaign to raise awareness management of radar rain gauges, the among the population about the dumping installation of the Advanced System for of elements such as wipes or vegetable oils, Urban Drainage Management and the which are not part of wastewater and cause characterisation of the 15 largest storm serious clogging and problems in WWTPs, into tanks, as well as the installation of sensors the sewerage networks. to obtain data in 3 other tanks.
80 2016 Annual Report Canal de Isabel II 4.6 Commitment to users:
at your side, for whatever you need
Customer and user satisfaction is one of our company‘s main objectives. Satisfaction is obtained by providing reliable, quality services at fair rates, but it is also very important to provide adequate attention to customers, meeting their expectations and needs in an swift, simple way. To this end, our company has equipped itself with the means and resources that make our commercial work one of the best valued within the sector in Spain.
Contracts and population served in the Autonomous Community of Madrid
In 2016, Canal de Isabel II reached 1,448,928 With regard to sanitation services, at the active contracts with customers, a 1.35% end of 2016 Canal managed the sewerage increase compared to 2015. system for 134 towns in the Autonomous Community (5,498,097 inhabitants), which Through these contracts, Canal supplied represents 85.02% of the region‘s total water in 2016 to a total population of population. In water purification, it has 6,245,119 inhabitants (in 173 of the served 6,458,497 inhabitants in 179 179 municipalities in the Autonomous municipalities, practically 100% of the Community), which is equivalent to 96.57% region‘s population (99.87%). of the population registered in the region on 1 January 2016.
Types of contracts with customers in 2016
75.74% Domestic single-family Domestic multi-dwelling 9.65% Commerce - industry Rest 7.85%
6.76%
81 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Commitment to users
Our Tariffs Increase of tariffs in Madrid (%) Canal de Isabel II has established its water campaign with explanatory documents that tariff based on a series of basic principles: are made available to the public in transposing the Water Framework Directive, commercial offices and on the website 2014 -0.1 promoting its use and efficient consumption, (www.canaldeisabelsegunda.es/en/). In and achieving a fair and equitable tariff system. particular,”general”, “domestic use” and 2015 -0.1 In addition we must remember that the citizens “commercial and industrial use” tariff of Madrid enjoy water that is of the highest documents are issued for dissemination in 2016 0.0 quality in Europe. Therefore, the tariff is: commercial offices.
2017 0.0 ●● Progressive and subsidised: adapting to In recent years, Canal‘s tariff policy has the particular situations and needs of been characterised by its moderation; tariffs Accumulated -0.2 citizens. were frozen for the second time in 2016 (applicable in 2017). This situation is ●● Seasonal: encouraging rational use in expected to continue until at least 2019. periods of scarcity and high consumption. As can be seen in the table, the greatest ●● Committed to the environment: increase took place in 2014, and this was consolidating a reusable water tariff, due to the investment needs in sewerage which is an essential component of networks. This significant investment was integrated water resource management made in accordance with the obligations in line with environmental sustainability. established by Royal Decree 1290/2012, of 7 September, amending the Regulation on In order to ensure better communication the Public Hydraulic Domain. and a better understanding of the tariffs by customers, every year Canal carries out a
TARIFFS THAT IMPROVE SERVICE EVERY DAY
• Bimonthly invoice that allows users to adapt the payment to the rest of the utilities (electricity, gas, etc.), to facilitate full control of consumption and, therefore, to react more quickly and with greater efficiency in the event of any leaks or breakdowns.
• A fairer and more equitable tariff that promotes rational and efficient use, highlighting the progressive equality of all users regardless of their use of water.
• A tariff that grants allowances to large families and households, rewards saving and maintains a social exemption of up to 25m3/bimester to alleviate situations of extreme need.
• Tariff that encourages efficient water consumption by linking tariff categories to the family‘s real consumption capacity.
• Tariff that includes the use of regenerated wastewater for irrigation of public green areas and golf courses, among others, for street cleaning and industrial uses.
• Tariff that ensures the sustainability and value of the service, including all costs incurred in providing it.
82 2016 Annual Report Canal de Isabel II Commitment to users
Affordable tariffs in Spain...
Price of water supply and sanitation services in some Spanish cities in 2016 (euros per month)
€72.04
€46.02 €46.91 €48.11 €43.75 €44.55 €33.17 €36.61 €29.80 €26.07 €27.59 €28.23 €24.14 €25.67 Bilbao Seville Murcia Malaga Madrid Tenerife Valencia Average A Coruña Zaragoza Valladolid Barcelona Santander
Source: FACUA - Consumidores en Acción (2016) Palma de Mallorca
... Among Europe‘s most affordable
Price of integral water cycle services in some European cities in 2016 (US dollars per m3)
6.27 6,06 5.03 4.97 4.97 4.93 4.41 4.37 4.07 3.88 3.74 3.61 2.77 2.42 1.88 1.82 1.64 1.63 1.36 Oslo Paris Berlin Rome Zurich Dublin Lisbon Vienna Athens Munich London Helsinki Madrid Brussels Average Barcelona Stockholm Amsterdam Copenhagen
Source: Global Water Intelligence (2016)
83 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Commitment to users
Tariff allowances The tariffs for 2016 and 2017 grew 0%, despite Canal de Isabel II has established four In cases where the application is filed by the inflation having risen by 1.4% different types of allowances: beneficiary of the supply (and not the contract holder), the certificate of census in 2016. ●● Large family allowance registration (empadronamiento) must also be presented. ●● Large household allowance (5 or more members) The social exemption means that the variable tariff quota is free of charge up to a ●● Social exemption allowance (in situations consumption of 25 cubic metres per of direst need) bi-monthly period and a 50% discount on ●● Allowance for savings the fixed supply quota. This means that, for a monthly consumption of 12,500 litres, a The first three allowances fall under the family would pay 3.96 euros (including VAT) category of “social tariff”. Canal has the per month. responsibility to adapt to the needs of each person, nuclear family or household, The allowance for large family or household especially if they are going through hardship is applied in two categories: or are large families or households. ●● General large family or household with The social exemption allowance may be 5 to 7 people: pays the consumption claimed by the contract title holder or made in the second tariff category at beneficiary of the supply and, in order to prices applicable to the first, and applies a benefit from it, one of the following 10% reduction in the variable portion of documents must be provided: the water bill.
●● ●● Report from the social worker of the City Special large family or household with Council (in the case of Madrid capital, the more than 7 people: pays the consumption District Board), which must be approved made in the second tariff category at by the competent Council. prices applicable to the first, and applies an allowance for which up to 30 m³/ ●● Since 2016, certificate issued by the quarter of the third tariff category is be Council that vouches for the customer‘s charged at the price of the second. They status as beneficiary of the Guaranteed also have a 10% reduction in the variable Minimum Income in the Autonomous portion of the water bill. Community of Madrid. With these allowances, for example, for a ●● Since January 2017, accreditation of the consumption of up to 80 m³/bimonthly status of beneficiary of a non-contributory (1,333 litres per day) and with a 15 mm metre, pension, as provided for in Royal the savings would be 61 euros (they would Legislative Decree 8/2015, of 30 October. go from paying 158 to 96 euros).
The application of the “social tariff” was extended to all families receiving the guaranteed minimum income from the Autonomous Community of Madrid and to all non-contributory pension recipients.
84 2016 Annual Report Canal de Isabel II Commitment to users
In 2016, a total of 6,547 families benefited Canal has promoted alternative means to from the social exemption, a 92.11% minimise the supply cut-off due to increase over 2015 and 224.27% over 2013. non-payment. Cut-offs were thus reduced A total of 35,285 families benefited from the in 2016 by 41.86%, or by 75.67% when large family/household tariff, a 7.82% compared to 2014. The evolution of the increase with respect to 2015. cut-off in recent years is shown in the following graph.
Number of supply cut-offs per month*
3,334 3,112
1,395 811
2013 2014 2015 2016
* Average value of the 12 months of each year.
85 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Commitment to users
Actions to guarantee correct billing to the When we detect customer abnormal consumption, we notify the customer Canal de Isabel II always seeks to guarantee In order to ensure its correct operation, we to avoid possible internal the highest accuracy of the bills issued to its have a Volume Metre Verification Laboratory leaks in their property. customers, based on their actual that meets all the requirements to ensure consumption. For this reason, it has carried that its verifications and certificates have out the following actions in 2016: the required quality and recognition by national and international authorities. It is ●● Metre reading: Canal made more than accredited by ENAC as a test laboratory for 8.67 million readings on 1.52 million metre verification and, since 2011, for flow metres. The percentage of estimated bills metre verification. issued when obtaining the metre reading is possible was only 2.92%. The metres are checked at the following levels:
●● Audit and analysis of consumption: ●● Control of new metres. Canal has a quality control system for reading and invoicing in order to ●● Customer complaints. guarantee the correct billing of actual ●● Conducting of studies to learn more about consumption. The consumption audit, as the operation of metres: verification of part of the system mentioned above, is a metres in use, evaluation of new tool to help in reviewing consumption technologies, influence of installation that presents a significant variation. When conditions, verification of devices that significant variations are detected, measure water rerouted to the network, customers are alerted in order to avoid among others. any possible internal leaks in their property. A total of 8,302 metres were analysed in the metrology laboratory in 2016, notably ●● Maintenance and verification of including the 2,996 new metres used to metering equipment: as an essential renovate the metre equipment in use (36% support for billing, actions are carried out of the total). to improve the accuracy of metering equipment, mainly focused on the maintenance and constant renewal of metres.
86 2016 Annual Report Canal de Isabel II Commitment to users
Customer and user support Canal de Isabel II‘s main objective is to provide the best possible service to its users, the citizens of the Autonomous Community of Madrid. The company has an ISO 9001 certified quality system, and as part of our policy of maintaining the quality of the services we provide, specific commitments have been made to customers. The failure to comply with these commitments for reasons attributable to the company entails compensation for the customer, as shown below:
Commitment Compensation
The customer will be compensated with €10 Commissioning supply on a secondary metre (in a series of metres) within three for each day of delay, up to the total cost of working days from the date of contracting. the installation and materials.
Installing a new connection that implies a new contract, provided that there is an adequate distribution network to connect it to, or that there is already a The customer will be compensated with €20 first section executed under a Technical Compliance Project, within ten calendar for each day of delay, up to the total cost of days from the date on which Canal de Isabel II, S. A. receives the permits and the installation and materials. licences from the corresponding bodies to carry it out.
Resolving a claim presented by the customer for water consumption, or The customer will be compensated with €5 for reporting on the preliminary action to be taken within five working days from each day of delay, up to a total of €150. the date of receipt.
Arrange for a visit to the property by the operator to read the metre, on the date The customer will be compensated with €3.01 on which it was previously communicated to the customer. for each non-compliance.
Checking the metre, if technically possible, within fifteen working days from the The customer will be compensated with €5 for date of receipt of the request. each day of delay, up to a total of €150.
Our degree of compliance with the service charter has been improving over the last few years and is close to 100% in all cases. Specifically, in 2016, our compliance was 99.22%, improving over the previous year.
Compliance with the service charter
99.22%
98.57%
98.12%
2014 2015 2016
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Commitment to users
Customer communication ●● Website, virtual office and the new We have a complete channels Canal app for mobile and tablets. Within the framework of new information system for receiving and Canal de Isabel II is committed to its technologies, and for greater handling suggestions, environment and sensitive to the demands convenience and simplicity in self-service complaints and claims. of its users. Over the last few years, a major management, Canal has an online office effort has been made to improve accessibility that is available 24 hours a day. In 2016, to the different contact channels available this platform received 2.65 million visits for quick and efficient handling of claims in and had 225,951 registered users. order to meet the needs of our customers. ●● Written assistance Canal offers its The company has four main communication customers a special written assistance channels available to its customers and service (via letter or fax), where any issue users. These channels are: can be handled without waiting or delays.
●● Telephone assistance The channel that is most used by customers, who can Suggestions and claims choose to be attended by specialised handling agents or use automatic solutions to handle their inquiries or claims. In 2016, Canal de Isabel II has a complete system for Canal handled 1.03 million customer calls. receiving and handling suggestions, complaints and claims regarding billing ●● Customer service centres We have a from our customers. When complaints are network of 11 customer service centres received, there is a procedure that records strategically distributed throughout the all of them, assigning an incident number Community, where users can resolve any that the customer can use to track it. A total issue related to commercial management. of 6,387 complaints were received in 2016, These centres continue to be a basic that is, 4.41 complaints per 1,000 Canal channel that generates confidence in customers. As can be seen in the chart, this certain customer groups. In 2016, these value has increased with respect to the centres served 118,796 people. previous year.
Complaints per year for every 1,000 customers
The causes of these complaints were distributed as follows:
4.47 4.41 4.19
3.91 32.07% 21.15% Customer service quality Water quality Metre reading service Other causes 11.69% 35.09%
2013 2014 2015 2016
88 2016 Annual Report Canal de Isabel II Commitment to users
Customer non-conformities with bills are In addition to the complaints received in the Billing claims and complaints defined as billing complaints. For the commercial circuit, Canal has a service for resolution of many of these complaints, it is dealing with incidents related to the have a maximum processing necessary to go to the affected property, provision of the different services. In 2016, time of 30 days. either to inspect the supply conditions, a total of 130,823 reports related to different detecting possible causes and solutions to incidents (quality, sewerage, continuity of the problem, or to check the operation of supply, pressure and other causes) were the metre. received.
The number of complaints received grew In this comprehensive system of notices, slightly compared to 2015, totalling 21,667. complaints and claims, any customer can turn This amounts to 14.95 complaints per 1,000 to the municipal and regional services for customers, and only 0.25% of bills issued consumer protection and defence, such as the over the year (more than 8 million). 74.21% municipal consumer information offices of the complaints were resolved favourably (OMIC) or the consumer arbitration system of for the customer. the Autonomous Community of Madrid.
Billing and general complaints have a maximum processing time of 30 days, with 89.48% and 97.42% compliance, respectively, in 2016.
Claims per 1,000 clients per year Distribution of incident reports by type (number in 2016/percentage of total)
10,743/ 19.34 8.21%
47,439/ Water quality 36.26% 23,919/ Sanitation 14.99 18.28% 14.95 Supply continuity 14.34 Water pressure 36,167/ Other causes 27.65%
2013 2014 2015 2016 12,555/ 9.60%
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Commitment to users
CANAL DE ISABEL II CUSTOMER OMBUDSMAN
Canal de Isabel II‘s Customer Ombudsman is an independent The activity of the Customer Ombudsman‘s Office focuses figure who does not form part of the company‘s management on handling the complaints it receives. In 2016 it received line. It was created voluntarily in 2001 as a pioneering tool in 1,314 complaints, 81.1% of which were accepted for the public services sector. processing (1,066) as they were deemed to meet the requirements of the Customer Ombudsman Statute. Of these, The institution‘s main mission is to defend and protect the 501 (46.99%) were fully or partially resolved in favour of the rights of Canal de Isabel II‘s customers. It handles customers customer. and users who have filed a complaint with the Company‘s Customer Service Department and are not satisfied with the Of the total number of complaints accepted for processing in response received or have not received an answer to their 2016, 69.42% were filed by individuals, 10.88% by owner‘s complaint within two months after filing it. It is a last resort associations, 8.44% by companies and 11.26% by other mechanism that is governed by the principles of autonomy, entities. equity and justice.
Customer and user satisfaction The customer satisfaction and expectations model, implemented at Canal since 2001, makes it possible to evaluate the quality of service from an internal and external perspective. The results for 2016 are equal to those for 2015 and significantly better than in previous years; a score of 7.84 was obtained out of a maximum score of 10 points, significantly higher than the industry average.
Reasons for the claims processed by the Customer Customer satisfaction level (score from 0 to 10) Ombudsman in 2016
6.00% 7.84 7.84 3.10% 5.72% 7.80 5.82% 9.19% 5.25% 8.35% 7.64
7.65 7.63 1.88% 7.62 53.66% 1.03%
2010 2011 2012 2013 2014 2015 2016 Billing Water quality Insurance and risk indemnity Collection Water pressure Contracting Other reasons Cut/Chain Connections Sanctions file
90 2016 Annual Report Canal de Isabel II 4.7 Transparency, governance and social commitment:
the company of all Madrid‘s residents
By virtue of being a public company and providing an essential public service, Canal de Isabel II has the obligation to be excellent and rigorous in corporate governance and the behaviour of its employees. In addition, it is duty-bound to the citizens and must be absolutely transparent in management and, in the area of Corporate Social Responsibility, must develop open and participatory activities for all the groups with which we interact.
The corporate organisation and governing internal audit department, together with bodies of Canal de Isabel II respond, on the creation in 2015 of an Audit and Control the one hand, to the requirements deriving Committee (today referred to as the Audit from its legal nature as a corporation and, Committee following the reform of the on the other, to the objective of achieving a Spanish Capital Companies Law of 2014), a level of excellence in terms of transparency Risk Management System, submission to the and good governance. CNMV of an Annual Corporate Governance Report (already submitted and registered in In this regard, we are working on the 2014, 2015 and 2016), an Appointments and progressive incorporation of best practices Remuneration Committee, an Internal Code in good governance and transparency that of Conduct on Securities Market Issues and exceed the standards required of unlisted a Code of Conduct approved by the Board of companies, as is Canal‘s case, and the Directors at its meeting on 8 January 2015, company has an Internal Control System among others. for Financial Information (SCIIF, which we have been working on since 2013) and an
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Transparency, governance and social commitment
Relations with Public Administrations and As a public company, we transparency of management are obliged to respond to requests from all political In general, Canal must deal with the The response to these requests is made groups represented in the Administration on three levels: through the Directorate General of the Madrid Assembly. Council of the Presidency, Justice and ●● Town councils of the municipalities in Government Spokesperson, from which they which we provide our services. are forwarded to the Assembly of Madrid. We are subject to the ●● Autonomous Communities where we In addition, we have established an control of the Chamber of operate the service, especially the electronic communication channel through Accounts of the Autonomous Autonomous Community of Madrid. the Canal website for receiving and Community of Madrid. answering queries from the public. In ●● General State Administration (central compliance with the provisions of Law government) in the countries where we 19/2013 of 9 December on transparency, operate the service. access to public information and good Furthermore, as a public company, we are governance, our transparency portal was obliged to respond to requests for created on this platform in 2015, containing information and inspection by all political all the information required by the law on groups represented in the Madrid Assembly. active advertising, as well as the means to These requests reflect the issues that are guarantee the exercise of the right of access important to stakeholders, covering all to public information. aspects (economic, environmental and At the same time, Canal and its group of social) and, in addition to serving as a means companies have an obligation to render of rendering accounts for the performance accounts and are subject to the economic of the company and its Group, they help us and budgetary control of the Chamber of to understand the main concerns regarding Accounts of the Autonomous Community of responsibility, solvency and sustainability. Madrid, as well as to audits by the Court of Auditors, such bodies being responsible for ensuring that management complies with the principles of legality, effectiveness, efficiency and economy.
92 2016 Annual Report Canal de Isabel II Transparency, governance and social commitment
Requests for information by the Assembly of Madrid to Canal de Isabel II since the beginning of the X Legislature
Type of request and acronym Oral question Non - Request for Question with Oral question in Plenary Appearance Examination Legislative Information written reply in committee Annual Session Motion Sum RFI QWR OQC OQPS A E NLM
2014 61 15 7 3 6 4 96
2015 7 6 4 5 5 7 34
2016 237 21 2 12 13 1 3 289
Origin of the 308 petitions made since the beginning of the X Legislature (June 2015 - December 2016)
167 54.22%
111 36.04%
10 3.25% 16 5.19% 4 1.30%
Other audits of our management
In addition to the transparency actions ●● Deposition of accounts in the Trade and mentioned above, Canal de Isabel II has Companies Register, making such accounts numerous internal and external audit and public. control mechanisms. ●● The Spanish National Securities Market The company‘s external control mechanisms Commission (CNMV) requires that we include: increase the control and transparency of our activities. ●● Chamber of Accounts: Audits the economic-financial activity of the Public ●● The Administrative Contracting Court of Sector of the Autonomous Community of the Autonomous Community of Madrid. Madrid. ●● The Court of Auditors, the Spanish Inland ●● External auditor (KPMG): Issues a report Revenue Service and the European Court of on the true and fair view of the financial Auditors in funded projects, among others. statements. ●● All tenders and minor contracts are made public on the company‘s transparency portal.
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Transparency, governance and social commitment
The internal control mechanisms include: ●● There is a hierarchical system in place for contract and payment authorisations. We have a complete system ●● The Internal Audit Department carries out of procedures for the internal specific analyses on company practices. ●● The SAP R3 system has automated control of our management. controls on payment authorisations. ●● We have a Risk Management system and corporate controls. ●● Implementation of the Internal Control System on Financial Information (SCIIF). ●● Our Procurement Subdivision ensures the correct application of tendering procedures. The implementation of the Compliance Function and the internal training of the ●● We have a mandatory internal Code of entire organisation in relation to the Code of Conduct. Conduct are expected to be completed in 2017. The Management Committee, deputy ●● ISO-14000/9000 quality control and directors and area managers have been certification system, among others. trained, and the Ethics Line has been ●● We have an Audit Committee, which implemented. reports to the Board of Directors.
●● A Good Recruitment and Training Practices Manual is applied to contract managers.
MATTERS RELATING TO “OPERATION LEZO”
As reflected in our 2016 Annual Corporate Governance Finally, on 13 July 2016, by agreement of the Audit Committee Report, published on the CNMV website, the Audit Committee and the Board of Directors, Canal de Isabel II filed a complaint of Canal de Isabel II analysed issues related to the Brazilian with the Attorney General‘s Office regarding possible company Emissão Engenharia e Constuçoes, Ltda. (now irregularities in the acquisition of the Brazilian company Emissão) during 2016 at various sessions, the most significant Emissão by its subsidiary Soluciones Andinas. This complaint issues of which were those proposing that the Board of gave rise to the so-called “Operation Lezo”, which is currently Directors ask Canal‘s Internal Audit Department to analyse being investigated by National High Court No. 6. and audit the process in which a 75% stake in this company was acquired (in 2013), and that the Attorney General‘s Office The Board of Directors of the public company Canal de Isabel be made aware of the facts relating to the aforementioned II has resolved, at the proposal of its chairman, to present the acquisition process; as well as the recommendation to carry company and its subsidiary Canal Extensia as injured parties out an expert audit study. in criminal proceedings in order to assert their rights in the proceedings initiated by the National High Court and to offer the courts maximum cooperation with said proceedings.
94 2016 Annual Report Canal de Isabel II Transparency, governance and social commitment
Corporate Governance in Canal de Isabel II Our Code of Conduct addresses all our employees, Internal Code of Conduct and Ethics & Compliance Committee as well as suppliers and contractors of the company. Canal de Isabel II‘s Code of Conduct, Canal de Isabel II puts all resources at its approved by the Board of Directors, is aimed disposal into helping to understand, at each and every one of the company‘s implement and safeguard the Code of employees, suppliers and contractors and Conduct. In order to broaden the sets out the standards of conduct of the dissemination and knowledge of the content company‘s employees in the exercise of of this Code, in 2016 we initiated a series of their professional obligations. The principles training activities for all employees of our included in this Code are mandatory for all. company, an initiative that will continue during 2017.
The commitments set out in the Code of Conduct are as follows:
1. Commitment to people: The commitment to people is based on respect, whether they are employees, users, suppliers, contractors, or any citizen.
2. Commitment to the responsible use of information: The information we have access to in the exercise of our professional responsibilities is confidential and must be treated as such.
3. Commitment to integrity: In our relationship with third parties, including public administrations, we cannot offer or accept gifts or entertainment that go beyond social uses and that could be interpreted as an attempt to exert undue influence.
4. Commitment to the safety of people: We make sure to protect our own safety, as well as that of the rest of the people in the company and that of third parties.
5. Commitment in the event of conflicts of interest: We must avoid situations or decisions in which it may be understood that there is a conflict between our personal interest, or that of people close to us, and that of the company.
6. Commitment to clarity: We do not use false or misleading information for the purpose of obtaining subsidies, tax breaks or other aids or advantages.
7. Commitment to reliability: We conduct ourselves in accordance with the principles of clarity and transparency and ensure that none of our actions can be interpreted as deception.
8. Commitment to the responsible use of company assets: Canal de Isabel II‘s people use the resources that the company makes available to them in a prudent and diligent manner. They limit their use, generally, to professional purposes and always in accordance with the established rules.
9. Commitment to environmental protection: Canal de Isabel II‘s people must minimise the environmental impact of their actions. If environmental impacts occur, they ensure that protocols are activated quickly so that they can be corrected immediately.
Canal set up the Ethics and Compliance Committee to promote dissemination, awareness and compliance with the Code of Conduct. In addition, as established in the Code of Conduct, the Committee assumes various responsibilities related to the development and implementation of the Code in the company.
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Transparency, governance and social commitment
The members of the Committee are appointed by the Management Committee by virtue of their assignment to the departments and divisions of Canal de Isabel II that play a particularly important role in the dissemination of, and compliance with, the Code of Conduct. Its current members are:
Ethics & Compliance Committee
Chairman Director of Resources
Member Technical Secretariat Director
Member Sales Director
Member Financial and Business Development Director
Member and Secretary Internal Audit Department Head
Any Canal de Isabel II employee, supplier or appear to be incompatible due to Law contractor may contact the Committee with 14/1995 of 21 April 1995 on incompatibilities questions regarding the interpretation or of senior officials of the Autonomous Canal‘s Code of Conduct is available practical application of the Code‘s principles, to Community of Madrid. These per diem fees through the following link: submit suggestions, or to report, in good faith, were set by the Shareholders‘ Meeting at http://www.canaldeisabelsegunda.es/ violations that they may have observed. 600 euros per meeting. es/galeria_ficheros/Info_financiera/ Reports are treated with the necessary Gobierno_corporativo/Cxdigo_de_ confidentiality, as established in the protocol The Chairman of the Board, the Conducta.pdf governing the operation of the Committee. Vice-Chairman of the Board and the other Board members who are shareholders Periodically, the company reviews the representing the majority shareholder contents of the Code and develops the (Autonomous Community of Madrid) do not policies, processes and controls that are receive any remuneration for their position necessary to respond to ethics and in the Company. compliance matters, including those of a criminal nature or relating to other external As with the rest of the workforce, the regulations, such as the Transparency Law salaries of Senior Management and their or the Securities Market Law, which are annual increments are regulated by the relevant and facilitate compliance with the regulations of the Autonomous Community control and supervision obligations in these of Madrid, which requires approval by its matters of the Board of Directors and the Department of Economy and Finance. These company‘s executives. regulations expressly forbid the agreement of indemnity clauses of any kind for termination of the employment relationship. Compensation & incentives Under our incentive policy, we have defined policy a variable remuneration system linked mainly to the annual fulfilment of the By resolution of the General Shareholders‘ objectives corresponding to business plans. Meeting, the members of the Board of This system of variable remuneration is Directors of Canal do not receive any established for all personnel with remuneration other than per diems for management responsibility in some field of attending Board meetings and their action, including employees with recognised committees for those directors who do not higher education qualifications.
96 2016 Annual Report Canal de Isabel II Transparency, governance and social commitment
The remuneration corresponding to Canal Internal audit Senior Management personnel amounted to 805,000 euros, and the attendance fees for During 2016, internal audit activity at Canal de For more information on Board and committee meetings received by Isabel II continued as an independent and corporate governance at Canal, the members of the Board of Directors objective assurance and consulting activity, see the following link: amounted to 31,000 euros, a figure very designed to add value and improve the http://www.canaldeisabelsegunda.es/ similar to that of previous years. organisation‘s operations, which constitute a es/Informacion_accionistas/Gobierno_ benchmark among Spanish public companies. corporativo/Informe_de_gobierno/ Similarly, pension commitments to senior index.html management are developed under the same On 10 March 2016, the Audit Committee terms and conditions as those that apply to approved the 2016-2018 Strategic Internal other employees. In 2016, the company did Audit Plan, which, together with subsequent not make any contributions in accordance with modifications, establishes the projects to be the provisions of Law 3/2014 of 22 December carried out in the coming years. The Plan is on the General Budgets of the Autonomous based on the risk map, the strategic Community of Madrid for the year 2015. objectives of the company, the Audit Committee‘s requests and the processes The remuneration of Canal de Isabel II‘s detected by the Internal Audit Department highest-paid person, in accordance with the itself, as well as the follow-up of the requirements and responsibilities of the recommendations arising from the audits position, was four times the average carried out. Throughout 2016, this Audit compensation of the staff. Remuneration for Plan was subject to two modifications, at the both the highest-paid person and for the request of the Audit Committee, to add new rest of the company‘s workforce grew, for audits during the year. Thus, a total of eight the first time since 2010, by 1% in accordance audits were carried out, giving rise to 181 with the General Budgets of the Autonomous recommendations for improvement. Of Community of Madrid for 2016. these recommendations, 51.9% were implemented or closed at the end of the year. Corporate risk management, Corporate Risk Management audit and internal control Type of risks identified at year-end The corporate risk management activity in In order to carry out the internal control of 2016 Canal started in 2010 under the COSO III the company and the management of methodology, and throughout 2016 this corporate risks, Canal has a specific Internal activity has been consolidated following the 8.53% Audit Department reporting hierarchically to methodology implemented in previous the General Management and functionally to years. The company‘s Operational Risk Map the Audit Committee of the Board of 13.95% and its High-Level Risk Map have both been Directors, to which it reports periodically. updated twice. The Catalogue of existing Since 2012, the Internal Audit Department risks at Canal was redefined in order to 19.38% has had the international QAR (Quality adapt it to the reality of the company, Assurance Review) certificate, awarded by incorporating new potential risks (as a result, the Institute of Internal Auditors of Spain, we now have 129 identified risks). 48.84% which certifies that its work complies with the international standards for professional All this has been done at the same time as practice. Moreover, the members of its staff the monitoring of the Key Risk Indicators 9.30% have professional certification as Certified (KRIs) and the effectiveness and design of Internal Auditors (CIA), which guarantees the controls that mitigate them is maintained Compliance their capacity and professionalism. by the company‘s risk managers. Strategy Information Operations Senior Management
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Internal Control company began to implement the Compliance Function, starting by identifying In relation to the Internal Financial the most important applicable regulations, During 2016, Canal de Isabel II notified Information Control System (SCIIF), determining the strengths and components the CNMV of nine significant events, implemented by the Financial Management to be developed, prioritising regulations which can be viewed on the company‘s and Business Development Department, it is according to their risk and obtaining a global website at the following link: worth highlighting the work carried out by and detailed view of the company‘s https://www.cnmv.es/Portal/ the Internal Audit Department during 2016 regulatory map. HR/ResultadoBusquedaHR. in entering the controls of Canal Gestión aspx?division=1&nif=A86488087 Lanzarote and Hispanagua SAU (companies Reporting of Significant Events of the Canal de Isabel II Group) in the SAP to the CNMV GRC application, as well as launching the corresponding design and effectiveness Canal‘s Internal Audit Department is evaluations of the controls of these two responsible for the company‘s interaction companies. with the Spanish National Securities Market Commission (CNMV), responding more For its part, Triple A (a Canal de Isabel II Group company in Colombia) completed the effectively and as quickly as possible when it methodological part for the implementation makes queries, verifications or requests for of SCIIF, which will be developed in 2017. information related to the dissemination of The implementation of SCIIF has also important company information. continued in Canal de Isabel II itself, both in The disclosure of significant events and facts is the business and Information Systems areas. based on the principle of complete information, The Compliance Function as well as on the obligation to provide truthful and updated information publicly, in In 2015, the Audit Committee of the Board accordance with Stock Exchange regulations. of Directors assessed the desirability of The publication of this information allows having a compliance function to reinforce investors to obtain an informed value the “three lines of defence” (risk judgement on the actual situation of the management, audit and internal control) company and to maintain the proper that the company had already established. functioning and transparency of the stock As a result of this decision, in 2016 the market.
98 2016 Annual Report Canal de Isabel II Transparency, governance and social commitment
Social commitment
For more information on Canal de Isabel II has for years been firmly ●● Robert Doisneau: The beauty of the corporate governance at Canal, committed to being a reference in the fields everyday, which brought together in the see the following link: of culture, sport, leisure and support for same space several of his emblematic http://www.canaldeisabelsegunda.es/ social initiatives. For this reason, it develops works and others that have rarely been es/Informacion_accionistas/Gobierno_ numerous activities and makes its facilities displayed, selected by his daughters to corporativo/Informe_de_gobierno/ and technical, human and economic uncover an unexpected and unknown index.html resources available to society. facet of an artist determined to show life not as it is, but as he would have liked it to Our support of culture be. The exhibition was organised using the Atelier Robert Doisneau collection and The Canal Foundation is especially active in with the aid of diCHromA Photography. the cultural sphere. Created in 2000, it focuses on organising cultural exhibitions, ●● Vivian Maier: Street Photographer, an activities related to music and the exhibition about one of the most performing arts, various competitions surprising figures in contemporary (literary, photography and video), debates photography, who alternated her on current affairs and research on water profession as a nanny with her great and the environment, among others. hidden passion: she took more than a hundred thousand photographs that she In 2016, the Canal Foundation organised never showed to anyone. This exhibition 3 exhibitions and 69 cultural, scientific and presented, for the first time in Madrid, an social events, and has received more than overview of Maier‘s work, addressing her 140,000 people in its exhibition hall and other main interests and showing the quality of facilities at the headquarters. In addition, her viewpoint and the subtlety of her almost 2,200,000 people have participated visual language. The exhibition was in the social media activities it developed. produced in collaboration with PhotoEspaña. The three exhibitions organised by the Foundation stand out: In addition to these exhibitions, the new edition of the Children‘s Narrative Prize “El ●● Chagall: Divine and Human, showing a Cuentagotas 2016” or the photography hundred works on paper spanning competition “Del selfie al self-portrait” stand 4 decades of activity that reflect the intense out. In the latter, the Foundation proposed and surprising connection between the that participants set aside their passion for sacred and the profane in Chagall‘s work, selfies and recover the value and magic of a synthesis of personal experience, myth classic self-portraits. The usual musical and religion. The exhibition used pieces cycles were also held, and technical forums from the Marc Chagall Collection C. S. Paris and conferences were organised, most of the Kunstmuseum Pablo Picasso in notably the 11th Water Forum, under the Munich (Germany). theme “Water, data and the Internet: A cocktail of value and employment”.
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Fundación Canal statistics
No. of exhibitions organised Total other activities
2014 2015 2016 2014 2015 2016 3 4 3 52 61 69
No. of (physical) visitors No. of visitors to Foundation exhibitions
2014 2015 2016 2014 2015 2016 76,678 84,274 140,672 67,599 70,676 132,480
Number of (physical) visitors to other activities
2014 2015 2016 9,079 13,598 8,192
No. of online visitors
2014 2015 2016 1,229,294 1,051,000 1,128,125
Social media (users)
2014 2015 2016 266,367 1,061,767 2,198,230
You can find out more about the Canal Foundation‘s activities by visiting their website at: http://www.fundacioncanal.com/
In addition to the Foundation‘s exhibition 2004, with more than 3 million visitors, facilities, Canal also runs the Arte Canal making it one of the city‘s key cultural Exhibition Centre, located in the fourth landmarks in recent years. The last underground water deposit, with a structure exhibition, “Cleopatra and the Fascination of dating from the first half of the 20th century Egypt”, was held between 2015 and 2016 and covering an exhibition space of 2,000 and received a total of 222,581 visitors. square metres. This venue has hosted thirteen major thematic exhibitions since
100 2016 Annual Report Canal de Isabel II Transparency, governance and social commitment
CLEOPATRA AND THE FASCINATION OF EGYPT EXHIBITION
Cleopatra and the Fascination of Egypt is the new exhibition at Arte Canal in 2015, featuring more than 400 archaeological pieces from eighty Spanish and international museums and collections. It is an exhibition that combines dissemination, rigour and quality, so it will fascinate all those who visit it. The exhibition, curated by professors Giovanni Gentili and Martín Almagro Gorbea, aims to give the visitor a glimpse not only of the myth but also of the figure and the time in which she lived. Cleopatra VII, the last queen of Egypt, is used as the guiding thread. Not a single Cleopatra, but many: the woman, the sovereign, the mother, the lover, the stateswoman... as many as have fed her legend. The exhibition is a fascinating journey through Ancient Egypt in which more than four hundred pieces come to life through a mise en scène that shows an image of Egypt and the Nile as a great civilizing cradle; of Alexandria as a cultural melting pot; and of Rome as a recipient of Egyptian influence in aspects ranging from tax collection to the introduction of the cult to Isis. The exhibition is designed as an illustrated tale that begins on the outer esplanade of the enclosure, where a large-sized reproduction of a cat-shaped sarcophagus was installed. The cat is the most sacred animal in Egyptian culture, and we know that Cleopatra had a special fascination for them. Inside, the exhibition is divided into eight scenes or settings. The star attractions on display include abundant pieces of gold, silver and Alexandrian-style precious stones from the excavations of Pompeii and Herculaneum in Italy, an anthropomorphic sarcophagus from the early 4th century BC, from the Museum of Anthropology at the University of Padua; a portrait of Cleopatra by John William Waterhouse, dating from 1887, from a private London collection; the portrait head of Cleopatra VII, from the first half of the 1st century BC, from the Brooklyn Museum of Art in New York; or the famous Alexander the Great “Guimet”, on loan from the Louvre Museum in Paris. Also on display is part of the wardrobe used by Elizabeth Taylor in the filmCleopatra , by Joseph L. Mankiewicz, released in 1963.
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The Canal de Isabel II Exhibition Hall is also We promote sport Canal and its Foundation located in the city of Madrid (First Raised Deposit). Built in 1911, it is now a unique Canal offers Madrid residents various have an important space that houses exhibitions of recreational facilities and sports areas in the editorial line. contemporary photographic and audiovisual Autonomous Community of Madrid. creation, managed by the Department of Culture of the Autonomous Community of In the city centre of Madrid, it has twelve Madrid. Every year it collaborates with the hectares located on the roof of the Third We promote grassroots ARCO and PhotoEspaña competitions. Three Water Deposit dedicated to football, paddle sport in the Autonomous noteworthy exhibitions were held in 2016: tennis and jogging, as well as for recreation Community of Madrid. “El instante poético y la imagen arquitectónica” and leisure time. Other noteworthy facilities (”The Poetic Instant and the Architectural in urban areas include the swimming pools Image” - Archive of Paco Gómez), an exhibit and various sports facilities at the Campo de dedicated to the work of designer Jesús del Guardias deposit and the Fourth Deposit, Pozo, and, lastly, “Toni Catany: When Going located near Plaza de Castilla. Was Coming Back”. In addition, Canal also has three non-urban Canal de Isabel II and the Fundación Canal recreational areas, two in the reservoirs of have an editorial line. The Canal Foundation Valmayor and El Atazar, focusing on sailing, focuses its publishing work on the rowing and canoeing, as well as a third in publication of its exhibition catalogues and the Riosequillo reservoir, which has one of other activities, while Canal has a broader the largest swimming pools in the editorial collection, compiled over the Autonomous Community. These areas course of its years of existence, ranging received a total of 60,045 visitors in 2016. from technical studies to more informative editions, whose central theme is water.
Statistics of Canal de Isabel II recreational areas
2014 2015 2016
Riosequillo 34,870 46,783 52,917 El Atazar 5,282 5,083 5,650 Valmayor 4,088 3,923 1,478 SUM 44,240 55,789 60,045
In addition to these facilities, since 1978 Canal has supported the Canal Sports Club, whose objective is to promote the practice of sport. In 2016, the Sports Club had the sections devoted to athletics, canoeing, rowing and sailing, and it is open to the general Madrid public. A total of 17,544 athletes participated in its activities this year, the most noteworthy of which was the organisation of the 37th Edition of the People‘s Water Race. Held on 29 May 2016, more than 6,500 athletes participated in the event, which, for the second time, had two distances (5 km and 10 km). Two euros of each registration fee in the race was donated to the Spanish Federation of Rare Diseases, which works to defend, protect and promote the rights of the more than 3 million people who suffer from these types of diseases in Spain.
102 2016 Annual Report Canal de Isabel II Transparency, governance and social commitment
Cooperation in water and Collaboration with social Canal strongly supports sanitation and other social institutions initiatives. the UN‘s Sustainable Canal is a signatory to the United Nations Development Goals for On 28 July 2010, the United Nations Global Compact, and every year it prepares water and sanitation. General Assembly explicitly recognised the its progress report, which is sent to the human right to water and sanitation through organisation. In 2016, for the sixth Resolution 64/292. This resolution calls consecutive year, our report obtained an Canal is a founding member upon States and international organisations Advanced score, the highest rating awarded to provide financial resources, to facilitate by the world‘s largest voluntary corporate of the Spanish Global Compact training and technology transfer in order to social responsibility initiative. This distinction Network (since 2006). assist developing countries, and to provide recognises the quality of the information a clean, accessible and affordable supply of provided by companies in their annual safe drinking water and sanitation for all. reports. Canal de Isabel II is one of the founding partners of the Spanish Global In this area, Canal strongly supports the Compact Network (since March 2006). provisions of the Sustainable Development Goals on water and sanitation, approved by The Global Compact, to which more than the United Nations General Assembly in 13,000 entities in more than 145 countries September 2015. We are aware of the have joined, is a voluntary instrument of the importance of achieving these goals, and for United Nations that promotes the this reason we have applied our social tariff implementation of 10 universally accepted in the Autonomous Community of Madrid principles to promote corporate social and we carry out development aid and responsibility. These principles are grouped cooperation projects in other places. into four areas: human rights, labour, environment and anti-corruption. Canal‘s most significant initiative in the area of cooperation is Canal Voluntarios, a Canal is a friend of Fundación Lealtad, a corporate volunteer program aimed at non-profit organisation whose mission is to carrying out development aid projects for foster the trust of society in NGOs so as to water and sanitation, with the objective of increase donations and any other type of providing safe drinking water and sanitation collaboration. It was the first entity to develop in areas of the world where the population a methodology for analysing transparency and suffers from serious shortages. good management practices in Spanish NGOs. It has carried out its work since its creation in Since 2007, Canal Voluntarios has carried 2001, based on its values of independence, out 64 projects in 29 countries with 467,291 transparency, solidarity and rigour. beneficiaries. One of the highlights of 2016 was the start of collaboration with the Canal is also a partner of the Fundación Vicente Ferrer Foundation on a project to Sociedad y Empresa Responsable (SERES provide toilets and showers for six villages Foundation). Its aims include promoting a more in the Anantapur district of India; this is one important role for companies in improving of the projects that has been selected in the society, focusing on encouraging companies to annual call for aid for development help create value and take on their role as a key cooperation actions in water and sanitation agent in solving social problems. that the company develops annually. Also Finally, every year Canal takes part in this year, Canal Voluntarios has collaborated activities organised by social entities with with the Diocese of Callao and with the participation of employees. In 2016 Firefighters Without Borders, among others. Canal has collaborated in the activities of the Spanish Red Cross, the Spanish Association Against Cancer, Action Against Hunger and Oxfam Intermon Spain, among others.
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Economic resources for society 3.55% of our profit goes In 2016, Canal de Isabel II earmarked a total of 8.23 million euros for activities related to its towards social issues social commitment, equal to 3.55% of the company‘s after-tax profit. Of the resources allocated, 0.23 million correspond to investments in infrastructure for social, cultural and sporting purposes and 8.01 million went to cover the expenses incurred to carry out these activities, distributed as follows.
Expenses related to Canal‘s social commitment in 2016
2.21% 1.40% 5.22%
Employee benefits Maintenance of social infrastructures 18.36% 46.97% Social institutions and others Social tariffs 2.14% Culture and education 23.70% Cooperation Sport
104 2016 Annual Report Canal de Isabel II 4.8 Canal‘s professionals:
Empowering our people
Human resources management is a strategic aspect of our processes, as it deals with one of Canal‘s greatest assets: our people. Canal is aware that achieving excellence in service quality and customer satisfaction within a framework of responsible and efficient management of water resources are objectives that can only be achieved through the cooperation and qualification of each and every one of the company‘s employees.
Structure of the workforce Community of Madrid to hire 162 people on an indefinite basis in 2016. In spite of In addition, occupational Canal‘s workforce has remained virtually this, the workforce on temporary contracts risk prevention and health unchanged in recent years due to the has remained close to 900, representing and safety at work are an restrictions on hiring established in the just over a third of the company‘s total general budget laws of the Autonomous workforce. absolute priority for Canal de Community of Madrid, which prevent Isabel II and affect all of its indefinite hiring. In 2016, the total workforce The average age of Canal employees is the activities across the board. of 2,590 people has grown by only 2.90% same as in previous years, with an average compared to the 2015 total. Although the age of 47 for permanent employees and growth with respect to 2014 was higher 31 for temporary employees. The average (6.72%), this growth is mainly due to the seniority in 2016 was 13.6 years, and more inclusion in 2015 of the 93 employees of our than half of the workforce was between delegation in Cáceres. 30 and 50 years old.
Despite the aforementioned budgetary difficulties, the company has asked the Department of Finance of the Autonomous
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Distribution of the workforce by age (all employees, including Distribution of workforce by gender (all staff, including Cáceres delegation) Cáceres delegation)
747/ 499/ 816/ 19.27% 28.84% Under 30 31.51% Women 30-50 Men Over 50
1,344/ 1,774/ 51.89% 68.49%
Throughout 2016 the company has had a net increase of 73 employees, with a turnover rate of 2.82% of employees.
Total Men Women Under 30 30 - 50 Over 50 Nationals Foreigners
Total hires 324 194 130 231 88 5 320 4 Total departures 251 163 88 104 87 60 251 Voluntary 40 14 26 28 12 40 departures
Nearly 30% of Canal‘s staff (28.80%) had a university degree at the end of 2016.
Distribution of Canal de Isabel II employees by function (number of employees/percentage of total)
110/ 294/ 4.25% 11.35% Management support staff 898/ 231/ Graduates with a doctorate/ 34.67% 8.92% master‘s degree Graduates with a bachelor‘s degree 111/ Middle managers 4.29% Technicians 563/ Administrative and auxiliary staff 21.74% 159/ Technicians with vocational training 6.14% Directors, Deputy Directors and Area 224/ Managers 8.65%
106 2016 Annual Report Canal de Isabel II Canal‘s professionals
Training and development of our employees
Every year a Training Plan is At Canal, we believe that employee training is Together with the training, Canal also designs drawn up with the actions a strategic element that demands optimum and implements Professional Development that are necessary for the management to achieve the greatest Programmes aimed at strengthening optimum performance of efficiency in the service we provide. management skills and competences. These workers‘ functions. programmes combine face-to-face sessions When planning training, we usually work outside the working day with inter-session with a time horizon of one year. A Training work and conclude with an action plan Plan is drawn up that includes the actions carried out by each of the attendees defining In 2016, 45.95 hours of that can be foreseen and all those actions how to apply the competences worked on a training per employee were that are necessary for the optimum exercise day-to-day basis. provided. of the workers‘ functions, as well as the actions that can be useful in other positions in In 2016, a total of 110,551 hours were taught the company. These so-called development in the company (an average of 45.95 hours courses are voluntary, open to all employees per employee/intern) and 2,406 employees and take place outside working hours. and interns (90.55% of the total number of employees) received training. 46% of these The subjects that make up the plan cover all hours were given during working hours, 40% the technical needs of the employees and outside working hours, and the remaining the methodology that they follow is adapted 13% are internships. to the target groups and is heterogeneous. Notably, online training is experiencing As in previous years, Canal de Isabel II continues significant growth due to the flexibility and its policy of collaborating with academic and other advantages it offers. training institutions to facilitate contact with the business world for young professionals and students. To this end, collaboration and cooperation agreements and scholarships are promoted so that these people can complement their academic training.
Theme of training in 2016 Hours % of total
Technical training 24,069 21.77% Languages 18,999 17.19% Occupational Risk Prevention 16,193 14.65% Office Automation and Software Applications 11,249 10.18% Skills Development 8,616 7.79% Administration and Management of Computer Systems 4,395 3.98% Quality 4,322 3.91% Sales/Marketing and Customer Relations 2,603 2.35% Legal, Fight Against Corruption and Economic 3,883 3.51% Others + On-the-Job Training 16,222 14.67%
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Ensuring the health and safety of all
In the period between 2014 and 2016, there due to the fact that the type of accidents was a significant increase in the frequency and injuries produced led to a reduction in and incidence rates, mainly due to the sick days. It is also worth noting that no fatal increase in in itinere accidents and accidents accidents occurred. without leave. With regard to lost working days, the average length of time lost and Absenteeism increased slightly, reaching the severity index declined in the last year 4.32% of hours lost in the total workforce.
Accident indicators 2014 2015 2016
Occupational accidents in labore (excluding in itinere) 104 125 124 Accidents with leave (excl. in itinere) 48 69 67 Average leave duration (days) 24.15 15.65 16.31 Days lost 1,159 1,080 1,093 Rate of frequency of accidents with leave (excl. in itinere) 12.53 17.25 16.20 Rate of frequency of total accidents (excl. in itinere) 27.15 31.25 29.98 Severity index (excl. in itinere) 0.30 0.27 0.26 Rate of incidence of accidents with leave (excl. in itinere) 20.86 28.80 26.95 Fatal victims (number) 0 0 0
Absenteeism rate of the entire workforce (percentage of hours lost out of total hours)
4.37 4.28
3.74 3.35
2013 2014 2015 2016
108 2016 Annual Report Canal de Isabel II Canal‘s professionals
The procedure for reporting workplace activity, such as training and information, accidents is carried out in accordance with emergency measures, health surveillance, Risk prevention is part current legislation on the prevention of preventive resources and the coordination of Canal‘s culture. occupational risks. All accidents are analysed of business activities. and, if necessary, prompt the adoption of corrective or preventive measures. Workers‘ In the area of Occupational Risk Prevention, representatives are also informed about the a total of 16,193 hours of training has been accidents that take place. given in 2016 to newly recruited workers, promotions, transfers and top-level jobs. To date, Canal has not recorded the existence Also this year, first-aid training continued to of any occupational diseases associated with be provided by different work centres. its facilities or the company‘s activities. Canal has its own medical service that carries Within the scope of the Occupational Risk out a multitude of actions in the company Prevention Plan, annual safety inspections in terms of health surveillance, including are carried out at the facilities, aimed at health examinations, medical protocols detecting possible deviations in the fields of based on risk assessment, smoking control safety, industrial hygiene and ergonomics. programmes and disease prevention programmes. Canal‘s prevention service addresses the most important characteristics of the elements to be considered in preventive
Equal opportunities at Canal de Isabel II
Non-discrimination is one of the homogenising the salaries of permanent fundamental policies in the management and temporary staff. of the company‘s human resources. Furthermore, Canal de Isabel II‘s recruitment The company‘s Equality Plan, drawn up in and admission rules ensure that there is no 2014, was incorporated into the company‘s discrimination of any kind, as they expressly new agreement when the Equality Plan reflect the principles of equality, merit and Monitoring Committee was set up. The goal capacity. of this Committee is to establish the measures and action plan for each objective set out in The percentage of women in the the Collective Bargaining Agreement in each workforce has increased in recent years of the following seven areas: personnel and now represents 31.50% of the total. selection, classification and professional The percentage is slightly higher at the promotion, training, remuneration, management level, with women accounting reconciliation of work and family life, for 32.73% of the total, a figure that has sexual and gender-based harassment remained stable from 2014 to 2016. and information and communication. In addition, the new agreement includes an With regard to wages, our Agreement anti-harassment protocol. ensures equality between men and women, with the same wage items for both of According to Spanish law, all Canal them and in the same amounts in all employees are entitled to take maternity or professional categories. Thus, at the end of paternity leave. Likewise, the levels of return 2016, the company‘s minimum wage was to work and retention after maternity or 167.54% higher than the interprofessional paternity leave are 100% for both sexes, as minimum wage and the minimum wage established in Spanish labour legislation and for traineeships was 150.78%. These in the company‘s collective agreement. The percentages will improve considerably number of Canal employees who enjoyed after the application of the new company this right in 2016 was 51 (16 women and collective bargaining agreement, starting 45 men). in 2017, which includes a process of
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A highlight in 2016 was Trade union representation the agreement reached between the company and The new collective bargaining agreement Following the creation of the new company agreed by the company and the workers‘ Canal de Isabel II, until January 2017, union representatives in representatives in December 2016 the “Collective State Agreement of the relation to the First Collective establishes a framework of stable labour Industries of Collection, Elevation, Routing Bargaining Agreement. relations aimed at achieving the optimum through Pipelines, Treatment, Distribution, level of productivity in the company based Sanitation and Purification of Drinking on the best use of its human and material Water and Wastewater” has been in force. resources and based on the mutual This agreement covered 99.92% of the collaboration of the parties in all those company‘s workforce, leaving only two aspects that may have an impact on the best managers outside its scope. service made possible by development. At the end of 2016, a total of 453 workers The Works Council, made up of 25 members, were affiliated to the company‘s trade union is the Canal workers‘ representative sections, representing 17.49% of the total body and has the functions and powers workforce. established by the Workers‘ Statute.
NEW COMPANY COLLECTIVE AGREEMENT
On 2 December 2016, Canal‘s Works and Management it was agreed to standardise remuneration over a period Committee reached an agreement whereby the company of three years with regard to basic salary, with the job abandoned the previous sectoral agreement and returned to supplements being equal to one hundred per cent since the Canal‘s historic model of having its own specific agreement. This entry into force of the Agreement. was achieved after several months of negotiations and following the commitment of our chairman. The preliminary agreement The agreement entered into force in January 2017, following was reached unanimously by the trade union sections and is its publication in the Official State Gazette. supported by an absolute majority of the Works Council. This agreement is not applicable to the Cáceres Delegation, The new agreement allows us to homogenise the day-to-day which is represented by its own Committee and continues working conditions, leave and social benefits of all employees to be governed by the Collective State Agreement of the (fixed or temporary); in this way we are able to improve Industries of Collection, Elevation, Routing through Pipelines, the integration of workers‘ groups and better manage the Treatment, Distribution, Sanitation and Purification of Drinking company‘s human resources. With regard to compensation, Water and Wastewater.
110 2016 Annual Report Canal de Isabel II Canal‘s Professionals
Internal communication
Internal communication At Canal we care about facilitating the located in the Autonomous Community of is key to fostering the development of a communication culture Madrid participate in Canal Deporte, a sports pride of belonging of our within the organisation. For this reason, we and reunion day for all employees, family professionals. publish a magazine that is distributed to all members and retirees of the company. This employees (through the Intranet, Canal&tú) year, a total of 833 people participated in and which reflects the news of the company the eighteen sports disciplines that we and its employees. organise in Canal Deporte. 833 employees have participated in Canal Deporte In 2016, two years after the launch of the Canal also organises a children‘s drawing new Canal&tú intranet network, it has not contest for the children of employees. The activities in 2016. only consolidated itself as the most powerful winning drawings are awarded by including instrument of communication between the them in the following year‘s annual company and its employees, but it has also company calendar. Also aimed at children, expanded, including audiovisual material the Christmas party is organised and a and the concept of site (websites that allow Christmas cinema or circus session is also information to be included and updated by organised for children and family members the areas themselves). of employees. Lastly, Canal commemorates its retirees with an annual tribute ceremony. Canal and its employees participate in numerous charity or commemorative Social Benefits events such as solidarity cafés in favour of the Spanish Association Against Cancer In accordance with the budgetary or the Red Cross, where the total revenue regulations in force in the Autonomous obtained from employees is doubled by the Community of Madrid, the social benefits of company and donated in its entirety to the Canal employees and subsidiaries in Spain beneficiary entities. are suspended, including the company‘s contribution to the employee pension fund. Among the activities carried out with However, a financing system is maintained employees, the celebration of International for transport costs and, in particular, for the Women‘s Day with an event at our acquisition of the Transport Pass in Canal headquarters is particularly noteworthy. and in the Madrid-based companies of Grupo Canal. Canal uses the promotion of sport not only to protect employees‘ health, but also to Employees have the option of taking out strengthen their relationship with each other a collective medical and dental policy and to spread the company‘s values. We for themselves and their families in have teams of employees in different sports advantageous terms, as well as some and coordinate their participation in races, discounts and benefits on access to certain trophies and championships. Every year, sports and recreational facilities. the employees of Canal and its subsidiaries
111 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016 4.9 Innovation and development:
At the cutting edge of our sector
Since its inception, Canal de Isabel II has been committed to innovation and technological development to meet the challenges posed by the management of the integral water cycle. We were pioneers in many areas, including remote control, communications and information technology, and today we are one of the companies in our sector that invests most in innovation.
We contribute to the development of R&D&i in our sector The company‘s innovation effort over the last few years is evidenced in a portfolio The company‘s innovation effort in recent of R&D&i projects and agreements that fall years is evidenced by its portfolio of 35 within the following lines of work: R&D&i projects initiated, under development or completed in 2016. ●● Assuring balance between availability and demands The R&D&i expenditure budget in 2016, associated with contracts, agreements and ●● Assuring strategic continuity of the service minor expenses, amounted to 1.14 million ●● Strategic infrastructure management euros. Adding the internal costs, derived from the dedication of the Canal personnel ●● Drinking water and health involved, and the activities and investments ●● Environmental integration and sustainability of other areas related to the projects, the total figure for R&D&i projects amounts to ●● Efficiency in management more than 3.53 million euros.
112 2016 Annual Report Canal de Isabel II Innovation and development
The most important active R&D&i projects during 2016 were the following:
PROJECT STATUS at 2016 year-end
Sectorisation Plan for Canal de Isabel II supply networks and pressure management . Under development
Interpretation of flow registers in sectors . Under development
Study of the evolution of demand and explanatory factors. Under development
Development and updating of hourly consumption models by sector of the Canal de Isabel II Under development supply network.
Development of analysis tools for the supply and distribution network of Canal de Isabel II. Under development
Detectability of leaks and breakage in distribution sectors. Under development
Risk assessment and management for the supply and distribution service of Canal de Isabel II. Under development
Determination of breakage patterns and structural failures in the distribution networks, singular Under development elements, connections and measurement equipment of Canal de Isabel II.
Development of water quality simulation models in the supply network. Under development
Implementation of an advanced system for the operation of the Manzanares sanitation system. Under development
Study of the reduction of infiltration in sewerage systems managed by Canal de Isabel II. Under development
A multivariable advanced control solution for sustainable operation of nutrient removal urban Under development WWTPs (artICA4nr).
Early warning system for extreme precipitation. Under development
Study of the influence of pressure transients on the service life of network elements. Under development
Verification of the hydraulic and energy models of the Canal de Isabel II distribution network. Under development
Calculation of the resilience of Canal de Isabel II‘s supply and distribution system. Under development
Characterisation of the operation of the Canal de Isabel II distribution system. Under development
Updating of the return rates for each drinking water use in order to calculate the urban waste flow Under development for the design of sanitation infrastructures .
Experimental study to measure motion in the abutment of the El Villar dam by means of Under development three-dimensional laser scanning.
Development of a life cycle model for water supply infrastructures. Finished
Planning system for the renewal and upgrading of Canal de Isabel II‘s supply and distribution network . Finished
Drafting of the catalogue of spillways managed by Canal de Isabel II. Finished
Continued on next page
113 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Innovation and development
Continued
PROJECT STATUS at 2016 year-end
Development of a self-regenerating biofilter for the elimination of odour-producing compounds in Finished supply reservoirs.
Evaluation of the presence of Acanthamoeba and other protozoa in water for human use. New Finished alternatives to diagnosis, treatment and control.
Updating of outdoor water use information by remote detection with high-resolution satellite images. Finished
Analysis of the influence of equipment renovation on metre accuracy. Finished
Development of a pattern recognition system for identifying the ultimate uses of water in domestic Finished consumption.
Observability study for assessing the water condition of the sectorised supply network. Finished
Evaluation of the potential for formation ofnitrosamines (specifically n-nitrosodimethylamine -NEMA-). Finished
Bofill analysis associated with episodes of breakage in Canal de Isabel II‘s distribution network. Finished
Pipeline identification by remote aerospace detection techniques. Finished
Canal de Isabel II‘s Vision of the Smart Water City Finished
Study and applicability of energy generation alternatives for energy optimisation in Canal de Isabel II In process
Study of the internal morphological characteristics of supply pipelines. In process
Study of sustainable urban drainage techniques (SUDS). In process
The dissemination of the knowledge generated Seeking to stimulate innovation in the and the results of the most important company, at the end of 2010 the R+D+i research projects have led to the publication blog was launched. The blog is an internal of new titles from the collection of R&D&i forum in which to publish articles, news and workbooks, supplementing those published events related to research, development in previous years with a total of 24 workbooks. and innovation, encouraging workers to The workbooks published this year are: share opinions and generate debate on the subject. ●● Workbook 24: Case study and fault modes in pipes, connections and measurement equipment of the Autonomous Community of Madrid.
●● Workbook 23: Observability study for estimating the hydraulic condition of the sectorised supply network.
114 2016 Annual Report Canal de Isabel II Innovation and development
NEW R&D&i STRATEGY (2017-2020)
Canal de Isabel II is one of the companies in its sector that invests most in research, development and innovation.
In 2016 we drew up a new R&D&i Strategy 2017-2020, in line with the Fifth Regional Plan for Research, Science and Innovation of the Autonomous Community of Madrid (PRICIT). This strategy will increase the R&D&i budget by 236% with respect to 2016, reaching 2% of our turnover in 2020. All this as a response to the public company‘s commitment to innovation and research; and an objective, the European Centre of Excellence for the Integral Water Cycle.
Water and the circular economy will be a strategic sector for social and economic development in the coming decades, and we have one of the best companies in the sector at an international level to make Madrid one of the most advanced innovation poles at the national and international level. This should be one of the biggest goals that Canal must achieve in the future.
One of the main milestones of the year in contributed our experience on key issues relation to innovation was the high turnout such as water resilience in tackling climate of our professionals at the iWater water change, integrated governance policies cycle show, held in Barcelona. Hundreds and management models, water reuse, of professionals from the sector and the water/energy binomial or social tariffs, institutional representatives from more than among others. 20 countries attended this event, where we
115 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Innovation and development
Technology at the (internal and external) customer‘s service
Canal de Isabel II applies technologies that ●● Implementation of a traceability system promote the efficient use and management in the bottling plant. of resources, demands and infrastructures ●● Development and execution of the first in all its processes. In this regard, the phase of migration to Office365 as a application of advanced information and collaboration and productivity tool in the communication systems technologies is digital transformation of the workstation. particularly noteworthy. ●● Implementation of Next Generation Operational actions in the field of technologies Firewalls for greater control of network are focused on advancing technological traffic to corporate information systems. innovation and boosting advanced information, communications and remote ●● Implementation of an information system control systems and technologies. Canal‘s for Business Continuity and Alarm ICT expenditure in 2016 amounted to 25.33 Reporting and Management. million euros, and it made investments ●● Establishment of a Business Continuity amounting to 7.3 million euros. office.
In 2016, the following information systems ●● Implementation of the 10Gbps network in were implemented: the core of the Data Centres.
●● ●● Implementation of preventive Installation of 10 km of Optical Fibre for maintenance in drinking water treatment links with Canal de Isabel II facilities and plants and also in 4 wastewater treatment centres. plants. ●● Expansion of the transmission network to ●● Implementation of the new NOVATA extend the digital trunking network interface for the remote control system. (TETRA) for emergency services in the Autonomous Community of Madrid, ●● Implementation of the TRAMYTA installing 23 new radio base stations to communications processor under the extend the coverage and supply of 50 CYCLO project. terminals. ●● Implementation of the minor contracts It is worth mentioning that in this year, the manager as part of the CYCLO project. availability of the company‘s critical systems ●● Implementation of the TELCO application was 99.95% and 99.94% in other important for telephone management. systems.
●● Implementation of the publication of In relation to internal customer satisfaction, as supply cuts on the website and in the APP, indicated by our IT services assessment surveys and notifications to sensitive customers. in the handling of incidents and job-related requests, an average rating of 93.78% ●● Implementation of the module for approval was received. This means that our internal and management of urgent works. customers are satisfied or very satisfied with ●● Implementation of the mobility application the service provided throughout 2016. for consumer audits.
●● Implementation of a new system for managing authorisations and payment of travel expenses in Canal.
●● Implementation of information quality indicators in the Commercial Database.
116 2016 Annual Report Canal de Isabel II Innovation and development
Remote control and communications: the key to modern water management
In 1995 Canal de Isabel II was a pioneering measuring instruments. In addition, we had company in the development of remote 58 remote-controlled facilities from which a control systems for integral water cycle large number of operations are performed management. We currently have a complete in the facilities and networks (an average remote control system that allows us to know of 18 per day). The set of field systems in real time the hydraulic situation of supply controlled in 2016 had an availability rate of and sanitation infrastructures, the status of 98.91%. water quality, groundwater collection and other parameters. By the end of 2016, the Our fibre optic network reaches 636 remote control network monitored a total of kilometres and we have 163 radio links. The 1,940 remote stations from our Main Control average availability of the communications Centre (CPC) and managed a total of 28,005 network was 99.95% in 2016.
+ Information 2016 Milestones
●● Extension of the fibre optic network by 59 km
●● Integration of 15 WWTPs in the network Expansion of the telecommunications ●● Extension of Tetra network to 112 base stations network ●● Replacement of 6 analogue switchboards with VoIP
●● Network extension to 347 sites
●● 199 new facilities Extension of the remote control system ●● 5,028 new collectors (total 27,971)
+ Immediacy 2016 Milestones
Implementation of the mobile work order management system for:
●● Expert appraisal Improvements in incident management ●● Occupational safety and health
Implementation of a checkpoint management system
117 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Reliability + 2016 Milestones
●● Extension for calibrating flow metres up to 500 mm
Metre laboratory ●● Pressure gauge calibration
●● Performance of an audit to become a collaborating laboratory of the Spanish Metrology Centre.
Availability of ●● 8-point increase in the percentage of flow data availability in sectors (up to 94.6%) sector-specific data
Availability of instruments Availability of instruments above 98%.
Availability of the 99.94% reliability of the telecommunications network telecommunications network
+ Ability to act 2016 Milestones
●● Implementation of combined remote management in 2 WWPS/WWTP systems
●● Automation and remote control of: -10 new WWPS‘s Automation of facilities - 8 network lifts - 2 new regenerated water systems
118 2016 Annual Report Canal de Isabel II
+ Security 2016 Milestones
Securing of remote control and Relocation of the telecommunications network‘s redundant node communications
Installation of video surveillance Installation of video surveillance cameras in WWTPs cameras in WWTPs
2016 Milestones + Integration
Integration of Integration in a single tool of the operational management of areas that are remotely managed from information systems the control centre
OUR TECHNOLOGY AT THE SERVICE OF THE SAFETY AND HEALTH OF THE CITIZENS OF THE AUTONOMOUS COMMUNITY OF MADRID: TETRA PROJECT
In 2008, the Government of the Autonomous Community of Madrid entrusted Canal de Isabel II with the implementation of a modern and advanced technology digital mobile radiotelephony service called Digital Trunking, to guarantee and implement a fast, secure, coordinated and efficient communication service both within and between each of the security, emergency and rescue services in our Autonomous Community (firefighters, local police officers and BESCAM, medical emergencies, civil protection and road traffic). Currently there is complete coverage throughout the Community of Madrid and more than 4,000 terminals have been put into service.
In 2016 Canal installed 50 new terminals and 23 new radio base stations to expand the digital trunking network for emergency services in the Community.
119 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016 4.10 Sustainability and efficiency in management: a profitable company
The economic and social sustainability of public organisations plays an increasingly significant role in our growth and welfare model. Canal de Isabel II, as a 100% publicly owned “benchmark” company, has to ensure its economic sustainability to support confidence in the economic recovery and foster economic growth and job creation. We must be an efficient company in all our actions and offer society a social and environmental return.
Our economic performance
The economic sustainability of Canal de Interest expense on borrowings decreased Isabel II, as a 100% public “benchmark” by 3.8 million euros (17%) compared to the company, allows us to guarantee all our previous year, but the net financial result customers and users the provision of quality was slightly worsened by updates and the services at an affordable cost. application of accounting standards, leading to a slight decrease in profit before tax (to Canal creates value and generates cash in 226.2 million euros). a setting in which tariffs have been frozen. In 2016, tariffs were frozen for the second However, with the latest amendment to the consecutive year and the beneficiaries of Corporate Income Tax Law, deferred income “social tariffs” increased by 15.8%. However, taxes have been offset, and earnings after Canal‘s turnover was 866.8 million euros, a tax for 2016 amounted to 232.7 million moderate increase of 0.64% on the previous euros, practically the same amount as the year. previous year.
The moderation in ordinary expenses meant that EBITDA remained stable at 332 million euros.
120 2016 Annual Report Canal de Isabel II Sustainability and efficiency in management
Individual figures in millions of euros
+0.64% growth compared to 2015 +0.64% TURNOVER 866.8 Freezing of tariffs in 2016. (1.4% inflation) 861.3 +5.51 mill 15.8% “social tariff” beneficiaries (Exec+ Large Fam.) 866.8 Containment in consumption 2015 2016
+0.01% EBITDA Stable with respect to 2015 despite 332.0 +0.04 mill 332.0 “extraordinary”
Deterioration of investment in Third Deposit 332.0 Sports Facilities 2015 2016
-2.82% PRE-TAX 226.2 Interest Expenses decrease 3.8 mill. 232.8 -6.58 mill EARNINGS ( 17%)
Financial result worsens due to updates and application of accounting standards to 226.2 concession holders 2015 2016
+0.30% AFTER-TAX 232.7 EARNINGS 232.0 +0.69 mill Reversal of deferred tax for 9.4 mill.
232.7 2015 2016
121 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Sustainability and Efficiency in Management
Turnover growth
In 2016 we managed to maintain the trend In addition, water consumption has been in which consumption continues to decline reduced in block 1, increasing in blocks despite the growth of the population served. 2 and 3, which have the highest tariff Thus, with a slight increase of 1.34% in the coefficients. number of customers, we have achieved a turnover of 866.8 million euros, despite It is also worth highlighting the positive reducing the cubic hectometres derived for impact of the Cáceres concession, which, consumption by 1.24% and maintaining the having started operating in April 2015, billed freeze on tariffs. 2.3 million euros more in 2016 than in 2015.
Income growth despite declining consumption and the freeze on tariffs
TURNOVER Hm3 derived for consumption In millions of euros
497.7 491.5 -1.24% -2.1 mill +0.64%
+5.5 mill 866.8 2015 2016 861.3
Customers
1,429,812 1,448,928
+1.34% +2.8 mill
2015 2016
2015 2016
TARIFFS/CONSUMPTION
Freezing of Block 1 and tariffs Blocks 2 - 3
CÁCERES CONCESSION
Operation of the Cáceres Concession began in April 2015 +2,3 million euros in 2016
122 2016 Annual Report Canal de Isabel II Sustainability and efficiency in management
EBITDA Stability
The EBITDA of ordinary activity grew 5% to impairment of the investment in the Sports 348.7 million euros, although non-ordinary Facilities of the Third Deposit, remained expenses, mainly associated with the stable at 332 million euros.
EBITDA Stability
+ Operating Income - Operating Expenses = EBITDA
2015 906.6 (574.6) =332.0 2016 904.9 (572.9) =332.0
38.1 21.8
27.6 Work carried out by other companies 27.7 Personnel expenses Net turnover 128.5 Prov. for infrastructure replacement Other operating 41.6 External services and fees income Electric power 98.7 113.9 Taxes Other supplies 866.8 113.1 Other operating expenses
Growth of ordinary EBITDA (in millions of euros)
No extraordinary effects: Extraordinary effects Non-recurring EBITDA 348.7 11.2 5.5 332.0 332.0 -3.2 -5.0 -8.5
2015 Billing Improved exp. CHT resources Alcalá-City Council JV Third deposit 2016 margin (TUAS)
Increase Decrease Total
123 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Sustainability and Efficiency in Management
Asset soundness
The balance sheet shows the soundness of increasing reserves and the interim dividend the company‘s balance sheet, reaching a at the end of 2016. net worth of 3.1726 billion euros in 2016,
Balance sheet (in millions of euros) 31 December 2016
Non-current assets Current assets Net equity ASSETS 2015 2016 4,911.4 4,647.9 263.5 = Capital 1,074.0 1,074.0 LIABILITIES + Share premium 1,074.0 1,074.0 3,172.6 1,311.2 427.6 NET EQUITY Reserves 124.6 205.8 FY profit 232.0 232.7 Net equity Non-current liabilities Current liabilities Interim dividend (50.3) (119.4) Subsidies 696.7 705.5 Total net equity 3,151.0 3,172.6
Increase in: reserves and in the interim dividend at year-end 2016
Reduction of financial debt
Indebtedness stood at 982.2 million euros Moreover, the average financial cost fell at the end of the year, 11.36% lower than from 1.70% to 1.66%. in 2015 (a decrease of 125.8 million euros).
Of this reduction in financial debt, 102.3 million euros corresponded to long-term debt and 23.6 million euros to short-term debt.
124 2016 Annual Report Canal de Isabel II Sustainability and efficiency in management
Non-current assets Current assets
ASSETS 4,647.9 263.5 4,911.4 = LIABILITIES + NET EQUITY 3,172.6 1,311.2 427.6
Net equity Non-current liabilitiesCurrent liabilities
Average financial cost 1,108.0 982.2 125.9 102.3 861.3 -11.36% December 2015 December 2016 482.2 379.9 1.70% 1.66% 500.0 500.0
2015 2016 Short-term debt Bonds Long-term debt
Application of FY 2016 earnings Proposed application of Canal de Isabel II, S.A. profit In accordance with Article 274 of the Law Thus, after obtaining a profit of on Capital Companies, a figure equal to 10% 232,693,003.48 euros in 2016, the General FY profit: of the profit for the year will be allocated Shareholders‘ Meeting approved the to the legal reserve until it reaches at least following proposal for the allocation of 232,693,003.48 20% of the share capital. profit for the year.
Once the legal requirements were met, 65% of 31,867,499.33 the profit was allocated to dividends in 2016. 23,269,300.35
58,173,250.87 NOTE REGARDING THE FINANCIAL STATEMENTS FOR 2016 Due diligence of the directors
119,382,952.93 The Company‘s management and In parallel, and in order to reflect the directors have carried out an analysis true and fair view of the company‘s and assessment of the possible impacts net worth, financial position and results, that could arise from the preliminary the corresponding legal and economic Legal reserve (*) proceedings of Central Trial Court No. reports and actions were requested and Voluntary reserve 6 of the National High Court, aimed at carried out. Finally, an internal working Interim dividend ensuring that both the individual and group was set up to analyse impacts on Supplementary dividend consolidated financial statements reflect the annual accounts. (*) In accordance with Article 274 of the a true and fair view of the assets and Spanish Law on Capital Companies, which liabilities and the financial situation. Despite the efforts made, it cannot establishes that a figure equal to 10% of the reasonably be ruled out that, as judicial profit for the year shall be transferred to the Thus, both the Audit Committee and investigations progress, additional legal reserve until it reaches at least 20% of the company‘s General Management contingencies may arise that involve the share capital. It cannot be distributed. and Finance Department decided to new operational and financial risks, commission comprehensive statutory which could possibly have an impact on audits of the Group‘s investees, the Group‘s net worth, in which case regardless of the legal regulations in each it will be immediately recorded in the country. corresponding accounting documents.
125 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Sustainability and efficiency in management
We invest in the Autonomous Community of Madrid
Since its creation in 1851, Canal de Isabel II infrastructure and the proper management of has been key to facilitating the growth and supply and sanitation services have facilitated socio-economic development of the Autonomous the growth of municipalities and the introduction Community of Madrid. Our investments in of new economic activities in them.
Investments made
The investments carried out are in line with the investment made in 2016, with Canal the objective of guaranteeing a satisfactory being one of the companies that most level of operation, maintaining levels of invests in the region. production efficiency and competitiveness in all our areas of operation and adapting In 2016, our company invested 158.2 to new and increasingly demanding legal million euros in new or renovation works requirements in relation to the environment. and it also invested an additional 20.4 million euros in Madrid‘s municipalities In the 2014-2016 period, Canal de Isabel through supplementary quotas approved II invested 517.59 million euros in the by the Government of the Autonomous Autonomous Community of Madrid. Of this Community of Madrid. amount, 187.7 million euros correspond to
Investments in 2016 in millions of euros
WORKS AND SEWERAGE PROJECTS AGREEMENTS 158.2 0.3
OTHER ACCOUNTING INVESTMENTS IN ACQUISITIONS TOWNSHIPS FINANCED THROUGH 8.8 SUPPLEMENTARY QUOTAS 20.4
TOTAL 187.7
126 2016 Annual Report Canal de Isabel II Sustainability and efficiency in management
Breakdown by type of investment in 2016 Investments in Town Councils financed with supplementary quotas (in millions of euros)
2.22% 13.15% 20.03% 20.4 18.1 3.57% 12.99% 10.87% 4.76% 10.4 11.2 5.60% 7.43% 2013 2014 2015 2016 6.80% 6.17% 6.41%
Catchments and major pipelines Other items WWTPs Land and buildings Inv. in Town Councils financed Technical compliance w/supplementary quota Deposits Sanitation networks DWTPs Reuse networks Distribution networks Information and remote control systems
However, Canal also earmarked a total Over the 2014-2016 period, major investments of 118.6 million euros for the operation were made in new infrastructures and in and maintenance of infrastructures, which maintaining existing ones. In relative terms, results in an improvement in the efficiency out of every 100 euros that the people of of our services. Madrid have paid for water services during these three years, almost 38 euros were invested in improving service provision.
Distribution of operating and maintenance costs (millions of euros)
Total: 119.3 116.9 119.9 118.6
4.9 3.8 3.8 4.1
44.3 45.2 45.1 44.1
70.1 68.0 71.0 70.4
2013 2014 2015 2016
Operation of other production centres Operation of WWTPs Network operation and other maintenance
127 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Sustainability and efficiency in management
Projects and works to ensure the future development of the Projects in 2016 (number/percentage of total) Community Canal de Isabel II develops and processes the In 2016, the processing and drafting of 80 8/ general supply and sanitation infrastructure infrastructure projects was completed with 10.00% projects included in the planning forecasts a total projected construction budget of 48/ or required to maintain the service capacity 166.90 million euros. 60.00% of the facilities, as well as the design and 17/ management of the architecture and In 2016, work was undertaken on a total of 21.25% 1/ landscaping works carried out in our 143 projects (85 of which were renovations), 1.25% premises and buildings. and 68 new works with a total value of 55.81 million euros were awarded. The main works completed in 2016 by Canal are: 6/ 7.50%
Supply Sanitation Reuse SUPPLY Construction/architecture Connection of Torrelaguna - Pinilla systems Renovation of networks and other projects Pelayos de la Presa DWTP and deposits Zarzalejo Estación deposit New Galapagar deposit (Dehesa Vieja)
SANITATION Extension of the Villarejo de Salvanés WWTP (National Water Projects in 2016 (budget in Quality Plan-PNCA) millions of euros/percentage Extension of the Miraflores de la Sierra WWTP (PNCA) of total) Improvement of the treatment capacity of peat beds at the El Molar Sur WWTP (PNCA) Extension of the Galapagar-Torrelodones WWTP (PNCA) 60.74/ 35.78/ 36.39% 21.44% RECYCLING/REUSE Irrigation with reusable water in Torres de la Alameda Irrigation water supply with reused water to Torrejón de Ardoz 58.33/ 34.95%
10.23/ 1.82/ 6.13% OTHER Cogeneration of the Alcalá Oeste WWTP 1.09% (production of Cogeneration of the Torrejón WWTP electric power) Mini-hydroelectric power plant in Torrelaguna Supply Sanitation Reuse Construction/architecture Renovation of networks and other projects Canal contributes to creating and maintaining Based on the available information, Canal employment in the Autonomous Community estimates that in 2016, 3,372 indirect of Madrid, not only directly through the jobs were generated in the Autonomous maintenance of the workforce and new Community of Madrid in 171 of its hiring, but also through the indirect jobs construction and service contracts. generated as a result of the assets acquired and the activities and services we procure through our suppliers and contractors.
128 2016 Annual Report Canal de Isabel II Sustainability and efficiency in management
With our suppliers
Canal de Isabel II, as a public company comply with occupational risk prevention belonging to the Institutional Administration regulations. In addition, in order to promote of the Autonomous Community of Madrid, diversity and the entry into the labour market executes its contracts under the regulations of persons with disabilities, contractors with applicable to public sector contracts. more than 50 employees during the term of the contract are required to employ persons The contracts awarded by Canal comply with disabilities representing at least 2% of with the principles of freedom of access the workforce, in accordance with Royal to tendering, publicity and transparency of Legislative Decree 1/2013, of 29 November, procedures, non-discrimination and equal which approves the consolidated text of the treatment between candidates, mutual General Law on the Rights of Persons with recognition and proportionality. Disabilities and their Social Inclusion.
To access Canal contracting procedures, In general, subcontracting is permitted tenderers must be eligible to contract with under the terms established in the legislation the public sector, not being prohibited in force and in the conditions established in from contracting and accrediting the the specific administrative clauses of each economic-financial, professional andcontract subject to tender. The contracting technical solvency conditions determined. system ensures that subcontractors comply with both the legally established obligations Environmental requirements for suppliers and the requirements for contracting with include compliance with applicable the public sector. environmental regulations and with Canal‘s environmental policy. Contractors must also
Contracting by Canal Gestión and its Spanish investees is governed by the following laws:
Law 31/2007 of 30 October 2007 on procurement procedures in the water, energy, transport and postal services sectors.
Law on Public Sector Contracts (amended text approved by Royal Legislative Decree 3/2011 of 14 November).
In addition, each of the public enterprises has its own internal procurement rules.
129 4. BUSINESS AREAS. OUR PERFORMANCE IN 2016
Sustainability and efficiency in management
Awarding of contracts in 2016 In 2016, Canal de Isabel II awarded 231 26 contracts were awarded using the contracts totalling 372.60 million euros negotiated procedure (Law 31/2007) or through contracting procedures. Most of simplified procedure (Procurement Rules and them are directly linked to activities and Article 191 of the TRLCSP), representing 10.44 processes relating to engineering, operations per cent of the total number of procedures and energy. processed. The total amount of these procedures was 4,812,570 euros (1.25% of The Open Procedure is the procedure most the total amount processed in 2016). commonly used in Canal contracting. In this procedure, any prospective entrepreneur The negotiated procedure is used when any may submit a proposal, excluding any of the cases established in Article 59 of Law negotiation of the terms of the contract 31/2007 applies. The simplified procedure is with the bidders. The procedure has been used whenever any of the cases established used in 200 contracts processed in 2016, for it are met without publicity in Articles accounting for 95.07% of the total amounts 170 to 174 of the TRLCSP. awarded, totalling 384.23 million euros. It should be noted that only 5 of the In 2016, 18 management orders were contracts awarded by Canal de Isabel II, processed (7.23% of the procedures) which account for 0.65% of the tenders for those companies that, in accordance processed in 2016, were executed using with the provisions of Article 24.6 of the procedures other than those included in the Consolidated Text of the Public Sector legislation on public sector contracts. Contracts Law (TRLCSP), have the status of Canal de Isabel II‘s own instrumental means. In 2016, Canal de Isabel II‘s average payment The amount processed through these orders period to suppliers was 33.51 days. is 11.6 million euros, which represents 3.03% of the total awarded amount.
Amounts awarded by type of contract Amounts awarded by type of procedure (millions of euros/%) (millions of euros/%) 4.81/ 11.63/ 2.50/ 1.25% 99.61/ 55.81/ 3.03% 0.65% 26.73% 14.98% Works Open Services Orders to Grupo Canal Supplies companies 217.17/ Negotiated Other 58.29% 365.29/ 95.07%
130 2016 Annual Report Canal de Isabel II Sustainability and efficiency in management
Processing of procurement dossiers in Canal Gestión
Our internal procurement procedure has the following phases:
PHASE I: NEED AND The proposing area approves a Report on the Need and Suitability of the contract (INI), which explains SUITABILITY REPORT the need to be covered and the type of procedure to be followed.
PHASE II: APPROVAL The CEO approves, on the proposal of the Sub-Directorate for Procurement, the solicitation documents OF SPECIFICATIONS OR or the letter of invitation in simplified and negotiated procedures. LETTERS OF INVITATION
The tenders by open tender procedure of The award and formalisation of the contract, Canal de Isabel II, S. A. are published in including simplified procedures without prior and PHASE III: PUBLICATION the Contracting Portal of the Autonomous negotiated bidding, are published in the Contracting OF THE CALL FOR TENDERS Community of Madrid (company contractor Portal of the Autonomous Community of Madrid profile) and in the corresponding official media (company contracting profile) and, in addition, the depending on the nature and amount of the formalisation of contracts for an amount greater contract: Official Gazette of the Autonomous than 100,000 euros is published in the Official Community of Madrid, Official State Gazette and Gazette of the Autonomous Community of Madrid. Official Journal of the European Union. It is also published in the Canal de Isabel II, S.A. website The information on Canal de Isabel II, S. A. contracts (www.canaldeisabelsegunda.es/en/) is periodically sent to the Contracts Registry of the Autonomous Community of Madrid.
PHASE IV: RECEIPT AND At this stage, the Sub-Directorate for Procurement opening of economic proposals, technical ANALYSIS OF BIDS reviews the administrative documentation of envelopes are opened for the purpose of tenders submitted by tenderers. Tenders that do assessing the non-quantifiable criteria by simply not meet these requirements are not taken into applying formulas prior to the opening of consideration and the tenderers are informed economic proposals. of this fact when they open envelopes (in the opening of the technical envelope, if it is awarded Finally, the opening of the tenderers‘ economic by multiple criteria; in the opening of the economic bids is made in public. In tendering procedures envelope, if it is awarded at the lowest price). that are awarded on the basis of multiple criteria, the technical scores obtained prior to In tendering procedures that are awarded the opening of tenders are read in public. on the basis of multiple criteria, prior to the
PHASE V: EVALUATION The proposing service prepares the report on bids that are subject to an initial presumption of OF TENDERS AND AWARD abnormal or disproportionate value and the final evaluation report on the bids. The contracting OF THE CONTRACT board analyses both reports and issues an award proposal which is submitted to the contracting authority awarding the contract.
The contract is formalised within 15 days of notification of the award of the contract and after the PHASE VI: FORMALISATION successful tenderer has provided the corresponding guarantee. OF THE CONTRACT
131 5 GRUPO CANAL 2016 Annual Report Canal de Isabel II
Thus, back in the 1960s, Canal de Isabel of water (542 in Spain and 306 in Latin II began to build a group of investee America) and 46,095 kilometres of supply, The experience accumulated companies that, along with Canal de Isabel II, sanitation and regenerated water networks. by Canal de Isabel II in more constitute the modern-day Canal de Isabel II Business Group. At year-end, there were nearly 2.3 million than a century and a half supply contracts (86% of which are of management allows us By the end of 2016, the Group supplied domestic) in more than two hundred to contribute added value water to 10.05 million people (6.75 million municipalities, with a supply coverage rate through other activities in Spain and 3.30 million in Latin America), of 98.01% (99.62% in Spain). related to the water sector employing 6,690 workers and generating more than 6,500 indirect jobs. It had also in geographical areas other managed a total of 848 million cubic metres than the Autonomous Community of Madrid.
Population supplied per country (millions of inhab. /% of total) 0.19/ 0.03/ 1.88% 0.34% Canal de Isabel II Autonomous Community of 0.17/ Madrid 1.74% Other companies in Spain Colombia 2.90/ Ecuador 28.84% Brazil Peru 6.25/ 0.51/ 62.16% 5.04%
133 5. GRUPO CANAL
5.1. Grupo Canal: activities and geographical location
At the end of 2016, the Canal de Isabel II Business Group was made up of 23 operating companies, including Canal de Isabel II itself. The companies that make up the Group are engaged in three activities:
Management of the integral water cycle
In three Spanish autonomous communities, in three departments of Colombia, in Ecuador, in Peru and in Brazil.
Support services for the management of the integral water cycle
Such as sector consultancy and advice; civil engineering; operation of third-party plants; works and installation of connections and metres; purchase of supplies; commercial management of supply and sanitation; management of call centres or collection of fees and taxes. For the development of these activities, the Grupo Canal has companies in Spain, Colombia, Panama, the Dominican Republic and Brazil.
Other synergistic activities related to the management of the integral cycle
Such as power generation; telecommunications and information technologies; engineering, construction and civil architecture not related to water; waste management and urban cleaning. These activities are carried out by Group companies located in Spain, Colombia, Ecuador and Brazil.
134 2016 Annual Report Canal de Isabel II
Grupo Canal: main companies and geographical location
Management of the Support services for integral Telecommunications and integral water cycle water cycle management information technologies
Generation of Urban cleaning and urban Other electric power waste management activities
Spain
Canal de Isabel II Dominican Republic Canal de Isabel II Delegation in AAA Dominicana Cáceres Aguas de Alcalá UTE Canal Gestión Lanzarote Panama Hispanagua Inassa Panamá GSS Venture
Ecuador Colombia Canal de Comunicaciones Unidas Amagua Hidráulica Santillana Triple A Barranquilla Canal de Isabel II Inassa Ecuador Metroagua ASAA Riohacha Canal Extensia Peru R&T Gestión Integral de Suministros Aguas de Tumbes INASSA Brazil Amerika T.I. Fontes de Serra Triple A Barranquilla Emissão engenharia e construções
The main figures for the Canal de Isabel II Business Group at year-end 2016 were as follows:
10/8.7 3 6,690 million inhabitants 545 hm employees (3,416 in served (supply/ purified in the WWTPs Spain and 3,274 sanitation) in Latin America) 20 hm3 of regenerated water 1.1042 supplied billion euros in revenue
3 848 hm 203 collected for consumption million euros invested
Presence in 4 Autonomous Communities in Spain and in 6 Latin American countries.
135 5. GRUPO CANAL
G4-17 5.2. Grupo Canal: Population Served and Capacities in the Integral Water Cycle
To provide this type of activity, the Group has nine companies located in Spain (3), Colombia (3), Ecuador (1), Brazil (1) and Peru (1). At year-end 2016, these companies are:
●● Canal de Isabel II, S.A. is the parent ●● Avanzadas Soluciones de Acueducto y company of the Business Group and Alcantarillado S.A. E.S.P., or ASAA, is manages the integral water cycle in the responsible for supply and sewerage Autonomous Community of Madrid (179 services in the District of Riohacha, capital municipalities), 7 municipalities of of the Department of Guajira (Colombia). Castilla-La Mancha and 3 municipalities of Extremadura through our Delegation in ●● Aguas de Samborondón Amagua Cáceres, all in Spain. C.E.M., whose purpose is to distribute drinking water and provide sewerage ●● Aguas de Alcalá UTE, a temporary joint management, wastewater treatment and venture in which, in addition to Canal (50% reuse of regenerated wastewater services of the shares), AQUALIA holds a 50% stake. in Samborondón and Daule, towns that It is responsible for the supply and are located near Guayaquil (Ecuador). management of sewerage networks in the city of Alcalá de Henares (Madrid, Spain). ●● Fontes da Serra Saneamento de Guapimirim Ltda., a company belonging ●● Canal Gestión Lanzarote, S.A.U., which to the company Emissão Engenharia e manages the integral water cycle in the Construções. Fontes de Serra is the islands of Lanzarote and La Graciosa, in company that supplies the inhabitants of the Autonomous Community of the Guapimirim, in the State of Rio de Janeiro Canary Islands (Spain). It serves the (Brazil). population of the 7 municipalities of the islands. ●● Aguas de Tumbes supplies water to the city of Tumbes and 13 more municipalities ●● Sociedad de Acueducto, Alcantarillado in Peru. y Aseo de Barraquilla S.A. E.S.P., known as named Triple A Barranquilla, is the company in charge of managing the integral water cycle in the Colombian city of Barranquilla and 14 other municipalities in the Department of Atlántico in Colombia.
●● Metroagua S.A. E.S.P., company in charge of the supply and sewerage management of the Santa Marta District, in the Magdalena Department of Colombia. Its contract expired on 17 April 2017.
136 2016 Annual Report Canal de Isabel II
G4-17
Population and municipalities served in Spain
Population served Number of municipalities served (inhabitants) Company Geographic location
Supply Sewerage Purification Supply Sewerage Purification
Autonomous 6,245,118 5,498,097 6,458,497 173 134 179 Community of Madrid
Autonomous Canal de Isabel II Community of Castilla 11,793 4,250 7 1 La Mancha
Province of Cáceres 98,095 98,095 97,091 3 3 2 (Extremadura)
Alcalá de Henares Aguas de Alcalá UTE 195,907 195,907 1 1 (Madrid)
Islands of Lanzarote Canal Gestión and La Graciosa 200,853 141,818 141,818 7 7 7 Lanzarote (Canary Islands)
TOTAL SPAIN 6,751,766 5,933,917 6,701.56 191 145 189
Population and municipalities served in Latin America
Population served Number of municipalities served (inhabitants) Company Geographic location
Supply Sewerage Purification Supply Sewerage Purification
Barranquilla and 14 more municipalities Triple A 2,216,818 1,891,297 630,103 15 10 8 in the Atlántico Department (Colombia)
Santa Marta Metroagua 486,405 431,488 1 1 (Colombia)
Tumbes (Peru) and 13 Aguas de Tumbes 188,612 112,106 76,075 14 13 13 nearby municipalities
ASAA Riohacha (Colombia) 193,829 161,196 1 1
Samborondón and Amagua 174,869 138,896 138,896 2 2 2 Daule (Ecuador)
Fontes da Serra Guapimirim (Brazil) 34,648 1
TOTAL LATIN AMERICA 3,295,182 2,734,983 845,074 34 27 23
TOTAL GRUPO CANAL 10,046,948 8,668,900 7,546,730 225 172 212
137 5. GRUPO CANAL
G4-17
Canal Group: Technical information at FY 2016 end
Supply Spain Latin America Group Total
Number of reservoirs or catchments in rivers 16 9 25
Number of wells in operation 79 48 127
Number of seawater catchments 4 - 4
Sum of managed catchments 99 57 156
Number of DWTPs and desalination plants managed 20 8 28
Treatment capacity in millions of cubic metres per day 4.76 0.89 5.65
Kilometres of managed supply networks 20,217 5,295 25,512
Number of municipalities served in supply 191 34 225
Population served in supply (millions of inhabitants) 6.752 3.295 10.047
Sanitation Spain Latin America Group Total
Kilometres of sewerage networks managed 15,865 3,707 19,573
Number of pumping stations (WWPS‘s) managed 213 170 383
Number of wastewater treatment plants (WWTPs) managed 168 93 261
WWTP design flow rate (hm3/day) 3.28 0.21 3.49
Number of municipalities served in sewerage management 145 27 172
Population served in sewerage (millions of inhabitants) 5.934 2.735 8.669
Number of municipalities served in wastewater treatment 189 23 212
Population served in wastewater treatment (millions of inhabitants) 6.702 0.845 7.547
138 2016 Annual Report Canal de Isabel II
G4-17
Reuse Spain Latin America Group Total
Number of waste water regeneration plants 28 17 45
Kilometres of regenerated water networks 1,020 - 1,020
Number of municipalities served by the regenerated 27 2 29 water supply service
Volume of regenerated water produced in 2016 15.47 4.40 19.87 (million cubic metres)
139 5. GRUPO CANAL
G4-17 5.3. Grupo Canal: companies with other activities
Group companies: water management support services
This category includes Group companies that carry out activities related to the management of the integral water cycle, such as sector engineering and consultancy, the construction and operation of drinking water and wastewater treatment plants, works and installation of connections and metres, purchase of supplies for water supply, commercial management of supply and sanitation, call centre management or collection of fees and taxes.
To carry out these activities, at the end of 2016 the Group had companies in Spain, Colombia and the Dominican Republic, Panama and Ecuador (through Inassa‘s subsidiaries in these countries) and Brazil. These companies are:
●● Hispanagua, S.A.U., a company ●● Sociedad Interamericana de Aguas ●● Amerika Tecnologías de la created in 1995 by the partial y Servicios S.A. (hereinafter Inassa), Información, S.A.S., which since spin-off of Hidráulica Santillana. Its acquired in December 2001, was 2014 has been dedicated to the main objective is the construction, incorporated in 1996 as a company development and commercialisation maintenance and operation of engaged in providing services related of Amerika Software, a product that infrastructures related to water to the integral water cycle in provides a definitive and integral management, the operation of Colombia and other Latin American solution to public utilities companies, DWTPs and WWTPs and the countries. Inassa offers consulting designed by the water industry. Its provision of commercial services services in public utilities processes different modules cover commercial such as connection works or the and comprehensive and innovative IT management, technical management, installation of metres. According to solutions to drinking water and administrative and financial Spanish public sector contract law, sanitation utilities in Latin America. management and management this is Canal‘s own medium, so that control. practically all of its business activity is carried out for the Group‘s parent company in Spain.
●● The company R&T provides services ●● AAA Dominicana S.A., which began ●● Inassa Panamá, a delegation of the to the different companies of the its operation in the Dominican Colombian company Inassa, began Canal Group in Latin America. For Republic with the contract for its activities in 2011. The company companies in the water supply commercial management and provides advisory and operational sector, it is responsible for installation of metres in the western services for the commercial and commercial consulting and area of the city of Santo Domingo to technical management of companies management, the design and serve a population of almost 1.5 in the domestic utilities sector. construction of civil works, collection million inhabitants. In recent years, management (both in and out of AAA Dominicana S.A. has achieved court), the updating and assembly significant growth by expanding its ●● Inassa Ecuador is a delegation of of databases and software, human services in the commercial the Colombian company Inassa that centre contact services, document management of water services and in has been in charge of executing all management and courier services. the collection of fees and taxes. the activities inherent to the integral water cycle in that country, extending to infrastructure works, consultancy, technical assistance, design, project supervision management and environmental consultancy.
140 2016 Annual Report Canal de Isabel II
G4-17
●● GSS Venture, S.L is a company in ●● Emissão Engenharia e Construções, systems in facilities and is the main which Canal de Isabel II holds a 25% S.A. Ltda., headquartered in Rio de operator in the supply to the municipality minority stake. Its corporate Janeiro, is responsible for the of Guapimirim (Rio de Janeiro State) purpose is the provision of commercial management of supply through the company Fontes de Serra. telemarketing and customer service, and sanitation services in several developed through the telephone Brazilian states; carries out consulting network or any other telematic and sectoral engineering work; builds, means. GSS is the company that manages and maintains facilities and currently handles Canal de Isabel II‘s supply networks for other companies; customer service call centre. develops and maintains remote control
Other group companies: synergistic activities with the integral cycle Other activities
● Apart from the activities directly ● Information technology and In addition to operating companies related to the management of the telecommunications: Canal de with personnel, Grupo Canal has integral water cycle or with activities Comunicaciones Unidas, S.A.U. three other companies that only supporting the management of said (hereinafter CCU), is a company wholly hold shares. These are: cycle, the Canal de Isabel II Business owned by the Canal Group and Group carries out activities in synergy dedicated to the information technology ●● Canal Extensia, S.A.U., with the management of the integral and telecommunications sector. CCU established in 2001, which holds cycle with five of its companies. These has Canal de Isabel II as its main client the shares of all the Group‘s Latin activities include hydropower generation; and currently has other clients to whom American companies. telecommunications and information it provides mobile communications technology; waste management and services, such as the Autonomous ●● Soluciones Andinas de Agua, urban cleaning; and engineering and Community of Madrid. located in Uruguay, which was construction. These activities are formed in 2013 to hold 75% of performed by Group companies located ●● Solid waste management and urban the shares held by the Canal in Spain, Colombia and Brazil: cleaning: In addition to managing the Group in Emissão Engenharia e integral water cycle, Sociedad de Construções. ●● Hydroelectric production: Hidráulica Acueducto, Alcantarillado y Aseo S.A. Santillana S.A.U., which was acquired E.S.P. - Triple A has been providing all ●● AAA Ecuador, located in in 1965 by Canal de Isabel II of the the services related to solid urban Ecuador, which holds 70% of the company of the same name. The waste management and urban cleaning shares of Amagua. company was split in 1995, separating in Barranquilla since 1993, and in three the activities related to the integral other municipalities in the Department water cycle (for which Hispanagua was of Atlántico since 1997. created) from energy production activities. The company‘s main activity is the operation of eight hydroelectric power plants, with a total installed capacity of 34.85 megawatts. These plants take advantage of the waterfalls existing in Canal de Isabel II reservoirs in the Autonomous Community of Madrid.
141 5. GRUPO CANAL
5.4. Group companies workforce
At year-end 2016, the aggregate workforce of all Group companies was 6,690 in 7 countries. Of these, 51.1% worked in Spain and 48.59% in Latin America. The parent company‘s workforce accounts for 38.7% of the Group‘s total.
SPANISH 2016 2016 COMPANIES Employees LATIN AMERICAN COMPANIES Employees
Canal de Isabel II INASSA (Colombia, Ecuador (Madrid and Cáceres) 2,590 and Panama) 182
Aguas de Alcalá UTE 72 Triple A Barranquilla 889 (Colombia) Canal Gestión Lanzarote 267
Hispanagua 419 Metroagua (Colombia) 112
Hidráulica Santillana 16 ASAA (Colombia) 89
Canal de Comunicaciones Unidas 52 R&T (Colombia) 56
SUM SPAIN 3,416 Amerika TI (Colombia) 48
Amagua (Ecuador) 83
AAA Dominicana (Dom. Rep.) 231
Emissao and Fontes da Serra (Brazil) 1,405
Aguas de Tumbes (Peru) 179
SUM LATIN AMERICA 3,274
142 2016 Annual Report Canal de Isabel II
5.5. Consolidated group results in 2016
In 2016, the ordinary income of Canal de EBITDA remained steady at 375.6 million Isabel II Business Group companies reached euros and profit after tax for 2016 increased 1.1042 billion euros, 1.48% less than in 9% to 245.6 million euros. 2015. This is mainly a consequence of the depreciation in the exchange rate of local currencies.
Consolidated figures in millions of euros
-1.48% Average exchange rate depreciation in local 1,104.2 ORDINARY currencies 1,120.9 -16.62 mill INCOME Decreased activity in some companies 1,104.2 Triple A Barranquilla 2015 2016
-0.65% EBITDA 4.4% without considering “extraordinary” 378.1 -2.45 mill 375.6 Emissao goodwill impairment 375.6 Canal sport facilities 2015 2016
PRE-TAX +2.08% +4.94 mill EARNINGS 237.0 241.9 Best fin. result in 8.8 mill
Better impact of exchange differences
241.9 2015 2016
AFTER-TAX +8.91%
EARNINGS 225.6 +20.09 mill 245.6 Reversal of deferred tax liabilities Canal
Group tax credits
245.6 2015 2016
143 5. GRUPO CANAL
Consolidated revenues are affected by the depreciation of the Colombian peso
In 2016, the Canal de Isabel II Group In other Group companies there were achieved consolidated ordinary revenues of decreases, although with little weight over 1.1043 billion euros. the total, such as in INASSA due to the decreased activity of branches in Panama At the consolidated level, the Group‘s parent and Ecuador, or the decline in revenues company, Canal de Isabel II, increased from Emissao, which reduced its portfolio consolidated revenues by 5.5 million euros of projects, selecting them based on their to 866.8 million euros, which represents economic viability and abandoning those more than 78% of the Group‘s total. The with lower profit yield or doubts about their next Group company with an impact on this collectibility. line item is Triple A in Barranquilla, which contributed 142 million euros (12.9% of the In Spain, Lanzarote‘s turnover also fell due consolidated total). to the loss of service to the Montaña Roja residential estate, which accounted for 8% In 2016 there was a decline in ordinary of its billing in 2015. income, mainly due to the 10% devaluation in the average Colombian peso exchange As a result, total consolidated revenues rate between 2015 and 2016. In its local decreased slightly this year, by 1.48%. currency, Barranquilla‘s Triple A revenues increased 4.1% over the previous year.
Consolidated revenues are affected by the depreciation of the Colombian peso (In millions of euros)
Total: 1,120.9 1,104.2 +5.5 Canal de Isabel II, S.A. -1.48% 259.6 -16.6 mill 237.5 -20.6 861.3 866.8 Grupo Canal Extensia, fundamentally because of:
18.3 Depreciation average exchange rate 2015 2016 10.5 Reduced activity in Inassa, Canal de Isabel II Emissao and RyT Subsidiaries +8.2 Triple A Barranquilla and others
-1.5 Rest of Spanish investees (Mostly Canal Gestión Lanzarote due to Montaña Roja residential estate)
144 2016 Annual Report Canal de Isabel II
Consolidated EBITDA
The improvement in the operation of the Most of the Group‘s EBITDA corresponds to business itself, with improved operating the activities of the parent company, Canal profit and collectibility rates, led to a 4.5% de Isabel II, which contributes 331.4 million increase in consolidated EBITDA of ordinary euros, accounting for 88.2% of the total. activity to 394.7 million euros. However, Of note among the investees is Triple A in non-recurrent expenses, mainly associated Colombia, which contributed 33.9 million with the impairment of the investment euros (9.03% of the consolidated Group in Emissao and the Third Deposit Sports EBITDA). Facilities, kept it stable at 375.6 million euros.
Growth of ordinary EBITDA (in millions of euros)
No extraordinary effects: EBITDA 394.7 Extraordinary effects Non-recurring 11.5 9.4 378.1 375.6 -8.2 -4.3 -8.5 -2.4
2015 Exchange rate Improved Prov. customers EMISSAO goodwill Third deposit Other impairments 2016 operating margin impairment Canal and prov.
Increase Decrease Total
Consolidated EBITDA (in millions of euros)
33.9 3.7/ 40.5/ 1.0% 10.8%
5.1 2.8 1.9 1.3 2.2 1.5 1.4 0.1
-3.0 -1.6 -1.4 331.4/ 88.2% RyT CCU Inassa Others Canal de Isabel II Hispanagua
AAA Ecuador Canal Extensia Group Canal Extensia C. G. Lanzarote AAA Dominicana AAA Barranquilla Spanish investees Emissão and Fontes Hidráulica Santillana
145 5. GRUPO CANAL
Consolidated net assets
The consolidated balance sheet, which The positive result contributed by the investee shows the Group‘s equity situation, companies to consolidated equity is worthy continues to be sound, with consolidated of note, although the application of different equity of 2.4274 billion euros at year-end accounting standards means that consolidated 2016. equity is lower than individual equity.
Consolidated balance sheet (in millions of euros) 31 December 2016
Non-current assets Current assets Net equity ASSETS 2015 2016 5,091.3 4,641.4 449.9 Capital 1,074.0 1,074.0 = Share premium 1,074.0 1,074.0 LIABILITIES + 2,427.4 2,103.4 560.5 NET EQUITY Reserves 124.6 205.8 FY profit 232.0 232.7 Net equity Non-current liabilities Current liabilities Interim dividend (50.3) (119.4) Subsidies 696.7 705.5 Total net equity 3,151.0 3,172.6
Net equity... from individual to consolidated (in millions of euros)
3,172.6 8.9 19.9 29.9
-15.8 -82.6 2,427.4
-705.5
Individual equity Contributions to Consol. reserves Non-controlling Conversion Diff. IFRS adjustments Reclassification of Consolidated Group companies‘ Group companies interest subsidies assets earnings
Increase Decrease Total
146 2016 Annual Report Canal de Isabel II
Reduction of financial debt In 2016 we reduced debt by 8.7%. At the consolidated level, the reduction in It is also worth highlighting the decrease in indebtedness stood at 1.0829 billion euros the Net Financial Debt/EBITDA Ratio, which at year-end (8.70% less than 2015). has fallen by 24% in the last 2 years and which places us among the companies with the lowest ratio among European companies in the sector.
Consolidated balance sheet (in millions of euros)
Non-current assets Current assets
ASSETS 5,091.3 4,641.4 449.9 =
LIABILITIES + 2,427.4 2,103.4 560.5 NET EQUITY
Net equity Non-current liabilities Current liabilities
Average financial cost Indebtedness 1,186.1 1,082.9 149.2 137.2 861.3 -8.70% 536.9 December 2015 December 2016 445.7 2.12% 2.44% 500.0 500.0
2015 2016 Short-term debt Long-term debt Bonds
Net Financial Debt/EBITDA Ratio
3.4 The main European -24% companies in the sector have a Net Financial Debt/ EBITDA ratio ranging 2.7 2.6 from 2.4x to 7.2x
2014 2015 2016
147 ABOUT THIS REPORT 2016 Annual Report Canal de Isabel II
This report is intended to reflect the actions and commitments of Canal de Isabel II G4-23 The Report has been throughout 2016. Canal de Isabel II‘s 2016 prepared following the Annual Report combines information mainly In contrast to previous years, the 2016 indications of the G4 Guide from the parent company and part of that Annual Report focused mainly on Canal de provided by Canal Group companies. This for the preparation of Isabel II‘s activity in the Autonomous integration has been carried out following Community of Madrid. Ggrupo Canal sustainability reports by the current international trends in the business companies are present in section 5 of the Global Reporting Initiative world regarding the need for the information report, their main figures are included in (GRI) provided by companies to the different Appendix 3 and the Group‘s key performance stakeholders with whom they interact to indicators are shown in Appendix 2. incorporate the most significant aspects, so that readers can have a real and integrated Another important change is that the report view of the current performance and future was drafted in parallel with the beginning of potential of organisations. a strategic reflection process carried out by Canal since June 2016. For this reason, the The report has been prepared in accordance structure of the report was built on the basis with the indications of the G4 Sustainability of the 10 strategic action areas defined at Reporting Guide of the Global Reporting the beginning of this process by Canal. Initiative (GRI) and includes detailed information on most of the contents recommended therein. It is the intention of G4-22 G4-23 Canal to continue to prepare annual reports based on this standard during the coming The scope of the information included in the fiscal years, using any new updates report mainly includes Canal de Isabel II and proposed by the GRI. The report includes those Group companies in which Canal those indicators established in the GRI G4 holds a majority interest, had personnel and Guide that illustrate the material aspects were active in 2016. The only exception is that the company has determined for 2016. Metroagua since, despite the fact that Grupo A detailed list of them and their location can Canal holds a minority percentage of the be found in the report at the end of this shares, we consider it important to include chapter (and in Appendix 5). We believe that this company within the scope of information the 2016 Annual Report was prepared in due to the technical representative influence accordance with G4 in its Comprehensive exercised in it in 2016. Also included in the option. scope of the report are the programmes and main activities carried out by our foundation The contents of this report have also been in Spain (Fundación Canal). independently verified by Canal de Isabel II‘s current auditors for 2016 (KPMG), attaching This report generally presents the the verification report that includes its scope information with at least two comparative and the results obtained (see Appendix 5). reporting years (2015 and 2016). In relation The criterion for choosing the verifying to the quantitative information from 2014 to company was, both this year and in the 2016, in some cases there have been previous years, its capacity as auditor of the changes of criteria when interpreting the annual accounts of our parent company. data, which led to some modifications with The information verified by the auditor does respect to the data that were published in not include the data of the Peruvian previous years. company Aguas de Tumbes, incorporated into Grupo Canal in the second half of 2016, whose information has not yet been entered into the Group‘s information systems.
149 ABOUT THIS REPORT
In general, all indicators were calculated for The data contained in the report correspond the Group by aggregating company data to the activity between 1 January and without taking into account the percentage 31 December for each of the reporting years. For any questions or additional of the Group‘s stake in each one‘s equity The data were compiled from the Canal information related to this report, (aggregated data), with the sole exception Group companies‘ information systems in please contact us at: of consolidated economic data. This was January 2017. All this information may be atenció[email protected] done to ensure the consistency of the data modified in the future due to subsequent published in the Group‘s consolidated events, changes or improvements in the financial statements. Values in euros were accounting systems of the parameters used calculated using the average exchange rates to construct the GRI indicators. applied in the income statement of the Group‘s consolidated financial statements.
Process of materiality and results: Material features and coverage
G4-18 G4-20 G4-21 G4-27
As described in the previous section, the process we have followed to determine the G4-26 context of sustainability, the contents of the report and the coverage of each aspect, took Also during 2016, a participatory process place in parallel with the beginning of Canal was initiated to obtain the opinion of the de Isabel II‘s Strategic Reflection process different participating agents (clients, in 2016, which will culminate in 2017. For employees, social agents, suppliers this process in mid-2016, representatives or regulators). We invited everyone to from the different areas of the company participate in our reflection process, so were selected and an internal working we held up to 11 focus groups to know committee, the Advancement Committee, their opinions and expectations about was established to work together with our company, and we also interviewed the Management Committee to define the leading members of universities, companies, company‘s main areas of strategic action, municipalities and citizens‘ associations. values, mission and actions. Based on all these contributions, the main material aspects for the company were defined, resulting in a set of strategic action areas that will be the basis for the development of Canal‘s strategy throughout 2017. The defined areas and the material aspects of each of them are as follows:
150 2016 Annual Report Canal de Isabel II
Material aspects of management in each area of action
Strategic action areas at Canal de Isabel II
Financial sustainability Efficient use of Alignment of debt to Greater efficiency in
and management economic resources the strategy internal processes efficiency
Innovation and Innovative strategy Innovation and internal Digital transformation of Positioning as an development support development Canal innovative company
Talent, Commitment and sense Promotion of Workforce adapted to commitment and of belonging by the professional Employee safety changing needs health of our workforce management activities professionals
Transparency, Good Governance Good Corporate Maximum transparency Commitment to society and Commitment Governance in management to society
Commitment and Customer experience Intelligent metres and Improved business
proximity to the culture new billing systems processes user
Collaboration and Cooperation with Closer ties to town halls revitalisation of the Excellence in sewerage the municipalities and residential estates municipalities of Sierra of Madrid Norte
Environmental Support for sustainable Adapting to climate Promotion of the circular Efficiency in purification initiatives of quality and change economy energy efficiency stakeholders
Reinforced physical Personal safety Information security Service continuity security of facilities
Improved network Drinking water Improved water quality New treatment operation and at source technologies quality maintenance processes
Maximum efficiency Guaranteed Extension of the supply Efficient management of in the use of existing of regenerated water demand supply resources
Coverage of material aspects Internal Mixed (internal-external) External
151 ABOUT THIS REPORT
The analysis conducted by Canal, based on the range of areas of action, about the importance G4-27 of each of them for the main elements of its value chain (both inside and outside the organisation) is shown below.
ENVIRONMENTAL MANAGEMENT REUSE SOCIETY SUPPLIERS EMPLOYEES TREATMENT CUSTOMERS CATCHMENT DISTRIBUTION PURIFICATION OTHER SERVICES ECOLOGICAL ORG. SEWERAGE SYSTEM
Guaranteeing supply
Guaranteeing the quality of water for consumption
Assuring service continuity
Boosting environmental quality and energy efficiency
Developing cooperation with the municipalities of Madrid
Reinforcing commitment and proximity to the user
Enhancing transparency, good governance and social commitment
Promoting our professionals‘ talent, commitment and health
Leading innovation and development
Maintaining management sustainability and efficiency
152 2016 Annual Report Canal de Isabel II
The following table shows the 10 areas of strategic action established by Canal de Isabel II, G4-17 G4-19 indicating which sections of the report deal with the material aspects related to these areas.
Sections of the 2016 Annual Report Madrid efficiency professionals development Innovation and Governance and and health of our Cooperation with Commitment and and management Service continuity Guaranteed supply Transparency, Good Talent, commitment the municipalities of proximity to the user and energy efficiency Environmental quality Drinking water quality Financial sustainability Commitment to society
1 Our company Main figures in the 1.1. Autonomous Community of Madrid 2016
Our business: the integral
1.2. water cycle
1.3. Organisation of our company
2 Our context and future challenges
2.1. The value of water
Context in which our sector
2.2. operates internationally
2.3. Us and our sector in Spain
Our main challenges for the 2.4. future
3 Our mission and commitments Canal‘s mission, values and
3.1. commitments
3.2. Our stakeholders
Communication channels
3.3. with our stakeholders
4 Strategic areas of action: our performance in 2016 Guaranteed supply: water for
4.1. everybody, every day
Guaranteeing quality: the
4.2. best water
Service continuity: reliable
4.3. service
Continued
153 ABOUT THIS REPORT
Continued
G4-17
Sections of the 2016 Annual Report Madrid efficiency professionals development Innovation and Governance and and health of our Cooperation with Commitment and and management Service continuity Guaranteed supply Transparency, Good Talent, commitment the municipalities of proximity to the user and energy efficiency Environmental quality Drinking water quality Financial sustainability Commitment to society
Environmental quality and 4.4. energy efficiency: we take care of your environment
Municipal cooperation:
4.5. building our region
Commitment to users: at 4.6. your side, for anything you may need
Transparency, governance and social commitment:
4.7. the company of all the people of Madrid
Canal‘s professionals:
4.8. empowering our people
Innovation and development: 4.9. at the cutting edge of our sector
Sustainability and efficient 4.10. management: a profitable company
5 Grupo Canal Grupo Canal: activities and
5.1. geographical implementation
Canal Group: population 5.2. served and capabilities in the integral water cycle
Grupo Canal: Companies with
5.3. other activities
5.4. Group company workforce
Consolidated Group financial
5.5. results in 2016
154 2016 Annual Report Canal de Isabel II
Legal information about Canal de Isabel II, S. A. G4-17 and consolidated information about Canal and its dependent companies
The entities included in the organisation‘s consolidated financial statements can be found in the documents listed below (all available on Canal‘s website – www.canaldeisabesegunda.es/en/)
●● Independent audit report of Canal de ● Independent audit report of the accounts Isabel II‘s accounts. of Canal de Isabel II and dependent companies. ●● 2016 consolidated annual accounts, Annual Report and Management Report ●● 2016 consolidated annual accounts, Annual of Canal de Isabel II, S. A. Report and Management Report of Canal de Isabel II and dependent companies.
155 APPENDICES
APPENDIX I DETAILED STATISTICS ON CANAL DE ISABEL II IN THE AUTONOMOUS COMMUNITY OF MADRID (2014-2016).
APPENDIX II APPENDIX III APPENDIX IV
APPENDIX V 2016 Annual Report Canal de Isabel II
Management of the integral water cycle
Supply: natural contributions of rivers to reservoirs in millions of cubic metres
BASIN 2014 2015 2016 Lozoya 400.30 247.69 346.81 Jarama 189.95 102.96 152.17 Guadalix 46.83 23.89 46.47 Manzanares 127.00 71.72 117.05 Guadarrama - Aulencia 33.19 23.34 39.52 Alberche (Cofio-Morales) 25.12 11.26 28.44 Sum of annual contributions 822.39 480.86 730.46
Percentage vs historical mean (764.8) 7.53% -37.13% -4.49%
Supply: rerouted water for the consumption of reservoirs and catchments
2014 2015 2016
Canal Reservoirs 450.79 454.25 437.17
Lozoya Basin 228.49 186.30 202.22
Pinilla 3.21 3.32 3.15
El Villar 25.56 34.72 34.24
El Atazar 199.72 148.25 164.83
Jarama Basin 65.32 84.50 74.77
El Vado 65.32 84.50 74.77
Guadalix Basin 26.70 29.90 22.62
Pedrezuela 26.70 29.90 22.62
Manzanares Basin 49.96 64.93 46.31
Navacerrada 12.76 11.55 11.02
Santillana 37.20 53.38 35.29
Guadarrama - Aulencia Basin 77.39 85.57 88.23
La Jarosa 16.75 14.01 14.06
Valmayor 60.64 71.56 74.17
Alberche (Cofio - Morales) Basin 2.93 3.05 3.01
La Aceña 2.10 2.18 2.08
Los Morales 0.83 0.87 0.93
(Continues on next page)
157 APPENDIX I
(Continuation)
Supply: rerouted water for the consumption of reservoirs and catchments
Other catchments 42.64 43.43 54.31
Groundwater 8.29 7.42 6.60
Weir at Pozo de los Ramos 8.11 3.10 8.77
La Parra weir 0.00 0.00 0.00
Picadas reservoir 22.21 32.91 38.50
San Juan - Majadahondaimpulsion 0.00 0.00 0.00
San Juan - Rozas de Puerto Realimpulsion 0.00 0.00 0.00
San Juan - ETAP Pelayos de la Presaimpulsion 0.00 0.00 0.43
Tagus River (Tagus DWTP ) 4.03 0.00 0.00
SUM WATER REROUTED FOR CONSUMPTION BY RESERVOIRS AND CATCHMENTS 493.43 497.67 491.48
Treatment and distribution figures
TREATMENT 2014 2015 2016 Volume of water treated in DWTPs (hm3) 489.75 494.84 489.19 Number of drinking water treatment plants (DWTPs) 13 13 14 Treatment capacity of drinking water treatment plants 4.57 4.52 4.55 (hm3/day) DISTRIBUTION 2014 2015 2016 Number of major pipelines 23 23 23 Number of major regulating reservoirs 33 33 33 Number of small reservoirs 288 288 291 Number of major lifting stations 21 21 22 Number of minor lifting stations 118 120 109 Length of managed network at end of period (km) 17,346 17,366 17,434
Sewerage network figures
2014 2015 2016 Kilometres of sewerage networks managed 13,854 14,504 14,841 Large collectors and emissaries (km) 785 822 823 Municipal sewerage networks (km) 13,069 13,682 14,018 Number of wastewater pumping stations (WWPS) 126 125 133 No. of buffering basins and storm tanks managed 63 63 65 Capacity of storm tanks managed (hm3) 1.47 1.47 1.48
158 2016 Annual Report Canal de Isabel II
Wastewater treatment figures
2014 2015 2016 Number of WWTPs in service managed 156 156 157 Water purified in WWTPs (hm3 per year) 493.79 458.16 487.27 Treatment capacity (million inhab. equivalents) 17.34 17.53 17.57 Design flow rate (hm3 daily) 3.20 3.22 3.23 Percentage of treated volume by plant type Plants based on soft technologies N/A 0.38% 0.43% Plants with primary treatment N/A 0.00% 0.00% Plants with primary and secondary treatments N/A 56.64% 55.95% Plants with primary, secondary and tertiary treatments N/A 42.99% 43.62%
Regenerated wastewater reuse figures
2014 2015 2016 Number of regenerated water plants in service 18 21 23 Production capacity of plants (m3 per day) 287,390 308,126 308,126 Length of in-service reuse network (km) 421.00 493.33 511.93 Number of in-service reuse tanks 33 35 63 Volume of regenerated water produced (hm3 per year) 11.83 12.89 12.41 Total irrigated surface area (ha) 1,943.59 1,912.70 2,374.05 Number of municipalities with reuse infrastructures 18 22 22 Number of irrigated municipal green spaces 164 215 218
159 APPENDIX I
Us and our sector in Spain
Comparison between some figures for Canal de Isabel II and industry data from theSURVEY OF DRINKING WATER SUPPLY AND SANITATION IN SPAIN 2014, published by AEAS in 2016.
SECTOR CANAL DE 2014 PARAMETERS ISABEL II CANAL VERSUS THE SECTOR (AEAS 2014 DATA) Canal accounts for 0.42% of the Urban water sector as a percentage of GDP 0.62% 0.08% Autonomous Community of Madrid's GDP Turnover (millions of euros) 6,479 830.7 12.82% of the sector's turnover More than Direct employment (people) 2,427 9.33% of sector employees 26,000 23 percentage points less than the Number of permanent employees out of the total 93% 70% sector Employee training (million hours/year) 1.2 0.12 10% of the entire sector's total hours Price of domestic water (euros/m3 - excluding VAT) 1.77 1.47 16.95% below the average Water vs. average total expenditure of Spanish households 0.90% 0.75% 16.22% less With 1 euro cent I get... (litres) 5.6 6.8 1.2 litres more Operator investments (million euros) 1,400 176 12.57% of the sector's investments Consumption (litres per inhabitant/day) 139 124 10.79% below the average Number of DWTPs 1,300 13 1% of the sector Water supplied annually (hm3) 4,231 493 11.66% of the sector Distribution - number of deposits 11,000 321 2.92% of the total Number of metres (millions) 21 1.5 7.14% of the sector Supply network (km) 225,000 17,346 7.71% of the total Supply network (m/inhabitant) 4.8 2.8 41.99% less than the sector Sewerage network (km) 165,000 13,854 8.40% of the sector Sewerage network (m/inhabitant) 3.6 2.5 30.16% less than the sector Number of storm tanks 450 65 14.44% of existing storm tanks More than Number of WWTPs 156 7.80% of existing WWTPs 2000 Purified water annually (hm3) 4,097 493.78 24.69% of the total Renovation of supply networks (ideal 2%) 0.90% 0.82% Similar to the sector Supply networks over 30 years old 41% 40.19% Similar to the sector Supply networks between 15 and 30 years old 30% 22.18% 7 percentage points less than the sector 8 percentage points better than the Supply networks less than 15 years old 29% 37.23% sector
160 2016 Annual Report Canal de Isabel II
SECTOR CANAL DE 2014 PARAMETERS ISABEL II CANAL VERSUS THE SECTOR (AEAS 2014 DATA) Renovation of sanitation networks (ideal 2%) 0.60% 0.13% 78% less than the sector Sanitation networks over 30 years old 40% 99.87% Much worse than the sector Sanitation networks between 15 and 30 years old 34% 0% Sanitation networks less than 15 years old 26% 0.13% Much worse than the sector 28 percentage points more than the Water treated with at least biological treatments 71% 99.86% sector Regenerated water production (hm3) Almost 400 11.83 2.96% of the total Reuse (% of supplied water) 9% 2.4% 73% below the sector Water reused in agriculture 41% 0% Water reused in gardens/leisure 31% 79.88% All uses are urban or industrial Water reused in industry 12% 20.12% Other reused water uses 16% 0% Destination of sewage sludge for agriculture, gardening 79% 99.69% Much higher than the sector and forestry. Destination of sewage sludge for incineration 11% 0.31% Much lower than the sector Destination of sewage sludge for landfill/dumpsite 10% 0.00% Nothing is dumped Complaints from sector customers 1.05% 1.92% 82% more than the average Of which, due to billing errors 50% 78.05% 56.10% more than the sector Of which, metre reading service 13% 1.85% Far below the sector average 23 percentage points more than the Claims resolved in favour of the customer 42% 65.92% sector Customers with letter of services with financial 59% 100% compensation All customers covered by letter of Customers with letter of services without financial 26% 0% services with compensation compensation No letter of services 15% 0% Population residing in municipalities with social action 90% 100% All customers in all municipalities mechanisms (tariff allowances or solidarity funds) Domestic users benefiting from these mechanisms 4.50% 5.24% Higher than the sector Of which, tariff allowances 40.45% 100% Of which, solidarity funds 25.84% 0% All have tariff allowances Of which, a combination of the two 33.71% 0%
161 APPENDIX I
Efficient Resource Management Figures
Figures in the fight against water fraud
2014 2015 2016 Number of reports received on possibly fraudulent events 10,389 9,317 6,490 Number of irregularities taken before the courts 77 75 80 Amount of water subject to lawsuits (m3) 642,115 782,449 418,262 Estimated amount of water from convictions (m3) 3,259,829 5,121,099 5,584,013 Total m3 of water accounted for in complaints/convictions 3,901,944 5,903,548 6,002,275 Revenue from judicial settlements (euros) 311,914 1,270,809 311,943 Revenue from penalty proceedings (euros) 419,097 439,945 12,900 Total revenue from actions against fraud (euros) 731,011 1,710,754 324,843 Economic valuation of fraud claimed in court (euros) 930,816 1,120,880 609,794 Number of penalty proceedings initiated 6,397 2,427 459
Supply network fault statistics
2008 2009 2010 2011 2012 2013 2014 2015 2016 Network length 14,442 15,044 15,512 15,861 17,087 17,160 17,346 17,366 17,434 (in km at 31 December) Number of network 3,364 3,434 3,094 2,861 2,549 2,363 2,487 2,384 1,985 breakages per year Breakage rate per km 0.23 0.23 0.20 0.18 0.15 0.14 0.14 0.14 0.11 Number of connections 605,635 627,785 634,226 634,600 644,099 647,981 680,137 685,286 688,789 (at 31 December) Number of breakages in 8,808 9,310 8,733 7,792 7,671 6,836 6,102 6,493 5,126 connections per year Breakage rate per 100 1.45 1.48 1.38 1.23 1.19 1.05 0.90 0.95 0.74 connections
162 2016 Annual Report Canal de Isabel II
Data on losses and self-consumption by hydrological years
HYDROLOGICAL YEARS 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 Water rerouted for consumption 541.06 537.42 539.35 497.16 494.57 499.10 489.01 (millions of cubic metres) Estimation of the real losses in adduction and distribution (% of 6.90 6.13 7.30 6.63 5.50 5.51 3.45 water rerouted for consumption) Hidden distribution network losses (% of water rerouted for 6.52 4.92 5.65 4.97 3.69 3.89 1.98 consumption) Canal self-consumption (% of 0.73 1.02 0.71 0.78 0.99 1.08 1.02 water rerouted for consumption) Self-consumption (in millions of 3.93 5.47 3.85 3.89 4.93 5.37 4.98 cubic metres)
163 APPENDIX I
Water quality figures
Annual summary of the types of checks performed
2014 2015 2016 Water at source/raw and before distribution 26,481 29,056 28,947 Distribution network 21,073 21,671 21,301 Automatic surveillance 1,041,677 1,494,565 1,636,067 Purified water 7,399 6,262 6,519 Regenerated water 4,855 5,316 7,265 Sewerage studies 431 610 536 Discharges 86 110 100 Inspections by official bodies 241 529 694 Viruses 94 88 90 WWTP sludge 83 Other 846 1,034 738 Sum of checks performed for Canal 1,103,183 1,559,241 1,702,340 Performed for other agencies or delegations 656 691 715 Sum of checks performed for Canal and third parties 1,103,839 1,559,932 1,703,055
Annual summary of analysed samples
2014 2015 2016 Water at source/raw and before distribution 465,543 476,492 476,719 Distribution network 360,194 372,838 370,485 Automatic surveillance 6,780,529 9,781,677 10,981,881 Purified water 60,276 53,931 59,902 Regenerated water 27,994 29,874 34,066 Sewerage studies 5,201 8,832 8,494 Discharges 1,043 1,338 1,399 Inspections by official bodies 1,435 3,097 4,064 Viruses 188 176 180 WWTP sludge 1,086 Other 5,868 8,841 7,759 Sum of checks performed for Canal 7,708,271 10,737,096 11,946,035 Performed for other agencies or delegations 15,352 16,551 16,165 Sum of checks performed for Canal and third parties 7,723,623 10,753,647 11,962,200
164 2016 Annual Report Canal de Isabel II
Efficient sanitation figures
Management of sewerage and urban drainage networks
CLEANING AND INSPECTION 2015 2016 Cleaning of scuppers (number) 561,646 592,009 Network subjected to preventive cleaning (%) 14.69 58.97 Pipe network cleaning (kilometres) 4,106 3,213 Network length inspected (kilometres) 27,954 5,448 Pipe network inspection (kilometres) 3,637 3,177 Network inspection by probe (kilometres) 23,701 1,740 Visitable network inspection (kilometres) 616 531
Management of sewerage and urban drainage networks
RENOVATION OF SANITATION NETWORKS (KILOMETRES) 2015 2016 Renovation by technology without opening trenches 10.17 2.39 Restoration through continuous hose 8.61 1.99 Other 1.56 0.41 Visitable gallery 3.38 2.83 Restoration of visitable gallery 0.26 0.27 Construction of visitable gallery 3.11 2.56 Renovation of network by trenches 15.20 11.05 Concrete 0.71 PVC 13.41 9.11 Stoneware 0.52 Glass-fibre reinforced plastic 1.27 1.19 Other materials 0.04 SUM of renovated kilometres 28.75 16.27
165 APPENDIX I
Purification of waste water
BASIC TECHNICAL INFORMATION 2015 2016 Number of WWTPs in service managed by the company 156 157 Number of plants based on soft technologies (lagoons, green filters, biodiscs...) 11 11 Total volume of treated water 458.16 487.27 Treated volume versus volume rerouted for consumption (%) 92.06% 99.14% Regenerated water versus volume rerouted for consumption (%) 2.59% 2.52% Treatment capacity (millions of equiv. inhabitants) 17.53 17.57 Design flow rate (hm3 daily) 3.22 3.23 Percentage of purified wastewater discharged to river channels 97.19 97.50 Percentage of regenerated treated wastewater 2.81 2.50
Contamination eliminated and purification yield
2015 2016 Inflow water volume at WWTPs (hm3) 474.592 541.161 Inflow BOD5 (tonnes) 154,242 163,972 Inflow COD (tonnes) 290,925 312,791 Inflow nitrogen (tonnes) 29,234 31,409 Inflow phosphorus (tonnes) 3,915 4,042 Inflow water suspended solids (mg/l) 283 265 Average quality of treated water Outflow water volume (hm3) 458 487 Outflow DBO5 (tonnes) 4,582 4,385 Outflow COD (tonnes) 20,617 20,465 Outflow nitrogen (tonnes) 13,637 12,099 Phosphorus (tonnes) 348 351 Outflow water suspended solids (mg/l) 12 11 Pollutant load removed DBO5 of pollutant load removed (tonnes) 149,661 159,586 Suspended solids (tonnes) 128,812 138,047 Degree of purification (%) 97.03% 97.33% Purification yield (%) DBO5 97.03% 97.33% Suspended solids 95.76% 95.85% COD 92.66% 92.73% Phosphorus 91.11% 91.32% Nitrogen 53.36% 61.48%
166 2016 Annual Report Canal de Isabel II
Customer and user satisfaction figures
Services provided by Canal de Isabel II in the municipalities of the Autonomous Community of Madrid
SERVICES PROVIDED BY CANAL DE ISABEL II
MUNICIPALITIES OF THE AUTONOMOUS POPULATION COMMUNITY OF MADRID Adduction Distribution Sewerage system Purification
Madrid 3,165,541 3,165,541 3,165,541 3,165,541 3,165,541 Móstoles 205,614 205,614 205,614 205,614 205,614 Alcalá de Henares 195,907 - - - 195,907 Fuenlabrada 194,171 194,171 194,171 194,171 194,171 Leganés 187,173 187,173 187,173 - 187,173 Getafe 176,659 176,659 176,659 176,659 176,659 Alcorcón 167,354 167,354 167,354 167,354 167,354 Torrejón de Ardoz 126,981 126,981 126,981 126,981 126,981 Parla 124,661 124,661 124,661 124,661 124,661 Alcobendas 113,340 113,340 113,340 113,340 113,340 Las Rozas de Madrid 94,471 94,471 94,471 94,471 94,471 San Sebastián de los Reyes 86,206 86,206 86,206 86,206 86,206 Pozuelo de Alarcón 84,989 84,989 84,989 - 76,490 Coslada 84,533 84,533 84,533 - 84,533 Rivas-Vaciamadrid 82,715 82,715 82,715 82,715 82,715 Valdemoro 72,988 72,988 72,988 72,988 72,988 Majadahonda 70,755 70,755 70,755 - 70,755 Collado Villalba 61,597 61,597 61,597 61,597 61,597 Aranjuez 57,932 57,932 57,932 - 57,932 Arganda del Rey 54,256 54,256 54,256 54,256 54,256 Boadilla del Monte 49,762 49,762 49,762 49,762 49,762 Pinto 49,522 49,522 49,522 49,522 49,522 Colmenar Viejo 48,020 48,020 48,020 - 48,020 Tres Cantos 44,764 44,764 44,764 44,764 44,764 San Fernando de Henares 40,095 40,095 40,095 40,095 40,095 Galapagar 32,404 32,404 16,202 - 32,404 Arroyomolinos 28,177 28,177 28,177 28,177 28,177 Villaviciosa de Odón 27,276 27,276 27,276 27,276 27,276
167 APPENDIX I
SERVICES PROVIDED BY CANAL DE ISABEL II
MUNICIPALITIES OF THE AUTONOMOUS POPULATION COMMUNITY OF MADRID Adduction Distribution Sewerage system Purification
Navalcarnero 26,954 26,954 26,954 26,954 26,954 Ciempozuelos 23,773 23,773 23,773 23,773 23,773 Torrelodones 23,123 23,123 23,123 23,123 23,123 Paracuellos de Jarama 23,104 23,104 23,104 23,104 23,104 Mejorada del Campo 22,900 22,900 22,900 - 22,900 Algete 20,311 20,311 20,311 20,311 20,311 Villanueva de la Cañada 19,611 19,611 19,611 19,611 19,611 Humanes de Madrid 19,563 19,563 19,563 19,563 19,563 San Martín de la Vega 18,734 18,734 18,734 18,734 18,734 San Lorenzo de El Escorial 18,038 9,019 9,019 - 18,038 Villanueva del Pardillo 16,950 16,950 16,950 16,950 16,950 Guadarrama 15,488 15,488 15,488 - 15,488 El Escorial 15,364 15,364 15,364 15,364 15,364 Alpedrete 14,417 14,417 14,417 14,417 14,417 Meco 13,426 13,426 13,426 13,426 13,426 San Agustín del Guadalix 12,862 12,862 6,431 - 12,862 Villalbilla 12,719 12,719 12,719 12,719 12,719 Moralzarzal 12,372 12,372 - - 12,372 Velilla de San Antonio 12,222 12,222 12,222 12,222 12,222 Valdemorillo 12,168 12,168 12,168 12,168 12,168 Brunete 10,374 10,374 10,374 10,374 10,374 Daganzo de Arriba 9,981 9,981 9,981 9,981 9,981 Griñón 9,938 9,938 9,938 9,938 9,938 El Álamo 9,017 9,017 9,017 9,017 9,017 Colmenarejo 8,945 8,945 - - 8,945 Sevilla la Nueva 8,905 8,905 8,905 8,905 8,905 Soto del Real 8,483 4,242 8,483 8,483 8,483 Loeches 8,388 8,388 8,388 8,388 8,388 Manzanares el Real 8,387 8,387 8,387 - 8,387 San Martín de Valdeiglesias 8,344 8,344 8,344 8,344 8,344 El Molar 8,263 8,263 8,263 8,263 8,263 Torrejón de la Calzada 8,171 8,171 8,171 - 8,171
168 2016 Annual Report Canal de Isabel II
SERVICES PROVIDED BY CANAL DE ISABEL II
MUNICIPALITIES OF THE AUTONOMOUS POPULATION COMMUNITY OF MADRID Adduction Distribution Sewerage system Purification
Hoyo de Manzanares 7,965 7,965 7,965 - 7,965 Colmenar de Oreja 7,946 7,946 7,946 - 7,946 Torres de la Alameda 7,769 7,769 7,769 7,769 7,769 Morata de Tajuña 7,548 7,548 7,548 7,548 7,548 Villarejo de Salvanés 7,265 7,265 7,265 7,265 7,265 El Boalo 7,225 7,225 7,225 - 7,225 Camarma de Esteruelas 7,050 7,050 7,050 - 7,050 Cobeña 7,009 7,009 7,009 7,009 7,009 Cercedilla 6,751 3,376 - - 6,751 Collado Mediano 6,583 6,583 6,583 6,583 6,583 Fuente el Saz de Jarama 6,403 6,403 6,403 6,403 6,403 Villa del Prado 6,295 - - - 6,295 Nuevo Baztán 6,018 6,018 6,018 6,018 6,018 Guadalix de la Sierra 5,982 5,982 5,982 - 5,982 Cubas de la Sagra 5,971 5,971 5,971 5,971 5,971 Campo Real 5,888 5,888 5,888 5,888 5,888 Miraflores de la Sierra 5,754 5,754 5,754 - 5,754 Pedrezuela 5,456 5,456 - - 5,456 Becerril de la Sierra 5,439 2,720 - - 5,439 Chinchón 5,294 5,294 5,294 5,294 5,294 Moraleja de Enmedio 4,984 4,984 4,984 4,984 4,984 Torrelaguna 4,697 4,697 4,697 4,697 4,697 Ajalvir 4,440 4,440 4,440 4,440 4,440 Los Molinos 4,373 4,373 4,373 - 4,373 Valdetorres de Jarama 4,260 4,260 4,260 4,260 4,260 Torrejón de Velasco 4,243 4,243 4,243 4,243 4,243 Robledo de Chavela 4,001 4,001 4,001 - 4,001 Serranillos del Valle 3,990 3,990 3,990 3,990 3,990 Valdeolmos-Alalpardo 3,880 3,880 3,880 3,880 3,880 Casarrubuelos 3,589 3,589 3,589 3,589 3,589 Talamanca de Jarama 3,451 3,451 3,451 3,451 3,451 Villaconejos 3,350 3,350 3,350 - 3,350
169 APPENDIX I
SERVICES PROVIDED BY CANAL DE ISABEL II
MUNICIPALITIES OF THE AUTONOMOUS POPULATION COMMUNITY OF MADRID Adduction Distribution Sewerage system Purification
Quijorna 3,239 3,239 3,239 3,239 3,239 Navacerrada 2,885 2,885 2,885 - 2,885 Perales de Tajuña 2,799 2,799 2,799 2,799 2,799 Cadalso de los Vidrios 2,788 2,788 2,788 2,788 2,788 Valdilecha 2,749 2,749 2,749 2,749 2,749 Navas del Rey 2,659 2,659 2,659 2,659 2,659 Tielmes 2,620 2,620 2,620 2,620 2,620 Aldea del Fresno 2,584 - - - 2,584 La Cabrera 2,560 2,560 2,560 2,560 2,560 Villamanta 2,497 2,497 - - 2,497 Pelayos de la Presa 2,471 2,471 2,471 2,471 2,471 Los Santos de la Humosa 2,435 2,435 2,435 2,435 2,435 Navalagamella 2,423 2,423 - - 2,423 Bustarviejo 2,370 2,370 2,370 2,370 2,370 Chapinería 2,214 2,214 2,214 2,214 2,214 Fresno de Torote 2,044 2,044 2,044 - 2,044 Venturada 2,014 2,014 2,014 2,014 2,014 Cenicientos 1,986 1,986 1,986 1,986 1,986 Villar del Olmo 1,981 1,981 1,981 1,981 1,981 Carabaña 1,948 1,948 1,948 1,948 1,948 Fuentidueña de Tajo 1,936 1,936 1,936 1,936 1,936 Buitrago del Lozoya 1,861 1,861 1,861 1,861 1,861 El Vellón 1,846 1,846 1,846 1,846 1,846 Rascafría 1,692 - - - 1,692 Colmenar del Arroyo 1,632 1,632 1,632 1,632 1,632 Belmonte de Tajo 1,605 1,605 1,605 1,605 1,605 Batres 1,582 1,582 1,582 - 1,582 Zarzalejo 1,565 1,565 1,565 1,565 1,565 Fresnedillas de la Oliva 1,547 1,547 1,547 1,547 1,547 Villanueva de Perales 1,486 1,486 1,486 1,486 1,486 Valdeavero 1,407 1,407 - - 1,407 Villamantilla 1,334 1,334 1,334 1,334 1,334
170 2016 Annual Report Canal de Isabel II
SERVICES PROVIDED BY CANAL DE ISABEL II
MUNICIPALITIES OF THE AUTONOMOUS POPULATION COMMUNITY OF MADRID Adduction Distribution Sewerage system Purification
Estremera 1,319 1,319 1,319 1,319 1,319 Navalafuente 1,266 1,266 1,266 1,266 1,266 Titulcia 1,258 1,258 1,258 1,258 1,258 Orusco de Tajuña 1,225 1,225 1,225 - 1,225 Anchuelo 1,215 1,215 1,215 1,215 1,215 Lozoyuela-Navas-Sieteiglesias 1,210 1,210 1,210 1,210 1,210 Santa María de la Alameda 1,177 1,177 1,177 1,177 1,177 Pozuelo del Rey 1,073 1,073 1,073 - 1,073 Valdemanco 911 911 911 911 911 Torremocha de Jarama 906 906 906 906 906 Santorcaz 851 851 851 851 851 Valdelaguna 841 841 841 - 841 Pezuela de las Torres 793 793 793 - 793 Valdemaqueda 779 779 779 - 779 Berzosa del Lozoya 752 752 752 752 752 Cabanillas de la Sierra 719 719 719 719 719 Villamanrique de Tajo 705 705 705 705 705 Ribatejada 689 689 689 689 689 Corpa 672 672 672 672 672 Valdaracete 641 641 641 641 641 Puentes Viejas 627 627 627 627 627 Ambite 595 595 595 595 595 Lozoya 576 576 576 576 576 Valdepiélagos 574 574 574 574 574 Brea de Tajo 560 560 560 560 560 Patones 537 537 537 537 537 Rozas de Puerto Real 533 533 533 533 533 Canencia 451 451 451 451 451 Valverde de Alcalá 430 430 430 430 430 Montejo de la Sierra 359 359 359 359 359 Garganta de los Montes 351 351 351 351 351 Olmeda de las Fuentes 326 326 - - 326
171 APPENDIX I
SERVICES PROVIDED BY CANAL DE ISABEL II
MUNICIPALITIES OF THE AUTONOMOUS POPULATION COMMUNITY OF MADRID Adduction Distribution Sewerage system Purification
Gargantilla del Lozoya and Pinilla de 325 325 325 325 325 Buitrago Villavieja del Lozoya 270 270 270 270 270 Redueña 261 261 261 261 261 Alameda del Valle 208 - - - 208 Braojos 201 201 201 201 201 El Berrueco 198 198 198 198 198 Pinilla del Valle 192 192 192 192 192 Piñuécar-Gandullas 185 185 185 185 185 Gascones 171 171 171 171 171 Cervera de Buitrago 157 157 157 157 157 Horcajo de la Sierra-Aoslos 143 143 143 143 143 Prádena del Rincón 134 134 134 134 134 Navarredonda and San Mamés 132 132 132 132 132 Robledillo de la Jara 99 99 99 99 99 El Atazar 95 95 95 95 95 Horcajuelo de la Sierra 86 86 86 86 86 La Serna del Monte 77 77 77 77 77 Somosierra 77 - - - 77 La Acebeda 66 66 66 66 66 Puebla de la Sierra 66 66 66 66 66 La Hiruela 54 54 54 54 54 Madarcos 47 47 47 47 47 Robregordo 45 45 45 45 45 SUM OF POPULATION SERVED 6.24 6.18 5.50 6.46 (millions of inhabitants) Number of municipalities Autonomous 173 164 134 179 Community of Madrid
172 2016 Annual Report Canal de Isabel II
Canal de Isabel II social tariff
EVOLUTION OF TARIFF ALLOWANCES
2014 2015 2016 Large family/household allowances No. contracts with allowances 25,202 32,726 35,285 Allowance amount (euros) 1,046,436 1,121,812 1,182,115 Social exemption allowances No. contracts with allowances 2,019 3,408 6,547 Allowance amount (euros) 148,415 368,921 715,528
Metre laboratory activity
NUMBER OF METRES CHECKED 2014 2015 2016 IN THE METRE LABORATORY New proprietary metres 2,216 2,467 2,996 Customer complaints regarding metres 1,710 2,300 2,740 Evaluation of the operation of metres in service 2,953 2,319 2,379 Other internal checks 76 66 Checks for third parties 51 120 SUM 6,879 7,213 8,301
Fulfilling the customer commitment
DEGREE OF COMPLIANCE WITH THE COMMITMENT PLEDGE COMMITMENTS INCLUDED 2014 2015 2016 New connection 98.22% 96.92% 97.58% Secondary metre 99.96% 99.91% 99.84% Resolve complaint 94.79% 98.80% 99.67% Check metre 99.52% 98.64% 99.78% Average compliance 98.12% 98.57% 99.22%
173 APPENDIX I
Customer service statistics
COMMUNICATION WITH CUSTOMERS 2014 2015 2016 No. of permanent sales offices 12 11 11 No. of telephone calls handled 1,162,025 1,171,581 1,032,732 Visits to HQ 39,768 36,304 27,716 Visits to peripheral offices 118,013 112,880 91,053 Virtual office 1,738,556 2,167,891 2,646,008 By letter 96,318 15,141 10,957 Personalised customer service By fax 57,375 58,013 24,945 Via Chat/WhatsApp 2,133 3,163 2,364 Via email 11,095 24,665 73,562 Automatic telephone service 34,752 31,076 32,857 Detailed Virtual Office statistics Virtual Office customers 158,647 195,091 225,951 Virtual Office contracts 227,487 274,758 312,466 Customers with e-bill 50,216 86,344 131,514 Electronic bills issued 373,972 634,572 895,434
Customer complaints and claims statistics
TYPE OF COMPLAINTS RECEIVED IN THE COMMERCIAL CIRCUIT (%) 2014 2015 2016 Quality of customer service 43.29 23.32 21.15 Water quality 13.11 31.66 35.09 Metre reading service 13.06 8.42 11.69 Other 30.54 36.60 32.07
BILLING COMPLAINTS RECEIVED BY THE CUSTOMER SERVICE NETWORK 2014 2015 2016 Bills issued 8,379,799 8,473,230 8,583,199 No. of complaints received 21,144 20,508 21,667 No. of complaints resolved 21,921 21,248 20,504 No. of favourable complaints 15,801 15,182 15,216 Percentage of complaints concerning issued bills 0.25 0.24 0.25 % fully or partially favourable to the customer 72.08 71.45 74.21
174 2016 Annual Report Canal de Isabel II
Incident reporting statistics
SUMMARY OF TYPES OF REPORTS RECEIVED 2014 2015 2016 Reports relating to water quality 8,085 11,779 10,743 Reports relating to sanitation 28,358 26,595 23,919 Reports relating to supply continuity 36,078 40,785 36,167 Reports relating to water pressure 11,478 14,448 12,555 Other reports 42,897 48,987 47,439
Customer Ombudsman Office statistics
COMPLAINTS RECEIVED BY THE CUSTOMER OMBUDSMAN OFFICE 2014 2015 2016 No. of complaints received that do not qualify 183 221 248 for processing No. of complaints received admitted for processing 711 875 1,066 Total no. of complaints received 894 1,096 1,314 Percentage of complaints received admitted for processing 79.5 79.8 81.1 No. of complaints fully or partially resolved in favour of the customer 317 446 501 No. of complaints resolved not in favour of the customer 327 374 508 Total no. of complaints resolved over the year 644 820 1009 Percentage fully or partially resolved in favour of the customer 49.2 54.4 49.7
TYPE OF COMPLAINTS ACCEPTED FOR PROCESSING BY THE CUSTOMER OMBUDSMAN'S OFFICE (%) 2014 2015 2016 Connections 3.8 7.31 5.72 Water quality 1.41 3.2 9.19 Collection 5.06 4.23 5.25 Contracting 7.17 6.29 8.35 Cut-off/Supply chain 10.97 5.71 1.88 Sanctioning file 1.97 1.94 1.03 Billing 60.76 55.2 53.66 Compensation. Insurance and Risks 4.64 5.14 5.82 Water pressure 1.97 4.46 3.1 Other 2.25 6.51 6
175 APPENDIX I
TYPES OF CUSTOMERS WHO HAVE SUBMITTED COMPLAINTS ACCEPTED FOR PROCESSING BY THE CUSTOMER OMBUDSMAN'S OFFICE (%) 2014 2015 2016 Natural person 68.64 68.8 69.42 Company name 8.3 8.91 8.44 Owners' association 13.22 11.09 10.88 Municipal Consumer Information Office 5.91 4.8 4.32 Consumer associations 0.56 1.49 1.88 Arbitration board 0.7 0.34 0.38 Residential estate 0.14 0.11 0.38 Autonomous Community of Madrid 2.53 4.46 4.32
Customer satisfaction statistics
CUSTOMER SATISFACTION LEVEL 2014 2015 2016 Results obtained by the company Customer satisfaction level (scale of 1 to 10) 7.63 7.84 7.84 % of customers who would recommend the service provided by the company (net recommendation) 87 89.6 89.6 Average result for the supply and sanitation sector Customer satisfaction level (scale of 1 to 10) 7 7.02 7.02 % of customers who would recommend the service provided by the company 73 68.8 68.8
176 2016 Annual Report Canal de Isabel II
Environmental management figures
Statistics on quality, environmental and OSH management systems
STRUCTURE OF QUALITY MANAGEMENT SYSTEMS AND 2014 2015 2016 ENVIRONMENTAL AND OSH DOCUMENTS No. of documents in effect 533 532 597 No. of amended documents 79 104 101 SUM 612 636 698 UNITS AUDITED IN INTERNAL AUDITS 2014 2015 2016 Divisions 5 1 1 Departments 13 12 14 Areas 36 31 31 SUM 54 44 46 TYPE OF FACILITIES AUDITED IN INTERNAL AUDITS 2014 2015 2016 Well field 1 Dams 2 Drinking water lifting station 6 6 Drinking water treatment plant 4 2 3 Wastewater treatment plant 10 6 6 Laboratory 1 1 2 Offices 3 2 Other 22 16 8 SUM 46 34 21 RESULTS OF INTERNAL AUDITS PERFORMED 2014 2015 2016 Deviations 7 15 Observations 60 42 54 Opportunities for improvement 85 88 86
177 APPENDIX I
Statistics on environmental information request notifications received and processed
2014 2015 2016 Internal 4 2 5 External (by type) Wastewater discharge 18 17 18 Noise 2 Works 15 18 5 Odours 3 3 Waste management 2 1 Materials and waste storage 1 Condition of reservoirs 2 Water consumption Ecological flow 2 Effect on flora and fauna 2 6 6 Other 4 7 6 Sum of external 44 56 38
Financial resources assigned to voluntary environmental activities (in euros)
NET EXPENSES (NET OF INCOME) 2014 2015 2016 Thermal sludge drying 2,114,533.909 1,404,853.700 1,365,002.404 Recycling/reuse 739,013.148 931,013.210 770,992.230 Maintenance of green areas and reforestation 2,065,928.460 1,907,736.790 1,882,552.260 Spending on environmental education programmes 227,357.250 272,811.540 229,441.400 Other voluntary environmental expenses 124,048.053 160,725.218 181,087.897 SUM OF EXPENSES 5,270,880.821 4,677,140.458 4,429,076.191 INVESTMENTS 2014 2015 2016 Recycling/reuse 6,711,841.000 3,461,025.000 12,248,897.000
178 2016 Annual Report Canal de Isabel II
Total environmental expenditure and investments (in euros)
EXPENSES 2014 2015 2016 Purification of waste water 121,945,812 143,265,584 141,727,562 Sewerage system 72,153,025 68,345,311 66,178,651 Recycling/reuse 6,811,354 6,989,957 6,753,453 Others (green areas, waste management) 2,298,761 2,212,152 2,151,145 SUM 203,208,952 220,813,005 216,810,811
INVESTMENTS 2014 2015 2016 Purification of waste water 10,627,610 19,397,555 13,581,372 Sewerage system 1,337,456 935,377 952,599 Recycling/reuse 6,711,841 3,461,025 12,248,897 Renewable energy generation facilities 1,427,961 3,469,130 SUM 18,676,907 25,221,918 30,251,998
Consumption of reagents in DWTPs and WWTPs (tonnes per year)
2014 2015 2016 CONSUMPTION OF REAGENTS IN DWTPS Chlorine (t/year) 1,842 2,192 2,055 Alumina sulphate 13,493 15,143 13,945 Calcium hydroxide 2,591 2,561 2,375 Polychlorinated alumina 1,053 2,672 1,342 Activated carbon dust 96 78 161 Sodium hypochlorite 1,879 2,201 2,453 Other reagents (15 types) 5,499 5,671 5,038 Total reagents consumed in DWTPs 26,453 30,518 27,369 CONSUMPTION OF REAGENTS IN WWTPS Ferrous chloride 36,566 36,801 35,899 Polyelectrolyte 1,018 996 1,050 Limestone 303 171 175 Total reagents consumed in WWTPs 37,887 37,968 37,124 SUM OF REAGENTS 64,340 68,486 64,493
179 APPENDIX I
Paper consumption statistics (kg/year)
2014 2015 2016 PAPER CONSUMPTION IN ADMINISTRATIVE AND MANAGEMENT ACTIVITIES Plain paper 12,748 9,551 9,670 Recycled paper 19,542 18,623 17,317 Total consumption 32,290 28,174 26,987 PAPER CONSUMPTION IN COMMERCIAL ACTIVITIES Envelopes N/A 202 213 Plain paper N/A 3,135 1,973 Recycled paper N/A 3,143 2,953 Total consumption N/A 6,480 5,139 SUM OF PAPER CONSUMPTION (kg/year) 32,290 34,654 32,126
Energy consumption
2014 2015 2016 POWER CONSUMPTION IN KWH Total consumption of electricity from the grid 272,297,639 290,222,450 299,605,401 Consumption of hydroelectric power generated by 16,413,263 21,009,382 18,978,168 Hidráulica Santillana Consumption of electric power generated from wastewater 87,138,736 89,419,307 90,281,621 treatment plant biogas Self-consumption of electrical energy in Loeches 7,345,589 9,624,300 9,152,761 sludge treatment Self-consumption of electric power from supply network microturbines, WWTP waterfalls and photovoltaic solar 923493.39 2,008,241 1,279,606 installations Total electric power consumption (mWh/year) 384,118,720 412,283,680 419,297,556 FUEL CONSUMPTION Natural gas in thermal drying of sludge from Loeches (kWh GCV/year) 141,315,060 175,913,794 180,862,708 Natural gas in building boilers/furnaces (in m3/year) 115,160 103,600 121,536 Diesel fuel in building boilers/furnaces (in litres/year) 125,670 140,000 123,155 Diesel fuel in vehicles and machinery (in litres/year) 652,731 676,981 669,436 Gasoline in vehicles (in litres/year) 28,691 25,985 22,638 Diesel fuel in processes (in litres/year) N/A 90,320 42,820
180 2016 Annual Report Canal de Isabel II
Summary of consumption by origin in GJ
ORIGIN 2014 2015 2016 Network consumption 980,271 1,044,801 1,078,579 Hidráulica Santillana consumption (only Canal Spain) 59,088 75,634 68,321 Self-consumption in WWTPs 313,699 321,910 325,014 UTL Loeches self-consumption (only Canal Spain) 26,444 34,647 32,950 Network microturbines 3,325 7,230 4,607 Total electric power consumption 1,382,827 1,484,221 1,509,471 Diesel fuel consumption in company vehicles 23,545 24,420 24,148 and machinery Gasoline consumption in vehicles 961 870 758 Natural gas in building boilers/furnaces 4,492 4,041 4,741 Diesel fuel in building boilers/furnaces 4,491 4,040 4,740 Diesel consumption in processes N/A 3,522 1,670 Natural gas thermal drying UTL Loeches sludge 444,727 551,882 570,080 Total fossil fuel consumption 478,216 588,776 606,137
TOTAL ENERGY CONSUMPTION 1,861,044 2,072,998 2,115,608
Specific electric power consumption
AVERAGE 2014 2015 2016 OVER 3 YEARS Specific electric power consumption in supply (in kWh/m3 of water derived for 0.186 0.239 0.253 0.226 consumption) Specific electric power consumption in sanitation and reuse (in kWh/m3 of purified 0.549 0.605 0.543 0.566 and regenerated water) * Total specific electric power consumption (in 0.384 0.431 0.418 0.411 kWh/m3 of water managed) **
* Includes sewerage, purification and sludge management. ** Managed water = water rerouted for consumption + water treated in WWTPs + regenerated water.
181 APPENDIX I
Internal water consumption (in cubic metres per year)
SOURCES OF INTERNAL WATER CONSUMPTION 2015 2016 Network flushing 2,543,438 2,183,697 Canal de Isabel II facilities 2,216,394 1,969,999 Commissioning of existing facilities 238,893 454,244 Commissioning of new facilities 29,858 198,622 Cleaning of deposits 253,793 80,058 Cleaning of new regulating infrastructures 55,278 45,855 Water consumed in treatment processes 30,624 41,756 Cleaning of new network renovation pipes 32,807 35,653 Pipe recessing 4,382 7,601 PCT pipe cleaning 37,329 4,180 SUM OF INTERNAL CONSUMPTION AT CANAL 5,442,796 5,021,665
182 2016 Annual Report Canal de Isabel II
Atmospheric emissions
POLLUTANT 2014 2015 2016 INDIRECT EMISSIONS (CANAL DE ISABEL II) Due to recorded electric power CO (t/year) 61,812 78,650 65,614 consumption (1) 2 DIRECT EMISSIONS FROM EXISTING COMBUSTION PLANTS (ONLY CANAL DE ISABEL II IN FIXED SOURCES)
CO2 (t/year) 42,901 64,545 65,936
CH4 (t/year) 0.95 1.37 1.77
Sludge heating boilers, UTL Loeches N2O (t/year) 1.61 2.33 3.01 cogeneration and torches (2), natural gas NOx (t/year) 99.72 137.81 166.25 boilers (3) and diesel boilers for buildings and diesel fuel used in processes (3) SO2 (t/year) 2.35 3.08 2.99 CO (t/year) 11.42 16.75 21.45 COVNM (t/year) 0.06 0.09 0.08 DIRECT EMISSIONS FROM SLUDGE COMPOSTING PROCESSES (ONLY CANAL DE ISABEL II)
CH4 (t/year) 52.42 56.41 75.71 Composting of WWTP sludge (5)
N2O (t/year) 3.93 4.23 5.68 DIRECT EMISSIONS FROM MOBILE SOURCES (DIESEL, GASOLINE AND NATURAL GAS-POWERED VEHICLES - CANAL DE ISABEL II)
CO2 (t/year) 1,774.47 1,831.43 1,803.75
CH4 (t/year) 0.08 0.08 0.08
N2O (t/year) 0.00 0.00 0.00 Exhaust fumes from vehicles and machinery (4) NOx (t/year) 9.26 9.58 9.45
SO2 (t/year) 0.06 0.06 0.06 CO (t/year) 6.20 6.22 5.97 COVNM (t/year) 1.14 1.15 1.10
(1) Estimated emissions based on the electricity generation scheme in the Spanish mainland electricity system and the IPCC emission factors. (2) Estimated emissions based on the European Environment Agency's CORINAIR Guide and the consumption and characteristics of the biogas obtained. (3) Estimated emissions based on the European Environment Agency's CORINAIR Guide and fuel consumption and characteristics. (4) Estimated emissions based on the European Environment Agency's CORINAIR Guide, taking into account road transport emission factors for Spain and fuel consumption and characteristics. (5) Estimated emissions based on IPCC 2006 emission factors.
183 APPENDIX I
Waste management statistics
WASTE PRODUCTION CENTRES AND WASTE GATHERING POINTS 2014 2015 2016 No. of waste production centres 312 334 343 (hazardous or non-hazardous) No. of centres declared and approved as producers of 175 180 184 Hazardous Waste No. of waste gathering points 17 17 17 No. of affiliated facilities (facilities without personnel) 413 413 413
NON-HAZARDOUS WASTE GENERATED AND DESTINATION (KG/YEAR) QUANTITIES GENERATED (IN KG/YEAR) TYPE OF WASTE 2014 2015 2016 Printer toner waste 611 339 1,068 Construction and demolition waste (debris) 244,843 334,803 465,350 Paper and cardboard 79,050 79,506 75,656 Glass 1,760 3,320 760 Wood not containing hazardous substances 41,578 63,992 53,470 Plastics and rubber 96,250 94,151 45,922 Metals 315,000 204,520 177,156 Pruning waste from parks and gardens 557,980 498,366 405,155 Biodegradable kitchen waste, oils and fats 280 185 80 Disposable electrical and electronic equipment 5,880 5,500 7,044 Mixed urban waste (includes USW) 206,500 88,210 106,682 Drinking water filtration sand 441,280 968,800 514,610 Aqueous liquid waste 46,720 14,240 35,800 WWTP and WWPS pre-treatment waste 22,195,802 27,077,659 30,197,609 Other 36,740 27,611 12,858 Total non-hazardous waste 24,270,274 29,461,202 32,099,220
184 2016 Annual Report Canal de Isabel II
HAZARDOUS AND BIO-SANITARY WASTE (KG/YEAR) TYPE OF WASTE 2014 2015 2016 Transformers and capacitors containing PCBs 164 2,070 Acids, bases and salts from physical-chemical water 140,006 30,676 treatment Halogenated and non-halogenated solvents 1,967 1,903 Waste from maintenance of water treatment 8,916 6,763 equipment/facilities Motor oil and lubricant waste 43,413 81,448 Containers containing/having contained waste of 38,280 32,832 51,984 hazardous substances Discarded electrical and electronic equipment 86 1,260 Expired laboratory liquid/reagent waste Water analysis 105,002 86,272 Batteries and accumulators containing hazardous 1,355 7,801 substances Insulation and construction materials containing asbestos 7,160 97,740 Biosanitary waste 488 968 978 Fluorescent tubes and other mercury-containing waste 1,533 960 1,798 Miscellaneous waste gathered 257,484 1,231 3,969 Total hazardous and biosanitary waste 305,109 436,546 274,852
Management of mud from DWTPs and sludge from WWTPs
SLUDGE GENERATED IN WWTPS * 2014 2015 2016 Sludge produced 182,015 185,058 186,839 Dry matter (t/year) 41,952 42,368 43,305
* Sludge generated in sanitation facilities belonging to the Madrid City Council is not included. The drying of the sludge generated in these facilities falls outside the scope of the Management Commission and is the responsibility of companies contracted directly by the Madrid City Council, as well as the final destination of the sludge. Work is under way with the Madrid City Council so that Canal can take over this management starting in 2017.
MUD GENERATED IN DWTPS 2014 2015 2016 Mud generated (t/year) 24,382 29,022 26,636 Dry matter (t/year) 3,410 4,263 4,663
DESTINATION IN % OF SLUDGE GENERATED IN WWTPS DESTINATION 2014 2015 2016 Landfill/dumpsite 0.00% 0.30% 0.46% Ceramic recovery 2.30% 5.60% 1.46% Agricultural application 73.50% 69.99% 67.42% Composting 7.20% 7.62% 10.13% Thermal drying 17.00% 16.49% 20.53% SUM 100.00% 100.00% 100.00%
185 APPENDIX I
DESTINATION IN % OF MUD GENERATED IN DWTPS DESTINATION 2015 2016 Landfill/dumpsite 3.01% 6.28% Agricultural application after treatment 96.99% 93.72% SUM 100.00% 100.00%
Noise controls
RESULTS OF THE NOISE LEVEL CONTROL PROGRAMME 2015 2016 No. of controlled facilities 232 234 Rate of compliance 97.23% 97.93%
Greenhouse gas emissions
ESTIMATED GREENHOUSE GAS (GHG) EMISSIONS IN THOUSANDS OF TONNES OF CO2 EQUIVALENT % 2014- EMISSION SOURCES 2014 2015 2016 % IN 2016 2016 PERIOD Direct GHG emissions associated with Canal processes 47.52 69.62 72.06 37.67% 33.78% (scope 1) Emissions from sludge heating boilers, cogeneration 42.83 64.50 66.16 34.58% 30.98% and torches Emissions from WWTP sludge composting processes 2.32 2.50 3.35 1.75% 1.46% Emissions from natural gas boilers in buildings 0.26 0.23 0.27 0.14% 0.13% Emissions from diesel fuel powered boilers in buildings 0.34 0.57 0.48 0.25% 0.25% and processes GHG emissions from mobile sources (vehicles and 1.78 1.83 1.81 0.94% 0.97% machinery) Indirect emissions related to electricity consumption 61.81 78.65 65.61 34.29% 36.80% (scope 2) Indirect emissions associated with electricity generation 61.81 78.65 65.61 34.29% 36.80% Indirect emissions from supplies, services and other 55.27 55.83 53.65 28.04% 29.42% activities (scope 3) Emissions from employee commutes to their workplace 3.837 3.979 4.095 2.14% 2.13% Emissions from desanding and screening waste transport 0.075 0.091 0.102 0.05% 0.05% services Emissions from transport services of other non-hazardous 0.007 0.008 0.006 0.00% 0.00% waste Emissions from hazardous waste transport services 0.001 0.001 0.001 0.00% 0.00% Emissions from WWTP sludge and DWTP mud transport 0.420 0.436 0.434 0.23% 0.23% services Emissions associated with the agricultural use of WWTP 36.977 36.522 35.082 18.34% 19.39% sludge by third parties Emissions from manufacturing of reagents used in supply 13.833 14.724 13.866 7.25% 7.58% and sanitation Emissions from paper supplies consumed by Canal 0.117 0.069 0.064 0.03% 0.04% TOTAL GHG EMISSIONS (scopes 1, 2 and 3) 164.59 204.11 191.33 100.00% 100.00% Emissions in kg of CO eq per m3 managed (rerouted for 2 0.165 0.213 0.191 consumption + treated in WWTP + regenerated water)
186 2016 Annual Report Canal de Isabel II
Statistics on the production and destination of electricity (MWh)
SELF-CONSUMED GENERATED ELECTRIC POWER TRANSFERRED TO THE GRID GENERATION SOURCES BY CANAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 Hydroelectric 104,444 80,908 97,058 17,433 22,193 19,648 87,011 58,715 77,410 (Hidráulica Santillana) Cogeneration (UTL Loeches) 56,391 71,010 72,792 7,346 9,624 9,153 49,045 61,385 63,640 WWTP biogas 87,139 89,419 90,282 87,139 89,419 90,282 - - - Supply microturbines 502 1,533 736 502 1,533 736 - - - WWTP microturbines 422 475 518 422 475 518 - - - WWTP photovoltaic - - 26 - - 26 - - - SUM 248,897 243,345 261,411 112,841 123,245 120,362 136,056 120,100 141,050
187 APPENDIX I
Canal de Isabel II power generation facilities and equipment
INSTALLED POWER COMPANY FACILITY (KW) PINILLA hydroelectric power plant 2,320 RIOSEQUILLO hydroelectric power plant 7,200 PUENTES VIEJAS hydroelectric power plant 7,200 EL VILLAR hydroelectric power plant 5,680 Canal de Isabel II operated EL ATAZAR hydroelectric power plant 8,640 by Hidráulica Santillana TORRELAGUNA hydroelectric power plant 1,700 PEDREZUELA hydroelectric power plant 800 NAVALLAR hydroelectric power plant 1,310 TOTAL HYDROELECTRIC POWER PLANTS 34,850 Cogeneration UTL Loeches - Motor 1 6,633 Cogeneration UTL Loeches - Motor 2 6,633 Canal de Isabel II Cogeneration UTL Loeches - Motor 3 6,633 TOTAL COGENERATION UTL LOECHES 19,900 Viveros de la Villa WWTP biogas motors 1,710 La China WWTP biogas motors 2,906 La Gavia WWTP biogas motors 1,980 Butarque WWTP biogas motors 2,980 Canal de Isabel II (facilities owned by Madrid City Sur WWTP biogas motors 6,923 Council) Sur Oriental WWTP biogas motors 616 Valdebebas WWTP biogas motors 690 Las Rejas WWTP biogas motors 1,311 SUM MADRID CITY COUNCIL WWTP MOTORS 19,116 Arroyo Culebro Cuenca Media Alta WWTP biogas motors 1,320 Arroyo Culebro Cuenca Baja WWTP biogas motors 2,856
Canal de Isabel II Arroyo del Soto WWTP biogas motors 940 (in own facilities) Alcalá Oeste WWTP biogas motors 404 Torrejón de Ardoz WWTP biogas motors 808 SUM CANAL DE ISABEL II WWTP MOTORS 6,328
TOTAL MOTORS IN WWTPs 25,444
188 2016 Annual Report Canal de Isabel II
INSTALLED POWER COMPANY FACILITY (KW) Microturbine 1 Majadahonda 100 Microturbine 2 Majadahonda 110 Microturbine 3 Majadahonda 110 Griñón WWTP microturbine 100 La Jarosa Reservoir microturbine 100 Navacerrada 1 Reservoir microturbines 55 Navacerrada 2 Reservoir microturbines 55 Canal de Isabel II Riosequillo Reservoir microturbine 150 SUM SUPPLY MICROTURBINES 780 Sur WWTP microturbine 1 90 Sur WWTP microturbine 2 90 La Gavia WWTP microturbine 75 SUM PURIFICATION MICROTURBINES 255 TOTAL MICROTURBINES 1,035 La Estación WWTP photovoltaic solar 110 Canal de Isabel II Valdemaqueda WWTP photovoltaic solar 220 TOTAL PHOTOVOLTAIC 330 TOTAL Canal de Isabel II + Hidráulica Santillana 81,559
189 APPENDIX I
Canal de Isabel II reservoirs included in the Regional Catalogue of Reservoirs and Wetlands of the Autonomous Community of Madrid
ADDITIONAL INFORMATION RESERVOIR MUNICIPALITIES Other significant protections LIC Cuenca del río Lozoya and Sierra Norte Peripheral Protection Area of Sierra de Guadarrama Pinilla Lozoya, Pinilla del Valle National Park Sierra de Guadarrama Natural Resource Natural Management Plan LIC Cuenca del río Lozoya and Sierra Norte Buitrago de Lozoya, Gargantilla del Lozoya Riosequillo and Garganta de los Montes Sierra de Guadarrama Natural Resource Natural Management Plan LIC Cuenca del río Lozoya and Sierra Norte Piñuécar, Puentes Viejas, Buitrago de Lozoya Puentes Viejas Madarcos and Gascones Partially included in: Sierra de Guadarrama Natural Resource Natural Management Plan Puentes Viejas, Robledillo de la Jara and Berzosa El Villar LIC Cuenca del río Lozoya and Sierra Norte de Lozoya El Berrueco, Robledillo de la Jara, El Atazar, Cervera El Atazar LIC Cuenca del río Lozoya and Sierra Norte de Buitrago, Puentes Viejas and Patones Pedrezuela Guadalix de la Sierra, Pedrezuela and Venturada LIC Cuenca del río Guadalix Cuenca Alta del Manzanares Regional Park Santillana Manzanares El Real and Soto del Real LIC Cuenca del río Manzanares Navacerrada, Becerril de la Sierra and Collado Sierra de Guadarrama Natural Resource Natural Navacerrada Mediano Management Plan Partially included in: LIC Cuenca río Guadarrama La Jarosa Guadarrama Sierra de Guadarrama Natural Resource Natural Management Plan Guadarrama River Middle Course and Environs El Escorial, Valdemorillo, Colmenarejo and Regional Park Valmayor Galapagar Partially included in: Sierra de Guadarrama Natural Resource Natural Management Plan
Canal de Isabel II Green Zone statistics
RESTORATION ACTIVITIES CARRIED OUT IN NATURAL HABITATS 2014 2015 2016 Tree plantations (number of units) 319 74 3,629 Shrub plantations (number of units) 191 407 259
190 2016 Annual Report Canal de Isabel II
ACTIONS CARRIED OUT FOR THE MAINTENANCE OF PLANT HERITAGE 2014 2015 2016 Conservation and improvement of the areas adjacent to 417 420 425 Canal de Isabel II facilities, area of action (in ha) Reforestation (number of units) including new plantations 22,411 23,455 18,358 and gardening Clearing of brush and surface preparation (in ha) 252 452 520 Phytosanitary treatments in vegetation masses (surface treated in ha) 365 405 377
Discharges from reservoirs effected to maintain the ecological flow of rivers and for other reasons
ENVIRONMENTAL DISCHARGES MADE 2015 2016 Environmental discharges into rivers (in hm3/year) 60.44 75.60
OPERATION-RELATED DISCHARGES MADE 2015 2016 Discharges (in hm3/year) 127.59 101.97
191 APPENDIX I
Social commitment
Expenses and investments in Corporate Social Responsibility
2014 2015 2016 Expenditure on customer CSR actions (social tariffs) 2,813.27 1,490.79 1,897.82 Employee CSR expenses (employee social benefits) 605.34 269.76 417.95 Expenditure on society CSR activities Sport 378.00 403.00 176.55 Culture: Canal Foundation 2,040.95 2,040.95 2,040.95 Culture: Arte Canal Exhibition Hall (only Canal 2,166.82 3,234.86 1,539.32 Gestión Madrid) Contributions and donations to social entities 524.15 100.30 171.26 Education and youth (Canal Educa) 343.00 357.00 180.00 Development aid (Canal Voluntarios) 448.76 634.66 111.93 Sum society CSR expenditure 5,901.67 6,770.76 4,220.01 Social infrastructure maintenance expenses 1,543.31 1,264.87 1,470.29 TOTAL CSR EXPENSES 10,863.59 9,796.19 8,006.07 Investment in social and environmental infrastructure 176.10 189.49 226.70 Financial resources (expenditure + investment) allocated 11,039.69 9,985.68 8,232.78 to social commitment
192 2016 Annual Report Canal de Isabel II
Canal employees
Company workforce structure
2015 2016 Total number of workers 2,517 2,590 Full-time 2,399 2,476 Part-time 118 114 Average workforce 2,394 2,485 Average workforce 2,394 2,485 Breakdown by type of contract (FULL-TIME WORKFORCE) 2,399 2,476 Indefinite 1,594 1,581 Temporary 805 895 Breakdown by function (TOTAL WORKFORCE) 2,399 2,590 Management staff 114 110 Management support staff 281 294 Post-graduate degree holders 216 231 Graduate degree holders 106 111 Middle managers 144 159 Technicians 212 224 Clerical and auxiliary staff 487 563 Office staff 839 898 Breakdown by gender (TOTAL WORKFORCE) 2,517 2,590 Women 774 816 Men 1,743 1,774 Breakdown by age (FULL-TIME) 2,399 2,476 Under 30 years old 421 499 30-50 years old 1,362 1,344 Over 50 years old 616 633 Average age per contract 78 78 Average age of permanent staff 46.97 47.33 Average age of temporary staff 31.52 31.11 Breakdown by nationality (TOTAL WORKFORCE) 2,399 2,590 Nationals 2,394 2,581 Foreigners 5 9 Disability (TOTAL WORKFORCE) 21 22 Workers with some degree of disability 21 22 Seniority in the company (TOTAL WORKFORCE) 13 14 Average seniority of the workforce 12.74 13.60
193 APPENDIX I
Workforce diversity
MANAGEMENT STAFF (TOTAL AND FULL-TIME) 2015 2016 Breakdown by gender 114 110 Women 39 36 Men 75 74 Breakdown by age 114 110 Under 30 years old 30-50 years old 60 55 Over 50 years old 54 55 Other 1 Foreigners NON-MANAGEMENT STAFF (TOTAL AND FULL-TIME) Women 698 780 Management support staff 100 103 Post-graduate degree holders 109 128 Graduate degree holders 43 48 Middle managers 25 31 Technicians 59 64 Clerical and auxiliary 349 393 Office staff 13 13 Other nationalities 4 9 Management support staff 1 2 Post-graduate degree holders 1 1 Graduate degree holders Middle managers Technicians Clerical and auxiliary 2 5 Office staff 1 Disability 21 22 Workers with some degree of disability 21 22
194 2016 Annual Report Canal de Isabel II
2015 2016 By age, under 30 years old 421 499 Management support staff 3 3 Post-graduate degree holders 70 89 Graduate degree holders 32 28 Middle managers 2 4 Technicians 32 40 Clerical and auxiliary 97 127 Office staff 185 208 By age, 30-50 years old 1,303 1,289 Management support staff 198 203 Post-graduate degree holders 122 104 Graduate degree holders 59 65 Middle managers 70 75 Technicians 116 112 Clerical and auxiliary 282 285 Office staff 456 445 By age, over 50 years old 561 692 Management support staff 80 88 Post-graduate degree holders 24 38 Graduate degree holders 15 18 Middle managers 72 80 Technicians 64 72 Clerical and auxiliary 108 151 Office staff 198 245 Internship students/scholarship holders/interns/student apprentices 75 83
Workforce turnover
TOTAL WORKFORCE TURNOVER 2015 2016 Total hired 375 324 Total resigned/dismissed 286 251 Voluntary dismissals 55 40
195 APPENDIX I
Reinstatement and retention for maternity or paternity leave (total workforce)
2015 2016 Employees entitled to maternity or paternity leave 49 51 Women 17 16 Men 32 35 Employees who ended their leave in the previous year 52 45 Women 18 15 Men 34 30 Employees reinstated after leave from the previous year 52 49 Women 18 17 Men 34 32 Employees who retain employment 12 months after reinstatement 52 49 Women 18 17 Men 34 32
Workforce training
TRAINING RECEIVED 2015 2016 Total number of workers 2,517 2,590 No. workers (including interns) who have received training 2,255 2,406 Average no. of hours/employee (including interns) receiving training 49.286 45.948 Total number of training hours received 111,140 110,551 During working hours 46,687 51,229 Outside working hours 53,582 44,406 On-the-job training 10,871 14,916 TRAINING RECEIVED BY FUNCTION 118,836.680 119,782.420 Total hours of training received by function 111,140 110,551 Management staff 8,044 5,829 Management support staff 17,833 18,194 Post-graduate degree holders 25,369 21,437 Graduate degree holders 9,846 8,395 Middle managers 5,093 5,440 Technicians 10,831 11,633 Clerical and auxiliary 13,122 17,745 Office staff 21,002 21,878
196 2016 Annual Report Canal de Isabel II
2015 2016 Average hours of training received by function Management staff 16,122 10,154 Management support staff 16,713 13,568 Post-graduate degree holders 15,301 12,471 Graduate degree holders 20,554 17,562 Middle managers 15,157 11,800 Technicians 18,357 13,686 Clerical and auxiliary 13,945 11,675 Office staff 9,879 9,562 Attending trainees by function (persons) 7,696 9,231 Management staff 499 574 Management support staff 1,067 1,341 Post-graduate degree holders 1,658 1,719
Graduate degree holders 479 478
Middle managers 336 461 Technicians 590,000 850 Clerical and auxiliary 941 1,520 Office staff 2,126 2,288 Training by costs (euros) 683,756 745,961 Direct cost 884,288 941,630 Indirect cost 43,323 37,004 Cost of study grants for employees 22,326 31,818 Revenue from subsidies/financing/allowances received -266,181 -264,491 Training by theme (hours) 111,140 110,551 Languages 26,703 18,998 Administration and Management of Computer Systems 5,458 4,396 Quality 3,158 4,322 Sales and Customer Relations 1,930 2,603 Skills/Competence Development 9,933 8,617 Technical training 26,904 24,069 Legal-Economic 2,985 3,626 Office Automation and Software Applications 6,888 11,248 Occupational Risk Prevention 14,905 16,193 Fight against corruption 257 Others + on-the-job training 12,276 16,222
197 APPENDIX I
Evaluation of training
ASSESSMENT OF TRAINING (0 LOWEST AND 5 HIGHEST SCORE) 2015 2016 Assessment of the monitoring of training actions 4.210 4.100 Assessment of command perception 3.500 3.560 Assessment of trainee perception 3.260 3.370
Trade union representation
COLLECTIVE BARGAINING AGREEMENT AND UNION REPRESENTATION (NUMBER OF EMPLOYEES) 2015 2016 Workforce covered by sector-specific collective agreement 2,397 2,604 Percentage of workforce covered by sector-specific collective agreement 99.92% 99.92% Workforce not covered by collective agreement 2 2 Percentage of workforce not covered by collective agreement 0.08% 0.08% Workers affiliated to trade union organisations 458 453
Minimum wage
MINIMUM WAGE (EUROS) 2015 2016 Initial entry-level annual salary 15,215.70 15,367.78 Minimum initial entry-level annual salary for internship contracts 13,694.13 13,831 Country interprofessional annual minimum wage 9,080.40 9,172.80 Starting annual salary/interprofessional minimum wage 167.57% 167.54% Starting minimum wage/interprofessional minimum wage 150.81% 150.78%
198 2016 Annual Report Canal de Isabel II
Occupational safety and health
OCCUPATIONAL SAFETY AND HEALTH 2015 2016 Number of people covered for disability or invalidity 4 3 Total number of workers exposed to occupational risks 2,396 2,486 Occupational accidents Accidents at work with permanent contract (excluding in itinere) 83 84 Accidents at work with temporary contract (excluding in itinere) 42 40 Accidents at work (excluding in itinere) 125 124 Accidents with leave (excluding in itinere) 69 67 Average length of leave 15.652 16.313 Days lost 1,080 1,093 Frequency rate of accidents with sick leave (excluding in itinere) 17.248 16.197 Frequency rate of total accidents (excluding in itinere) 31.246 29.976 Severity rate (excluding in itinere) 0.270 0.264 Incidence rate of accidents with sick leave (excluding in itinere) 28.799 26.948 Fatal victims 0 0 Temporary incapacity benefit for professional contingencies (euros) 80,197 121,826 Number of permanent incapacity recognitions (excluding in itinere) 1 0 Total contributions for professional contingencies (euros) 1,173,381 1,233,294 Number of in labore traffic accidents (under assignment) 14 9 Number of in itinere traffic accidents 19 24 Number of in itinere accidents 38 42 In itinere accidents involving permanent workers 19 22 In itinere accidents involving temporary workers 19 20 Total accidents involving permanent workers 102 106 Total accidents involving temporary workers 61 60 Total in labore accidents involving own workers 163 166 Kilometres travelled on assignment N/A 10,001,440 % traffic accidents out of total accidents in Canal 20.25% 19.88% Rate of incidence of traffic accidents at work 13.773 13.273 Frequency rate of accidents at work while on assignment/kilometres travelled N/A 0.900 Hours worked 4,000,449 4,136,597 Absenteeism (hours) 171,829 178,566 Permanent employee hours lost due to absenteeism 139,106 138,522 Temporary employee hours lost due to absenteeism 32,723 40,043 Total absenteeism 4.30% 4.32% Absenteeism of employees with permanent contracts 5.25% 5.19% Absenteeism of employees with temporary contracts 2.42% 2.73% Workers represented on Health and Safety Committees (%) 100 100
199 APPENDIX I
Innovation, ICTs and remote control
R&D&i expenses (euros)
2014 2015 2016 NET EXPENDITURE (NET OF SUBSIDIES) 4,793,800 4,831,579 3,530,206 Total expenses incurred 5,091,020 4,849,255 3,558,309 Budget 602,438 1,341,994 1,135,786 Internal expenses 4,488,582 3,507,261 2,422,523 Subsidies -297,220 -17,676 -28,103 Total expenses incurred versus turnover (%) 0.61% 0.56% 0.41%
Information and communication technology (ICT) statistics
2015 2016 ICT EXPENSES (EUROS)
Total expenses 23,803,473 25,328,604
Expenses incurred 18,279,762 19,064,851
Internal expenses 5,523,711 6,263,753
INVESTMENT (EUROS)
Investment 6,831,771 7,303,004
DEGREE OF IT PENETRATION AMONG USERS
Number of computers 1,876 2,133
Number of ThinkClients 30 35
Number of laptop computers 158 128
Number of printers 711 648
Number of field terminals managed 965 1,097
Number of TEMPO ruggedised laptops 46 15
EMPLOYEES
Employees who log on in one month 2,248 2,347
Employees browsing in the last month 1,946 2,031
Employees with email mobility in the last month 182 197
200 2016 Annual Report Canal de Isabel II
2015 2016 BILLS (NUMBER) AND AMOUNT (EUROS) Electronic bills issued allowing processing 613,254 884,486 Electronic bills issued not allowing processing 0 0 Hardcopy bills issued 8,297,454 8,071,656 Supplier electronic invoices issued allowing processing 11,031 10,583 Supplier electronic invoices issued not allowing processing 0 0 Hardcopy supplier invoices 42,644 45,084 Amount Invoiced for Payments via Payment Gateway 182,475 299,211 Amount Invoiced to Companies for Payments via Payment Gateway 34,334 198,326 Amount Invoiced to the Administration for Payments via Payment Gateway 0 0 Amount of online purchases using credit card via down payment 2,897 6,135 Amount of online purchases 8,859,762 7,172,297 In Spain 8,815,463 7,143,860 From other EU countries 44,299 28,437 From rest of countries 0 0 AVAILABILITY Critical system availability 99.899 99.954 Availability of important systems 99.877 99.944 SATISFACTION % users satisfied with incident management 70.93% 94.75% % users satisfied with resolution of inquiries N/A 93.78% % users not satisfied with resolution of inquiries N/A 0.04% % users satisfied with IT system services N/A 93.64%
Remote Control Figures
REMOTE CONTROL FIGURES 2014 2015 2016 Remote Terminal Units (RTUs) monitored 1,664 1,741 1,940 Direct measurements 19,585 22,943 28,005 Remote control facilities 54 57 58 Remote controls conducted 5,391 8,440 6,644 Availability of field instrument kits (%) 97.300 98.150 98.908
Telecommunications Figures
TELECOMMUNICATIONS FIGURES 2014 2015 2016 Number of telecommunications network hosts 348 362 385 Fibre optic network length 559 626 636 No. of network radio links 147 153 163 Average Telecommunications network availability (%) 99.940 99.920 99.947
201 APPENDIX I
An efficient, sound company
Main financial figures (in millions of euros)
2014 2015 2016 Net turnover 830.70 861.27 866.78 FY profit/loss 225.68 232.69 232 Shareholders' equity 2,295.19 2,454.36 2,467.13 Investment 175.87 214.07 167.25 EBITDA 309.11 331.96 332.00 Indebtedness 1,137.89 1,108.04 982.15 Indebtedness/EBITDA 3.68 3.34 2.96
Investment (in euros)
2014 2015 2016 Total acquisitions of fixed assets 175,871,960 214,071,102 167,250,340 Land and buildings 12,617,037 17,389,615 10,507,601
Catchments and large pipelines 22,172,255 18,182,629 24,668,978
DWTP 4,687,456 11,255,544 4,158,340 Distribution networks 38,248,635 40,377,856 37,585,504 Technical compliance 2,447,327 325,454 8,939,057 Sanitation networks 17,108,392 15,063,160 13,937,326 WWTP 32,347,510 35,275,701 24,377,407 Reuse networks 5,630,698 6,327,272 12,757,961 Deposits 6,844,668 6,925,933 6,708,384 Information and Remote Control systems 16,899,493 11,000,660 12,028,610 Other items 16,868,489 51,947,276 11,581,171 Other indicators Investments applied to replacement provision -64,281,000 -68,606,885 -64,596,594 Net additions to fixed assets 111,590,960 145,464,216 102,653,745
202 2016 Annual Report Canal de Isabel II
Projects completed
2014 2015 2016 No. supply projects 4 11 8 No. sanitation projects 12 7 17
No. reuse projects 5 0 1
No. construction/architecture projects 4 4 6 Renovation of networks and other projects 0 54 48 SUM 25 76 80 Budget for supply projects (millions of euros) 41.94 52.37 35.78 Budget for sanitation projects (millions of euros) 66.79 68.00 58.33 Budget for reuse projects (millions of euros) 30.12 0 10.23 Budget for construction/architecture projects 2.11 1.66 1.82 (millions of euros) Budget for renovation of networks and other projects 0 77.32 60.74 (millions of euros) SUM (millions of euros) 140.96 199.35 166.90 No. of construction management projects 5 3 3 Budget for construction management projects 0.87 0.42 0.17 (millions of euros) No. of environmental procedures completed 12 17 23 No. of Environmental Impact Statements 0 6 2
203 APPENDIX I
Public procurement (procedure type)
2014 2015 2016 Open procedure No. of contracts 235 272 200 Percentage of total contracts 77.56% 73.91% 80.32% Amount awarded (euros) 338,639,630 289,561,846 365,287,026 Percentage of total amount awarded 95.21% 78.26% 95.07% Orders to group companies No. of orders 24 33 18 Percentage of total contracts 7.92% 8.97% 7.23% Amount awarded (euros) 12,300,010 63,718,683 11,634,657 Percentage of total amount awarded 3.46% 17.22% 3.03% Negotiated procedure No. of contracts 43 58 26 Percentage of total contracts 14.19% 15.76% 10.44% Amount awarded (euros) 4,547,352 14,404,207 4,812,570 Percentage of total amount awarded 1.28% 3.89% 1.25% Other No. of contracts 1 5 5 Percentage of total contracts 0.33% 1.36% 2.01% Amount awarded (euros) 200,554 2,314,650 2,497,856 Percentage of total amount awarded 0.06% 0.63% 0.65% Detail of procedure type Total no. of contracts 303 368 249 Total amount awarded (euros) 355,687,546 369,999,386 384,232,109
204 2016 Annual Report Canal de Isabel II
Public procurement (contract type)
2014 2015 2016
Works contract No. of contracts 106 106 68 Percentage of total contracts 34.98% 31.64% 29.44% Amount awarded (euros) 84,136,768 115,992,750 55,809,965 Percentage of total amount awarded 23.65% 37.87% 14.98% Service contract No. of contracts 147 166 101 Percentage of total contracts 48.51% 49.55% 43.72% Amount awarded (euros) 178,932,769 91,487,960 217,173,715 Percentage of total amount awarded 50.31% 29.87% 58.29% Supply contracts No. of contracts 50 63 62 Percentage of total contracts 16.50% 18.81% 26.84% Amount awarded (euros) 92,618,009 98,799,993 99,613,772 Percentage of total amount awarded 26.04% 32.26% 26.73% Detail of contracts per awarded contract type Total no. of contracts 303 335 231 Total amount awarded (euros) 355,687,546 306,280,703 372,597,452
205 APPENDICES
APPENDIX I
APPENDIX II MAIN AGGREGATE FIGURES OF THE CANAL DE ISABEL II BUSINESS GROUP (2014-2016)
APPENDIX III APPENDIX IV APPENDIX V 2016 Annual Report Canal de Isabel II
NOTE: In this appendix, unless otherwise indicated, the data for Canal de Isabel II includes the activities in the Autonomous Community of Madrid and those of the Canal de Isabel II delegation in Cáceres.
Customers and population served
Customers and population served
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Supply Supplied population [inhabitants] 6,250,414 6,315,517 6,355,007 3,084,671 3,159,161 3,106,451 398,370 396,725 396,760 9,733,455 9,871,404 9,858,218 Municipalities served 188 186 183 20 20 20 8 8 8 216 214 211 Sanitation Population with sewerage service [inhabitants] 5,485,401 5,568,841 5,596,192 2,571,742 2,603,655 2,622,596 371,774 339,365 337,725 8,428,917 8,511,861 8,556,512 Municipalities with sewerage service 145 143 137 12 14 14 8 8 8 165 165 159 Purification Covered population [inhabitants] 6,461,390 6,535,306 6,559,838 1,243,516 666,678 769,054 165,774 140,615 337,725 7,870,680 7,342,599 7,666,617 Municipalities where wastewater is treated 183 185 182 10 9 10 7 7 7 200 201 199 Number of contracts 1,420,144 1,467,247 1,477,788 612,700 638,345 669,056 123,598 121,939 122,254 2,156,442 2,227,531 2,269,098
207 APPENDIX II
Breakdown of population served (inhabitants) by country, service and company, and coverage in % of population
COVERAGE IN 2016
INHAB. SUPPLY 2016 INHAB. SEWERAGE 2016 INHAB. PURIF. 2016 SUPPLY SEWERAGE PURIFICATION Canal de Isabel II in the Autonomous Community of Madrid 6,245,118 5,498,097 6,458,497 96.57% 85.02% 99.87% Canal de Isabel II in Castilla La Mancha 11,793 - 4,250 71.28% 0.00% 25.69% Canal System (ACM+CLM) 6,256,911 5,498,097 6,462,747 96.50% 84.80% 99.68% Canal de Isabel II Cáceres 98,095 98,095 97,091 100.00% 100.00% 98.98% Total Canal de Isabel II 6,355,006 5,596,192 6,559,838 96.56% 85.03% 99.67% Aguas de Alcalá UTE 195,907 195,907 - 100.00% 100.00% 0.00% Canal Gestión Lanzarote 200,853 141,818 141,818 100.00% 70.61% 70.61% TOTAL GROUP IN SPAIN 6,751,766 5,933,917 6,701,656 99.55% 87.49% 98.81% Triple A Barranquilla (Colombia) 2,216,818 1,891,297 630,103 98.04% 83.64% 27.87% Metroagua (Colombia) 486,405 431,488 - 93.00% 82.50% 0.00% ASAA (Colombia) 193,829 161,196 - 88.50% 73.60% 0.00% TOTAL GROUP IN COLOMBIA 2,897,052 2,483,981 630,103 96.47% 82.71% 20.98% Amagua (Ecuador) 174,869 138,896 138,896 93.02% 73.89% 73.89% Fontes da Serra (Brazil) 34,648 - - 65.10% 0.00% 0.00% Aguas de Tumbes (Peru) 188,612 112,106 76,075 82.56% 49.07% 33.30% TOTAL GROUP IN LATIN AMERICA 3,295,182 2,734,983 845,074 94.88% 78.75% 24.33% TOTAL CAN/AL DE ISABEL II GROUP 10,046,948 8,668,900 7,546,730 97.97% 84.53% 73.59%
208 2016 Annual Report Canal de Isabel II Integral water cycle management figures
Supply: natural contributions by rivers and water rerouted for consumption of reservoirs and catchments in millions of cubic metres
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Natural contributions Natural contributions [hm3] 822 481 734 174,928 142,977 151,900 175,751 143,459 152,634 Surface catchments No. reservoirs or river or sea surface 18 18 15 9 9 9 6 6 5 33 33 29 catchments Capacity of reservoirs and/or surface 951.90 970.56 965.40 304.45 304.45 1.89 1.89 1.89 953.79 1,276.90 1,271.74 catchments [hm3] No. of weirs 6 6 6 3 3 3 1 1 1 10 10 10 Groundwater catchments No. of groundwater catchments in operation 81 82 79 23 41 48 104 123 127 Capacity of groundwater catchments [hm3] 90.00 93.00 93.00 0.03 0.07 0.07 90.03 93.07 93.07 Water rerouted for consumption Water rerouted for consumption [hm3] 499.43 506.68 501.20 295.95 308.75 306.29 40.39 41.97 41.14 835.77 857.40 848.60
209 APPENDIX II
Treatment and distribution figures
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Treatment DWTP inflow volume [hm3] 490 504 499 268 274 276 57 56 57 814 834 832 Treated water volume [hm3] 490 504 499 270 276 269 25 27 26 785 806 794 No. of drinking water treatment plants 17 17 15 8 8 8 4 5 5 29 30 28 Treatment capacity [hm3/day] 4.58 4.58 4.60 0.89 0.89 0.89 0.14 0.16 0.16 5.61 5.63 5.65 Distribution No. of large pipes 23 23 23 23 23 23 No. of major regulating reservoirs 33 33 33 1 1 1 2 2 2 36 36 36 Storage capacity of major deposits [hm3] 3.20 3.20 3.16 0.05 0.05 0.07 0.10 0.10 0.06 3.35 3.35 3.30 No. of small deposits 307 315 300 47 47 48 63 63 67 417 425 415 Storage capacity of small deposits [hm3] 0.48 0.52 0.53 0.05 0.05 1.68 0.14 0.14 0.11 0.67 0.71 2.32 No. of major lifting stations 21 24 25 11 11 11 4 4 4 36 39 40 No. of smaller lifting stations 120 124 111 27 27 27 30 30 26 177 181 164
Sewerage figures
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 No. of WWPS's 127 126 134 142 157 170 76 77 79 345 360 383 No. of buffering basins and storm tanks 63 63 65 3 4 4 66 67 69 managed Capacity of storm tanks managed [hm3] 1.470 1.470 1.483 0.002 0.007 0.007 1.472 1.477 1.490 Spillways and overflow weirs in the entire 578 603 603 10 10 10 54 54 54 642 667 667 sewerage system
210 2016 Annual Report Canal de Isabel II
Wastewater treatment figures
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Number of wastewater treatment plants 157 160 160 78 85 93 8 8 8 243 253 261 Treated volume in WWTPs (hm3) 494.59 463.82 495.67 39.48 44.06 46.67 6.79 3.24 2.32 540.86 511.12 544.66 Design flow rate (hm3/day) 3.20 3.26 3.26 0.18 0.20 0.20 0.02 0.02 0.02 3.40 3.48 3.49
Contamination removed in wastewater treatment
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 AVERAGE QUALITY OF INFLOWING WATER (mg/l) DBO5 of inflowing water 309 310 302 250 213 238 492 492 463 306 305 299 Suspended solids in inflowing water 264 274 264 224 199 218 296 286 311 261 269 261 AVERAGE QUALITY OF PURIFIED WATER (mg/l) DBO5 of purified water 9 10 9 61 61 53 14 13 14 13 Suspended solids in purified water 10 12 11 54 45 45 21 13 15 14 POLLUTION LOAD ELIMIN/ATED (tn/year) DBO5 of eliminated pollution load 145,046 146,032 156,915 3,966 4,334 4,891 1,989 3,185 3,075 133,582 133,878 144,038 Suspended solids 125,889 132,777 135,736 4,333 3,945 4,481 1,163 1,776 2,043 116,000 121,712 124,615 PURIFICATION YIELD (% eliminated) DBO5 97 97 97 71 71 78 97 95 99 95 95 96 Suspended solids 95 96 96 77 73 79 95 91 93 94 94 94 COD 93 93 93 52 50 63 93 90 93 91 91 90 Phosphorus 91 92 91 0 0 18 73 68 92 91 91 85 Nitrogen 55 56 61 15 12 32 64 43 78 53 53 59
211 APPENDIX II
Regenerated wastewater reuse figures
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 No. of regenerated water plants in service 18 21 23 9 16 17 6 5 5 33 42 45 No. of reuse deposits in service 33 35 63 3 4 4 36 39 67 Volume of regenerated water produced [hm3] 12 13 12 2 4 4 3 3 3 17 20 20 Total irrigated surface area [ha] 1,740 1,913 2,374 N/A N/A N/A 588 623 534 2,328 2,536 2,908
212 2016 Annual Report Canal de Isabel II Efficient resource management figures
Figures in the fight against fraud
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Communications received on suspected acts of 10,389 9,521 6,702 76,775 70,509 73,995 1,292 2,800 2,872 88,456 82,830 83,569 fraud No. of irregularities detected 3,012 3,207 212 14,669 8,209 9,392 560 625 782 18,241 12,041 10,386 No. of irregularities handled by the courts 77 138 98 47 37 59 124 175 157 Amount of water claimed in court [m3] 642,115 815,929 441,004 38,022 21,828 642,115 853,951 462,832 Estimated amount of water by court rulings [m3] 3,259,829 5,121,099 5,585,580 92,720 696,648 973,785 104,281 3,352,549 5,817,747 6,663,646 Water accounted for in complaints/conviction [m3] 3,901,944 5,937,028 6,026,584 92,720 696,648 973,785 38,022 126,109 3,994,664 6,671,698 7,126,478 Revenue from court settlements in euros 311,914 1,271,421 313,586 0 311,914 1,271,421 313,586 Revenue from penalty proceedings in euros 419,097 439,945 12,900 419,097 439,945 12,900 Revenue from out-of-court settlements in euros 2,473 1,629 690,141 695,707 727,843 128,558 35,423 81,254 818,699 733,603 810,726 Total revenues through actions involving 731,011 1,713,839 328,114 690,141 695,707 727,843 128,558 35,423 81,254 1,549,710 2,444,969 1,137,212 fraud in euros Economic valuation of fraud claimed in court [€] 930,816 1,169,989 627,715 118,183 110,647 160,375 1,048,999 1,280,636 788,089 No. of penalty proceedings initiated 6,397 2,427 459 0 0 6,397 2,427 459 No. of convictions for single connections 1,037 827 939 5,252 5,652 7,001 62 35 59 6,351 6,514 7,999
Breakage
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Breakage rate for every 1000 km 148.49 135.90 116.41 1,927.63 2,161.61 1,726.89 3,466.24 3,388.47 3,743.09 811.11 880.21 783.10 Breakage rate for every 1000 connections 9.00 9.28 7.43 52.27 47.87 44.12 18.02 36.25 40.05 28.49 27.96 25.96
213 APPENDIX II
Data on losses and self-consumption (% of volume rerouted for consumption in the hydrological year)
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Estimation of actual losses in adduction 5.50 5.51 3.45 44.72 41.09 36.78 40.79 37.05 37.78 21.08 19.86 17.23 and distribution Hidden losses in the distribution network 3.69 3.89 1.98 18.02 25.40 19.92 28.57 3.98 4.07 9.98 11.63 8.58 % self-consumption 0.99 1.08 1.02 3.83 5.43 4.89 0.04 0.79 0.40 1.94 2.57 2.39
Renovation of networks
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Supply Length of managed network [km] 17,564 17,999 17,859 4,865 5,071 5,295 2,370 2,790 2,359 24,799 25,860 25,512 Kilometres of network renovated 142 103 119 37 39 18 6 26 28 185 167 165 Renovation rate (% renovated) 0.81 0.57 0.67 0.76 0.76 0.35 0.26 0.93 1.17 0.75 0.65 0.65 Sanitation Length of managed network [km] 14,051 15,030 15,193 3,505 3,540 3,707 631 663 663 18,187 19,234 19,563 Large collectors and outfalls [km] 793 942 935 397 397 430 10 17 17 1,200 1,355 1,382 Municipal sewerage networks [km] 13,258 14,088 14,258 3,108 3,143 3,277 621 647 647 16,987 17,878 18,181 Kilometres of network renovated 18.73 25.37 13.64 93.37 26.30 20.39 0.01 0.10 0.48 112.11 51.77 34.51 Renovation rate (% renovated) 0.13 0.17 0.09 2.66 0.74 0.55 0.00 0.02 0.07 0.62 0.27 0.18 Reuse Length of managed network [km] 421 493 512 496 496 508 917 989 1,020 Kilometres of network renovated 0.03 0.07 0.00 0.00 0.00 0.00 0.00 10.00 12.10 0.03 10.07 12.10 Renovation rate (% renovated) 0.006 0.013 0.000 0.000 2.016 2.381 0.003 1.017 1.186
214 2016 Annual Report Canal de Isabel II
Water quality figures
Summary of types of checks performed
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 WWTP effluents Analysed samples 7,399 8,191 9,354 1,321 1,720 1,891 750 1,505 1,459 9,470 11,416 12,704 Analyses performed 60,276 58,336 66,412 21,801 20,817 22,110 6,528 11,412 10,728 88,605 90,565 99,250 Regenerated water Analysed samples 4,855 5,316 7,265 911 986 889 5,766 6,302 8,154 Analyses performed 27,994 29,874 34,066 7,648 7,318 5,787 35,642 37,192 39,853 Discharges (industrial) Analysed samples 86 149 141 772 384 442 2 26 7 860 559 590 Analyses performed 1,043 1,452 1,522 9,990 6,371 6,380 10 15 41 11,043 7,838 7,943 Water at source Analysed samples 7,946 13,826 16,009 6,989 7,094 7,318 35 50 54 14,970 20,970 23,381 Analyses performed 102,464 109,576 116,397 38,647 40,793 40,652 245 350 399 141,356 150,719 157,448 Water before distribution Analysed samples 21,773 56,959 68,396 10,773 12,481 12,391 2,356 2,155 1,492 34,902 71,595 82,279 Analyses performed 383,214 452,526 474,564 55,567 57,970 63,615 14,706 13,450 11,397 453,487 523,946 549,576 Distribution network Analysed samples 21,645 25,420 26,068 16,340 18,910 16,386 6,232 5,883 10,596 44,217 50,213 53,050 Analyses performed 369,918 390,842 393,253 153,200 152,496 150,219 37,906 38,019 44,837 561,024 581,357 588,309 Analysis for other organisms Analysed samples 656 691 715 4,071 3,560 4,996 4,727 4,251 5,711 Analyses performed 15,352 16,551 16,165 44,948 38,058 34,936 60,300 54,609 51,101 Automatic surveillance (water for consumption) Analysed samples 700,975 700,800 700,800 33 31 700,975 700,833 700,831 Analyses performed 6,099,129 6,096,960 6,096,960 15,797,538 13,851,763 6,099,129 21,894,498 19,948,723
215 APPENDIX II
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Automatic surveillance (regenerated water) Analysed samples 340,704 498,672 498,672 340,704 498,672 498,672 Analyses performed 681,408 1,102,464 1,102,464 681,408 1,102,464 1,102,464 Virus analyses Analysed samples 94 88 90 94 88 90 Analyses performed 188 176 180 188 176 180
216 2016 Annual Report Canal de Isabel II
Customer service quality
Customer service statistics
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 No. of fixed sales offices 13 11 12 25 41 38 5 9 9 43 61 59 No. of telephone calls fielded 1,177,644 1,171,581 1,032,732 792,120 851,511 765,388 51,140 51,000 58,922 2,020,904 2,074,092 1,857,042 HQ visits 40,362 36,304 27,716 276,207 325,010 401,008 90,221 74,115 68,812 406,790 435,429 497,536
Detailed virtual office statistics
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Virtual office customers 158,647 195,091 225,951 213,630 907,174 951,677 5,001 5,888 6,617 377,278 1,108,153 1,184,245 Virtual office contracts 227,487 274,758 312,466 21,767 249,254 274,758 312,466 Customers with e-billing 50,216 86,344 131,514 17,052 65,210 67,080 6,190 7,495 9,111 73,458 159,049 207,705 Electronic bills issued 373,972 634,572 895,434 179,313 650,931 791,050 34,501 37,147 56,377 587,786 1,322,650 1,742,861
Degree of compliance with the service charter
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Compliance rate [%] 96 99 99 69 100 100 99 100 99 78 99 99
217 APPENDIX II
Billing claim
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Bills issued 8,424,834 8,593,788 8,767,282 6,461,483 7,216,206 10,905,421 726,723 752,812 724,898 15,613,040 16,562,806 20,397,601 % claims received on invoices issued 0.25 0.24 0.25 0.68 0.53 0.36 0.46 0.47 0.28 0.44 0.38 0.31 % favourable to the customer 72 72 75 38 29 25 64 70 74 50 46 44
Customer satisfaction level
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Company Satisfaction level (1-10) 7.6 7.8 7.8 7.5 7.5 8.4 6.9 6.6 7.6 7.7 8.0 % of customers who would recommend the service 87 90 90 92 80 86 88 87 88 Sector Satisfaction level (1-10) 7.0 7.0 7.0 7.5 7.4 8.0 7.0 7.0 7.0 7.1 7.1 7.3 % of customers who would recommend the service 73 69 69 95 70 92 73 69 69 79 69 75
218 2016 Annual Report Canal de Isabel II
Consumption and energy production
Electricity consumption and production (kWh)
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Electricity consumption by activity Supply 101,230,678 136,159,464 141,526,739 149,566,197 155,412,236 151,596,385 128,875,457 121,143,465 108,584,138 379,672,332 412,715,165 401,707,262 Sanitation 258,661,420 267,292,983 271,894,509 13,515,329 15,830,671 17,567,488 9,919,665 9,554,149 9,652,396 282,096,414 292,677,803 299,114,393 Other areas 14,822,781 14,254,084 25,203,703 2,599,810 2,740,900 2,689,421 2,042,629 1,542,136 1,928,090 19,465,219 18,537,120 29,821,214 Electricity consumption per m3 of rerouted water 0.750 0.824 0.874 0.556 0.560 0.561 3.453 3.125 2.921 0.812 0.842 0.861 Electricity production Self-consumption 96,331,312 121,331,347 119,692,156 64,000,670 70,728,180 71,350,160 17,343,772 390,536 669,490 177,675,754 192,450,063 191,711,806 Sold to the grid 49,045,333 61,379,627 141,049,748 134,675,113 120,094,597 141,049,748
Fuel consumption of the two main companies in Grupo Canal
CANAL DE ISABEL II TRIPLE A BARRANQUILLA FUEL TYPE (AUTONOMOUS COMMUNITY OF MADRID) (COLOMBIA) 2014 2015 2016 2014 2015 2016 Natural gas in cogeneration facilities (kWh PCS/year) 141,315,060 175,913,794 180,862,708 83,788,516 185,185,878 186,828,552 Natural gas in building boilers (in m3/year) 115,160 103,600 121,536 Diesel fuel in boilers in company buildings and processes (in litres/year) 125,670 230,320 165,975 Diesel fuel in vehicles and machinery (in litres/year) 652,731 676,981 669,436 2,194,399 2,793,095 2,283,306 Gasoline in vehicles (in litres/year) 28,691 25,985 22,638 250,215 277,920 179,577 Compressed natural gas in vehicles (tonnes per year) 245.08 238.71 115.83
219 APPENDIX II
Total power consumption of the two main companies in Grupo Canal (Gigajoules per year)
CANAL DE ISABEL II TRIPLE A BARRANQUILLA FUEL TYPE (AUTONOMOUS COMMUNITY OF MADRID) (COLOMBIA) 2014 2015 2016 2014 2015 2016 Electricity consumption (GJ per year) 1,382,827 1,484,221 1,509,471 424,032 307,249 296,948 Natural gas in cogeneration facilities (GJ per year) 444,727 551,882 570,080 263,688 582,791 587,961 Natural gas in building boilers (GJ per year) 4,492 4,041 4,741 Diesel fuel in boilers of company buildings and processes (GJ per year) 4,491 7,562 6,409 Diesel fuel in vehicles and machinery (GJ per year) 23,545 24,420 24,148 79,155 100,751 82,362 Gasoline in vehicles (GJ per year) 961 870 758 8,381 9,309 6,015 Compressed natural gas in vehicles (GJ per year) 13,893.70 13,532.71 6,566.43 SUM 1,861,043 2,072,996 2,115,607 789,149 1,013,633 979,852
220 2016 Annual Report Canal de Isabel II
Waste produced and managed by the companies
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES GROUP TOTAL 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Non-hazardous waste (kg) 24,272,806 29,884,885 32,589,503 1,529,061 5,358,418 11,541,528 3,665,297 3,644,471 5,224,673 29,467,164 38,887,773 49,355,703 Hazardous waste (kg) 305,174 441,541 282,660 18,103 26,269 11,993 18,763 16,035 18,204 342,040 483,846 312,797
221 APPENDIX II
Employee figures
Workforce diversity
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Total workforce 2,440 2,517 2,590 2,901 2,954 3,053 794 805 826 6,135 6,276 6,469 Interns and trainees 91 75 83 213 188 204 4 16 10 308 279 297 According to workday type Full-time 2,274 2,399 2,476 2,827 2,914 3,052 772 775 799 5,873 6,088 6,327 Part-time 166 118 114 74 40 1 22 30 27 262 188 142 According to contract type Indefinite 1,539 1,594 1,581 2,800 2,898 2,982 471 496 485 4,810 4,988 5,048 Temporary 735 805 895 27 16 71 301 279 314 1,063 1,100 1,280 By sex Women 445 774 816 751 773 782 74 135 138 1,270 1,682 1,736 Men 1,094 1,743 1,774 2,051 2,181 2,271 397 670 688 3,542 4,594 4,733 Disabled employees Workers with some degree of disability 23 21 22 5 22 18 7 12 11 35 55 51 External workers No. of external workers 4,935 2,985 3,372 6,666 5,876 2,788 367 541 390 11,968 9,402 6,550
222 2016 Annual Report Canal de Isabel II
Retention and hiring
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Men Employees entitled to paternity leave 16 32 35 20 66 25 17 15 14 53 113 74 Employees who ended paternity leave in the 16 34 30 20 21 25 17 10 20 53 65 75 previous year Employees reinstated after paternity leave in the 13 34 32 19 20 25 17 10 19 49 64 76 previous year Employees who retain employment 12 months 12 34 32 17 18 19 13 10 13 42 62 64 after reinstatement Rate of reinstatement [%] 81 100 107 95 95 100 100 100 95 92 98 101 Rate of retention [%] 92 100 100 89 90 76 76 100 68 86 97 84 Women Employees entitled to maternity leave 7 17 16 45 85 57 5 4 4 57 106 77 Employees who ended maternity leave in the 7 18 15 45 46 36 5 4 3 57 68 54 previous year Employees reinstated after maternity leave in 7 18 17 43 45 35 5 4 3 55 67 55 the previous year Employees who retain employment 12 months 7 18 17 38 34 41 3 4 2 48 56 60 after reinstatement Rate of reinstatement [%] 100 100 113 96 98 97 100 100 100 96 99 102 Rate of retention [%] 100 100 100 88 76 117 60 100 67 87 84 109 TOTAL Employees entitled to leave 23 49 51 65 151 82 22 19 18 110 219 151 Employees who ended leave in the previous year 23 52 45 65 67 61 22 14 23 110 133 129 Employees reinstated after paternity leave in the 20 52 49 62 65 60 22 14 22 104 131 131 previous year Employees who retain employment 12 months 19 52 49 55 52 60 16 14 15 90 118 124 after reinstatement Rate of reinstatement [%] 87 100 109 95 97 98 100 100 96 95 98 102 Rate of retention [%] 95 100 100 89 80 100 73 100 68 87 90 95
223 APPENDIX II
Employee turnover
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Total hires 29 375 324 912 759 639 106 110 128 1,047 1,244 1,091 Men 15 276 194 712 620 497 87 98 108 814 994 799 Women 14 99 130 200 139 142 19 12 20 233 250 292 Under 30 years old 3 196 231 463 379 297 21 22 37 487 597 565 30-50 years old 20 141 88 402 325 307 80 84 78 502 550 473 Over 50 years old 6 38 5 47 55 35 5 4 13 58 97 53 Total departures 57 286 251 728 676 659 59 99 107 844 1,061 1,017 Men 24 214 163 556 518 472 53 91 90 633 823 725 Women 33 72 88 172 158 187 6 8 17 211 238 292 Under 30 years old 102 104 345 307 264 5 17 20 350 426 388 30-50 years old 13 92 87 337 318 326 40 70 66 390 480 479 Over 50 years old 44 92 60 46 51 69 14 12 21 104 155 150 Voluntary departures 1 55 40 230 182 167 17 13 15 248 250 222 Men 35 14 148 126 101 15 12 15 163 173 130 Women 1 20 26 82 56 66 2 1 85 77 92 Under 30 years old 30 28 110 83 91 2 5 8 112 118 127 30-50 years old 24 12 111 89 66 12 8 6 123 121 84 Over 50 years old 1 1 9 10 10 3 1 13 11 11
224 2016 Annual Report Canal de Isabel II
Occupational safety and health
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Occupational accidents and diseases Total number of workers exposed to occupational 2,314 2,396 2,486 2,909 2,913 3,057 792 808 824 6,015 6,116 6,367 risks Accidents at work (excluding in itinere) 104 125 124 55 45 89 152 160 147 311 330 360 Accidents with sick leave (excluding in itinere) 48 69 67 40 47 69 58 70 57 146 186 193 Average duration [days] 24 16 16 23 12 15 16 22 15 21 17 15 Days lost 1,159 1,080 1,093 936 570 1,010 939 1,568 867 3,034 3,218 2,970 Frequency rate of accidents with sick leave 12 17 16 6 6 10 38 52 42 12 15 16 Frequency rate of total accidents (excl. in itinere) 27 31 30 9 6 13 99 119 109 26 26 29 Severity rate 0.30 0.27 0.26 0.15 0.08 0.15 0.61 1.17 0.64 0.26 0.26 0.24 Incidence rate (excluding in itinere) 20.74 28.80 26.95 13.75 16.14 22.57 73.23 86.69 69.18 24.27 30.41 30.31 Fatal victims (Number) 1 1 No. of cases of occupational diseases 2 1 2 1 Rate of occupational diseases 0.0003 0.0001 0.0002 0.0001 Hours worked Hours worked 3,853,036 4,000,450 4,136,597 6,418,946 7,246,706 6,895,379 1,538,835 1,342,894 1,347,493 11,810,818 12,590,049 12,379,469 Total hours worked by employees with indefinite 3,853,036 2,648,193 2,667,522 6,418,946 7,139,381 6,811,689 1,538,835 845,015 815,641 11,810,818 10,632,589 10,294,851 contracts Total hours worked by employees with temporary 1,352,257 1,469,076 107,325 83,690 497,879 531,852 1,957,460 2,084,618 contracts Absenteeism Absenteeism (Hours) 149,191 171,830 178,566 48,475 34,160 70,336 74,239 79,970 62,341 271,906 285,961 311,244 Hours lost due to absenteeism of permanent 149,191 139,107 138,523 48,475 33,944 65,107 74,239 57,051 52,148 271,906 230,102 255,778 employees Hours lost due to absenteeism of temporary 32,723 40,044 216 5,229 22,920 10,193 55,859 55,465 employees Total absenteeism (%) 4 4 4 1 0 1 5 6 5 2 2 3 Absenteeism of employees with indefinite contracts 3.87 5.25 5.19 0.76 0.48 0.96 4.82 6.75 6.39 2.30 2.16 2.55 Absenteeism of employees with temporary 2 3 0 6 5 2 3 3 contracts % workers in Occupational Health and Safety 99 100 100 39 38 52 100 100 94 70 71 76 committees
225 APPENDIX II
Theme-based training
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Technical training [hours] 23,786 26,905 24,069 10,285 8,375 7,394 3,306 764 308 37,377 36,043 31,771 Others [hours] 97,224 84,236 86,483 53,264 55,398 43,089 5,834 5,040 5,135 156,323 144,674 134,706
Average training hours
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Executives Men 15 9 13 70 57 58 36 13 26 14 Women 19 12 16 50 39 7 34 16 27 16 Total 16 10 14 61 48 45 35 14 26 15 Management support Men 16 13 23 65 40 2 23 20 17 Women 18 14 16 64 43 16 26 18 Total 17 14 19 65 41 2 19 22 17 Post-graduate degree holders Men 13 15 11 52 47 43 52 7 16 20 20 16 Women 13 15 14 56 35 38 36 31 30 19 17 15 Total 13 15 12 54 42 42 45 22 22 19 18 15 Graduate degree holders Men 14 21 17 34 64 33 28 26 23 24 25 18 Women 13 21 18 37 37 12 21 23 29 18 24 18 Total 13 21 18 35 51 22 25 24 27 20 24 18 Middle managers Men 15 11 6 21 15 15 33 6 16 12 Women 14 24 28 15 50 80 22 28 17 40 Total 15 12 17 19 27 25 32 17 16 16
226 2016 Annual Report Canal de Isabel II
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Technicians Men 13 16 13 31 39 21 36 15 25 22 22 15 Women 13 22 16 62 87 57 38 34 19 16 23 17 Total 13 18 14 37 41 23 36 17 24 18 22 16 Clerical and administrative staff Men 14 12 24 39 20 27 14 24 25 15 Women 14 11 24 36 23 13 12 24 20 14 Total 14 12 24 38 22 16 13 24 22 15 Office staff Men 12 10 10 11 19 13 13 13 12 11 10 Women 16 21 10 10 6 93 2 16 15 36 Total 13 10 10 11 18 16 13 13 13 11 11
Wages
SPAIN COLOMBIA 2014 2015 2016 2014 2015 2016 Starting entry-level annual salary 16,355 16,518 16,670 3,377 3,203 2,952 Annual interprofessional minimum wage in the country 9,034 9,080 9,173 2,780 2,542 2,491 Starting annual salary/interprofessional minimum wage [%] 181 182 182 121 126 119
Social benefits
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Number of persons with disability or invalidity N/A 4 3 197 15 0 4 3 2 201 22 5 coverage Registered in sports activities promoted by the 598 813 748 560 612 598 1,373 1,360 company Social benefit expense [€] 302,670 269,761 417,953 3,820,254 4,122,444 4,937,257 37,653 36,803 39,594 4,160,576 4,429,008 5,394,805
227 APPENDIX II
Expenditure in R&D&i and information technology and telecommunications
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 R&D&i & ICT R&D&i expenses [euros] 4,793,800 4,831,579 3,530,206 1,043,742 1,706,294 484,711 5,837,542 6,537,873 4,014,917 ICT expenses [euros] 14,217,118 15,511,725 16,958,098 3,064,125 3,187,870 3,322,367 2,050,501 5,867,150 5,280,537 19,331,744 24,566,746 25,561,002
228 2016 Annual Report Canal de Isabel II
Economic performance and investments
Main financial figures for Canal de Isabel II (individual) and Grupo Canal (consolidated) (in millions of euros)
CANAL DE ISABEL II, S.A. (individual) CANAL DE ISABEL II GROUP (consolidated) 2014 2015 2016 2014 2015 2016 Net turnover 830.7 861.3 866.8 Ordinary income 1,064.6 1,120.9 1,104.2 FY profit/loss 225.7 232.7 232.0 FY profit/loss 205.1 225.6 245.6 Net equity 2,992.9 3,151.1 3,172.6 Net equity 2,250.2 2,390.1 2,427.4 EBITDA 309.1 332.0 332.0 EBITDA 346.5 378.1 375.6 Indebtedness 1,137.9 1,108.0 982.2 Indebtedness 1,225.1 1,186.1 1,082.9 Indebtedness/EBITDA 3.68 3.34 2.96 Indebtedness/EBITDA 3.54 3.14 2.88
Investment in euros
CANAL DE ISABEL II INTERNATIONAL SUBSIDIARIES NATIONAL SUBSIDIARIES TOTAL RESULT 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Land and buildings 12,617,037 17,389,615 10,507,601 1,167,554 1,452,993 855,842 333,572 1,502,476 89,292 14,118,163 20,345,084 11,452,736 Catchments and large pipes 22,172,255 18,182,630 24,668,978 191,476 919,705 553,590 1,732,941 4,680,756 2,063,949 24,096,671 23,783,090 27,286,517 DWTPs 4,687,456 11,255,544 4,158,340 1,024,611 1,014,306 582,059 5,712,067 12,269,850 4,740,399 Distribution networks 38,248,635 40,377,856 37,585,504 5,453,163 6,579,672 4,088,356 294,176 2,738,626 4,366,731 43,995,975 49,696,154 46,040,591 Technical compliance 2,447,327 325,454 8,939,057 1,257,420 490,479 3,457,023 104,063 74,678 3,808,809 890,611 12,396,080 Sanitation networks 17,108,392 15,063,160 13,937,326 7,150,682 7,102,216 5,793,104 138,790 1,582,135 5,036 24,397,864 23,747,511 19,735,466 WWTPs 32,347,510 35,275,701 24,377,407 476,473 602,385 208,293 42,791 1,032,146 1,753 32,866,774 36,910,232 24,587,453 Reuse networks 5,630,698 6,327,273 12,757,961 43,125 366,955 608,963 5,673,823 6,694,227 13,366,924 Deposits 6,844,668 6,925,933 6,708,384 379,003 123,308 50,468 860,037 3,826,787 2,386,473 8,083,708 10,876,028 9,145,326 Information and remote control systems 16,899,493 11,000,660 12,028,610 1,253,163 663,675 515,022 414,821 353,358 102,758 18,567,478 12,017,693 12,646,390 Other items 16,868,489 51,947,276 11,581,171 8,614,135 7,116,256 8,402,663 771,840 745,302 1,406,730 26,254,464 59,808,834 21,390,563 Total result 175,871,960 214,071,102 167,250,340 26,967,679 26,064,995 24,506,419 4,736,157 16,903,218 11,031,685 207,575,795 257,039,314 202,788,444
229 APPENDICES
APPENDIX I APPENDIX II
APPENDIX III BASIC TECHNICAL INFORMATION (2016) OF THE CANAL DE ISABEL II BUSINESS GROUP COMPANIES
APPENDIX IV
APPENDIX V 2016 Annual Report Canal de Isabel II
I. Companies devoted to managing the integral water cycle
Canal de Isabel II (Autonomous Community of Madrid, Spain)
Canal de Isabel II, S.A. is the head company of the Canal business group, providing all the services related to the integral water cycle: supply, sanitation and wastewater reuse. Ente Público Canal de Isabel II holds 82.40% of the company’s shares, and the remaining 17.60% is held by the town councils of 111 municipalities in the Autonomous Community of Madrid.
The company provides integral water cycle management services to 179 municipalities in the Autonomous Community of Madrid and seven neighbouring municipalities located in the Autonomous Communities of Castilla-La Mancha and Castilla y León. The company’s main technical figures at 31 December 2016 were as follows:
SUPPLY
Number of reservoirs 14
Reservoir capacity (millions of cubic metres) 945.9 Water rerouted for consumption in reservoirs and wells in 2016 (millions of cubic metres) 491.5 Number of catchment wells in operation 78 Kilometres of network (adduction and distribution) 17,434 Number of drinking water treatment plants 14 Treatment capacity (millions of cubic metres per day) 4.55 No. of major regulating reservoirs 33 Storage capacity of large deposits (millions of cubic metres) 3.2 Number of small deposits 291 Number of major lifting stations 22
SANITATION
Kilometres of managed municipal sewerage networks 14,018
Kilometres of large collector and outfall networks 823 Number of buffering basins and storm tanks managed 65 Capacity of storm tanks managed (millions of cubic metres) 1.48 Number of wastewater pumping stations managed 133 Number of Wastewater Treatment Plants managed 157 Nominal treatment capacity (millions of equivalent inhabitants) 17.6 Water treated in WWTPs in 2016 487.3
231 APPENDIX III
REUSE
Number of existing reuse plants in 2016 23
Kilometres of regenerated water network managed 512 Regenerated water deposits 63 Volume of water regenerated in 2016 (millions of cubic metres) 12.41 Municipalities that have reuse agreements with Canal 22 Golf courses with agreements or contracts 10 Industries and other entities that have reuse agreements with Canal 11
CUSTOMERS AND POPULATION SERVED*
Number of contracts (millions) 1.45
Population supplied* (millions of inhabitants) 6.26 Supply coverage (% inhabitants) 96.50 Municipalities served by Canal 180 Population served in sewerage management (millions of inhabitants) 5.50 Sewerage management coverage (% inhabitants) 84.80 Municipalities managed in sewerage 134 Population served in wastewater treatment (millions of inhabitants) 6.46 Coverage in wastewater treatment** (% inhabitants) 99.68 Municipalities managed in wastewater treatment*** 180
* Includes the Autonomous Community of Madrid and 7 municipalities of Castilla-La Mancha and Castilla y León, which in 2016 totalled 16,545 inhabitants.
** Coverage of wastewater treatment in the Autonomous Community of Madrid is 99.87%.
*** Includes the Autonomous Community of Madrid and Ontígola (Toledo).
More information about the company’s activities can be found on the Canal website at the following link: http://www.canaldeisabelsegunda.es/en/
232 2016 Annual Report Canal de Isabel II
Canal de Isabel II also has a delegation in the city of Cáceres, in the Autonomous Community of Extremadura, which in 2016 provided services to 3 municipalities in Cáceres province. At the end of 2016, the main figures for this delegation were as follows:
SUPPLY
Number of managed intakes (reservoirs and wells) 2
Water rerouted for consumption in catchments in 2016 (millions of cubic metres) 9.72 Kilometres of network (conveyance + distribution) 424 Number of drinking water treatment plants 1 Daily treatment capacity (cubic metres per day) 47,520 Number of small deposits 9 Storage capacity of deposits (millions of cubic metres) 0.04
SANITATION
Kilometres of managed municipal sewerage networks 239
Kilometres of network of managed large collectors and outfalls 112 Number of Wastewater Treatment Plants managed 3 Nominal treatment capacity of WWTPs (thousands of equivalent inhabitants) 162.47 Water treated at WWTPs in 2016 (millions of cubic metres) 8.4
CUSTOMERS AND POPULATION SERVED*
Number of supply contracts with customers 28,860
Population supplied (inhabitants) 98,095 Supply coverage (% inhabitants over total area supplied) 100 Number of municipalities supplied 3 Population served in sewerage management (inhabitants) 98,095 Sewerage management coverage (% inhabitants out of the total area supplied) 100 Number of municipalities managed in sewerage 3 Population served in wastewater treatment (inhabitants) 97,091 Coverage in wastewater treatment (% inhabitants out of the total area supplied) 98.98 Number of municipalities managed in wastewater treatment 2
233 APPENDIX III
Aguas de Alcalá UTE (Alcalá de Heneres, Autonomous Community of Madrid, Spain)
Aguas de Alcalá UTE (also known as UTE Alcalá) is the temporary joint venture of concessionary companies (until 2030) to provide drinking water treatment and distribution services and municipal sewerage management services in the city of Alcalá de Henares (Madrid, Spain).
UTE Alcalá was 50% owned by Canal de Isabel II at the end of 2016. The remaining shares of the joint venture (50%) were owned by Aqualia Gestión Integral del Agua S.A. In 2016, UTE Alcalá provided services to the city’s 195,907 inhabitants, its main technical figures in 2016 being the following:
SUPPLY
Water derived for consumption in reservoirs and/or catchments (millions of cubic metres) 16.70
Kilometres of network (conveyance + distribution) 521 Number of drinking water treatment plants 1 Treatment capacity (millions of cubic metres per day) 0.07 Large regulating deposits 1 Storage capacity of large deposits (millions of cubic metres) 0.03 Number of small deposits 5 Storage capacity of deposits (millions of cubic metres) 0.039
SANITATION*
Kilometres of managed municipal sewerage networks 267
Kilometres of network of managed large collectors and outfalls 7 Number of wastewater pumping stations (WWPS’s) 6 Number of buffering basins and storm tanks managed 3 Capacity of storm tanks managed (cubic metres) 1,525
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 53,445
Population supplied (inhabitants) 195,907 Supply coverage (% inhabitants) 100 Number of municipalities supplied 1 Population served in sewerage management 195,907 Sewerage management coverage (% inhabitants) 100 Number of municipalities managed in sewerage 1
* Wastewater treatment in Alcalá de Henares is carried out by Canal de Isabel II.
For more information about Aguas de Alcalá, visit: http://www.aguasdealcala.es
234 2016 Annual Report Canal de Isabel II
Canal Gestión Lanzarote (Islands of Lanzarote and La Graciosa, Autonomous Community of the Canary Islands, Spain)
Canal Gestión Lanzarote, S.A.U. is a company wholly owned by Canal de Isabel II which manages the integral water cycle in the islands of Lanzarote and La Graciosa, in the Canary Islands (Spain). It serves the population of 7 municipalities which, in 2016, included 200,853 inhabitants and a floating population of 55,769 (permanent transit tourists). At the end of 2016, the company’s main figures were as follows:
SUPPLY
Number of seawater intakes managed 4 Water rerouted for consumption in catchments (millions of cubic metres in 2016) 24.44 Kilometres of network (conveyance + distribution) 1,838 Number of seawater desalination plants 4 Daily treatment capacity of desalination plants (millions of cubic metres) 0.09 Number of major regulating reservoirs 1 Storage capacity of large deposits (millions of cubic metres) 0.03 Number of small water deposits 62 Storage capacity of deposits (millions of cubic metres) 0.07
SANITATION
Kilometres of sewerage networks managed 389 Kilometres of network of managed large collectors and outfalls 10 Number of Wastewater Treatment Plants managed 8 Nominal treatment capacity (millions of equivalent inhabitants) 0.16 Water treated at WWTPs in 2016 (millions of cubic metres) 5.38
REUSE
Number of reuse plants built until 2016 5 Kilometres of regenerated water network built until 2016 508 Volume of water regenerated in 2016 (millions of cubic metres) 3.06
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 68,809 Population supplied* (inhabitants) 200,853 Supply coverage (% inhabitants) 100 Number of municipalities supplied 7 Population served in sewerage system and wastewater treatment management* (inhabitants) 141,818 Sewerage system and wastewater treatment management coverage (% inhabitants) 70.60 Number of municipalities managed in sewerage and wastewater treatment 7
* Includes 55,769 permanent transit tourists.
For more information about the company, visit: http://www.canalgestionlanzarote.es
235 APPENDIX III
Triple A (Barranquilla and Atlántico Department, Colombia)
Sociedad de Acueducto, Alcantarillado y Aseo S.A. E.S.P. - Triple A, provides all services related to the integral water cycle in the city of Barranquilla, the fourth largest city in Colombia, as well as in 14 other municipalities in the Department of Atlántico. Its outstanding achievements include the spectacular extension of service coverage and the fact that all municipalities are supplied 24 hours a day. In addition, the company provides the services of (solid waste management and urban cleaning) in Barranquilla and 3 other municipalities of the Department.
In 2016, the company supplied a total of 2,216,818 inhabitants. Canal has a 67.91% stake, the District of Barranquilla has another 14.50%, and the rest is in the hands of small shareholders.
The main technical figures relating to Triple A Barranquilla’s integral water cycle management in 2016 are as follows:
SUPPLY
Number of inflow points managed 4
Annual contributions of the Magdalena River in 2016 (millions of cubic metres) 151,717 Water rerouted for consumption in catchments (millions of cubic metres) 230.27 Kilometres of network (conveyance + distribution) (km) 3,435 Number of drinking water treatment plants 4 Daily treatment capacity (millions of cubic metres) 0.72
SANITATION
Kilometres of managed municipal sewerage networks 2,051
Kilometres of network of managed large collectors and outfalls 240 Number of Wastewater Treatment Plants managed 8 Nominal treatment capacity (millions of equivalent inhabitants) 0.688 Water treated in WWTPs (millions of cubic metres) 32.62
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 483,676
Population supplied (inhabitants) 2,216,818 Supply coverage (% inhabitants) 98.04 Number of municipalities supplied 15 Population served in sewerage management (inhabitants) 1,891,297 Sewerage management coverage (% inhabitants) 83.64 Number of municipalities managed in sewerage 10 Population served in wastewater treatment (inhabitants) 630,103 Coverage in wastewater treatment (% inhabitants) 27.87 Number of municipalities managed in wastewater treatment 8
For more information about Triple A, visit: http://www.aaa.com.co
236 2016 Annual Report Canal de Isabel II
Metroagua (Santa Marta, Magdalena Department, Colombia)
Metroagua S.A. E.S.P., is the company in charge of water supply and sewerage management for the District of Santa Marta, in Colombia, through a lease agreement. The company’s legal status is that of a private public utility company. The Canal de Isabel II business group holds a 29.13% stake in Metroagua. The remainder of the shares are held by the Santa Marta District government, other local companies and small private shareholders.
The company offers services for the management and design of supply and sanitation projects, preparation of specifications and technical, administrative and financial monitoring of works. In 2016, the company supplied a population of 523,016 inhabitants, its main technical figures being as follows:
SUPPLY
Number of river inflow catchments managed 3
Capacity of managed inflow catchments (millions of cubic metres) 0.164 Water rerouted for consumption in reservoirs. Wells and/or catchments (millions of cubic metres) 39.43 Number of managed catchment wells in operation 48 Kilometres of network (conveyance + distribution) 939 Number of drinking water treatment plants 2 Daily treatment capacity (millions of cubic metres) 0.108 No. of small deposits 19 Storage capacity of large deposits (millions of cubic metres) 0.024
SANITATION
Kilometres of managed municipal sewerage networks 692
Kilometres of large collector and outfall networks (km) 81 Number of wastewater pumping stations 15 Nominal discharge capacity of the submarine outfall in cubic metres per second 2.50
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 99,243
Population supplied (inhabitants) 486,405 Supply coverage (% inhabitants) 93 Number of municipalities supplied 1 Population served in sewerage management (inhabitants) 431,488 Sewerage management coverage (% inhabitants) 82.50 Number of municipalities managed in sewerage 1
The lease agreement between the District of Santa Marta and Metroagua S. A. ESP expired on 17 April 2017.
237 APPENDIX III
ASAA (Riohacha, La Guajira Department, Colombia)
Avanzadas Soluciones de Acueducto y Alcantarillado - ASAA S.A. E.S.P., is the company responsible for water supply and sewerage management in the Colombian city of Riohacha, capital of the Department of La Guajira.
At the end of 2016, the company supplied a total of 193,829 inhabitants. Canal holds 32.50% of its shares, the Riohacha District holds 20% and the rest belongs to other small shareholders. The company’s main figures at the end of 2016 were as follows:
SUPPLY
Number of river catchment inflow points managed 1
Water rerouted for consumption in river catchments in 2016 (millions of cubic metres) 18.20 Kilometres of network (conveyance + distribution) 427 Number of drinking water treatment plants 1 Daily treatment capacity (millions of cubic metres) 0.048 Number of small deposits 3 Storage capacity of smaller deposits (millions of cubic metres) 0.012
SANITATION
Large collectors and outfalls managed (km) 10
Kilometres of municipal sewerage networks managed (km) 214
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 32,110
Population supplied (inhabitants) 193,829 Supply coverage (% inhabitants over total area supplied) 88.50 Number of municipalities supplied 1 Population served in sewerage management (inhabitants) 161,196 Sewerage management coverage (% inhabitants out of the total area supplied) 73.60 Number of municipalities managed in sewerage 1
For more information about ASAA, visit: http://www.asaa.com.co
238 2016 Annual Report Canal de Isabel II
Amagua (Samborondón/Daule, Guayas Province, Ecuador)
The Canal de Isabel II business group is one of the main shareholders (57%) in Aguas de Samborondón, Amagua Compañía de Economía Mixta which provides drinking water distribution services, sewerage management, wastewater treatment and reuse of regenerated wastewater in the urban development area of Cantón Samborondón and in the parishes of La Puntilla and Aurora, in the cantons of Samborondón and Daule, towns located very close to Guayaquil (Ecuador).
The Municipality of Samborondón holds a 30% stake in the company.
In 2016, Amagua supplied 174,869 inhabitants of both municipalities. Its main technical figures at the end of the fiscal year were as follows:
SUPPLY
Agua el alta bought in 2016 from the Guayaquil supply company (millions of cubic metres) 14.67 Kilometres of network (conveyance + distribution) 417
SANITATION
Kilometres of managed municipal sewerage networks 320 Kilometres of network of managed large collectors and outfalls 99 Number of Wastewater Treatment Plants managed 85 Nominal treatment capacity (millions of equivalent inhabitants) 0.20 Water treated at WWTPs in 2016 (millions of cubic metres) 14.05
REUSE
Number of reuse plants managed 17 Volume of water regenerated in 2016 (millions of cubic metres) 4.40
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 43,709 Population supplied (inhabitants) 174,869 Supply coverage (% inhabitants) 93 Number of municipalities supplied 2 Population served in sewerage management (inhabitants) 138,896 Sewerage management coverage (% inhabitants) 73.89 Number of municipalities managed in sewerage 2 Population served in wastewater treatment (inhabitants) 138,896 Coverage in wastewater treatment (% inhabitants) 73.89 Number of municipalities managed in wastewater treatment 2
For more information about the activities of Amagua – Aguas de Samborondón, visit: http://www.amagua.com
239 APPENDIX III
Fontes da Serra (Township of Guapimirim, State of Rio de Janeiro, Brazil)
Fontes da Serra Saneamento de Guapimirim Ltda. is fully owned by the company Emissão Engenharia e Construções S.A. Canal holds 67.97% of Emissão’s shares and the rest is owned by private individuals.
Fontes da Serra is responsible for supplying the town of Guapimirim in Brazil, and by the end of 2016 it had 10,318 customers and served a population of 34,648 inhabitants. The company’s main figures at the end of 2016 were as follows:
SUPPLY
Number of river catchment inflow points managed 1
Water rerouted for consumption in catchments in 2016 (millions of cubic metres) 3.73 Kilometres of network managed (conveyance + distribution) 77.6 Number of drinking water treatment plants 1 Daily treatment capacity (millions of cubic metres) 0.010 Number of small deposits 3 Storage capacity of smaller deposits (millions of cubic metres) 1.627
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 10,318
Population supplied (inhabitants) 34,648 Supply coverage (% inhabitants) 65.10 Number of municipalities supplied 1
240 2016 Annual Report Canal de Isabel II
Aguas de Tumbes (Township of Tumbes)
Aguas de Tumbes is the concession holder for water supply and sanitation services in the provinces of Tumbes, Zarumilla and Contraalmirante Villar (Peru). Canal holds a 69.05% stake in Aguas de Tumbes.
In 2016, Aguas de Tumbes supplied 188,612 inhabitants. Its main technical figures were as follows:
SUPPLY
Number of inflow points managed 16
Capacity of managed inflow catchments (millions of cubic metres) 19.76 Water rerouted for consumption in catchments (millions of cubic metres) 19.76 Kilometres of network (conveyance + distribution) (km) 575.87 Number of drinking water treatment plants 3 Daily treatment capacity (millions of cubic metres) 0.054
SANITATION
Kilometres of managed municipal sewerage networks 361.67
Kilometres of network of managed large collectors and outfalls 2.86 Number of Wastewater Treatment Plants managed 13 Nominal treatment capacity (thousand equivalent inhabitants) 0.12 Water treated in WWTPs (millions of cubic metres) 9.14
CUSTOMERS AND POPULATION SERVED
Number of supply contracts with customers 46,003
Population supplied (inhabitants) 188,612 Supply coverage (% inhabitants) 82.56 Number of municipalities supplied 14 Population served in sewerage management (inhabitants) 112,106 Sewerage management coverage (% inhabitants) 49.07 Number of municipalities managed in sewerage 13 Population served in wastewater treatment (inhabitants) 76,075 Coverage in wastewater treatment (% inhabitants) 33.30 Number of municipalities managed in wastewater treatment 13
241 APPENDIX III
II. Companies dedicated to water management support services
Hispanagua (Autonomous Community of Madrid, Spain)
Hispanagua, S.A.U. is a company created in 1995 through the partial spin-off of Hidráulica Santillana. Its main purpose is the construction, maintenance and operation of infrastructures related to water management.
The company is wholly owned by Canal de Isabel II, of which, according to the legislation governing public sector contracts in Spain, it is deemed an instrumental resource. Hispanagua does virtually all its business for Canal de Isabel II in Spain.
Hispanagua S.A.U.’s activity consists of providing services and carrying out works related to supply and sanitation networks (network repairs, connections, inspections, technical assistance, etc.) and the operation of its facilities, such as sewage treatment plants, drinking water treatment plants or pumping stations.
Hispanagua has long experience and is valued and appreciated by other companies in the sector. It manages its own personnel flexibly to meet the needs of the different orders signed with the parent company and of competitive pricing within the sector. Moreover, it is part of a stable and consolidated business group that has been involved in the water business for many years, which manages the integral water cycle, giving support to all its companies in the necessary matters (technical, financial, support, etc.).
242 2016 Annual Report Canal de Isabel II
Inassa (Colombia)
Sociedad Interamericana de Aguas y Servicios S.A. (hereinafter Inassa) was established in 1996 as a company providing services related to the integral water cycle in Colombia and other Latin American countries. It was acquired by Canal de Isabel II in 2001.
The Canal de Isabel II business group controls its stake in Inassa through Canal Extensia, with 81.24% of its shares. Sociedad de Aguas Latinas owns 18.76% of the company and small shareholders make up the rest of its ownership.
Inassa’s activity includes consulting, technical assistance, project management, provision of services and/or activities inherent to the integral water cycle and basic sanitation, the design of technological and commercial services and processes that complement each other, improve and lead to excellence in the management of the integral water cycle.
Based in Colombia, Inassa is also the operational parent company of Grupo Canal in Latin America and has extensive experience in the activities inherent to the integral water cycle. Either directly or through subsidiaries, it carries out these activities in Latin America where, thanks to its long-standing experience, it has achieved successes in water management by offering different alternatives and raising the level of technical knowledge.
As the operational head of Grupo Canal in Latin America, Inassa has a website providing details of all our activities.
This link contains all the Group’s information in Latin America: http://www.grupolnassa.com
243 APPENDIX III
AMERIKA (Colombia)
Grupo Canal holds a 81.54% stake in AMERIKA T.I. (Amerika Tecnologías de la Información).
Since 2014, AMERIKA has been offering the software AMERIKA, an information system that supports an integral solution for public utilities in the sector of drinking water, sewerage and sanitation. The AMERIKA software includes complementary services to keep it up to date in each of the client companies. The services provided by AMERIKA TECNOLOGÍAS DE LA INFORMACIÓN S.A.S. with respect to the AMERIKA software include:
• AMERIKA as SaaS (Software as a Service), • support, • management and development of requirements, • incident management, • consulting, • software implementation, • training.
AMERIKA TI’s business model and participation in the water cycle is horizontal through the INASSA Group companies where AMERIKA software is implemented, collaborating in achieving their objectives. Therefore, the measurement of the Company’s results refers not only to economic aspects, but is also oriented towards complying with quality indicators in the provision of services and/or products.
For more information about the activities of AMERIKA TI, visit: http://www.amerikati.co
244 2016 Annual Report Canal de Isabel II
R&T, S.A. (Colombia)
Grupo Canal owns an 80.46% stake in R&T.
Currently, R&T’s activities include:
• metre reading, billing and collection management services; • installation and replacement of water metres; • installation of connections, civil works to replace drinking water metres in the connections of subscribers and/or users of domestic utilities; • repair and maintenance of public service networks, repair of domestic leaks, installation, replacement, inspection and troubleshooting of utility metres, and civil works; • courier services.
245 APPENDIX III
AAA Dominicana (Dominican Republic)
AAA Dominicana S.A. began its operation in the Dominican Republic with the contract for commercial management and installation of metres in the western part of the city of Santo Domingo, signed with Corporación de Acueducto y Alcantarillado de Santo Domingo (CAASD) to serve a population of almost 1.5 million inhabitants. The Canal de Isabel II business group holds 52.81% of the company’s shares.
Currently, AAA Dominicana’s clients include the country’s public institutions, such as the utility companies that provide public water and sewerage services (CAASD, Coraapplata, Coraavega) and the City Council of Santo Domingo (ADN).
AAA Dominicana’s business model involves the implementation of the commercial management of the services provided by each of its clients. This commercial management includes the following aspects:
• Value proposal to the customer: AAA Dominicana involves all the management in a quality system that begins with the collection and updating of basic, cadastral and commercial data of the service’s users, allowing daily commercial updates that result in total coverage in billing of the service provided. • Customer service: as the main focus of management, it is used by AAA Dominicana to maintain direct contact with service customers.
246 2016 Annual Report Canal de Isabel II
Inassa Panamá (Panama)
Inassa Panamá is a delegation of the Colombian company Inassa. The company provides advisory and operational services for the commercial and technical management of companies in the domestic utilities sector.
Inassa Panamá currently manages the customer portfolio of the Instituto de Acueductos y Alcantarillados Nacionales (National Aqueduct and Sewerage Institute) in much of the Republic of Panama. It is also in charge of taking readings and distributing bills for IAAN.
For more information about the activities of Inassa in Panama, visit: http://www.inassa.com.pa
247 APPENDIX III
Inassa Ecuador (Ecuador)
Inassa Ecuador, a delegation of the Colombian company Inassa, provides consulting services in the execution of engineering projects and the inspection of works, as well as activities inherent to the integral water cycle: technical assistance to infrastructure works, design, project supervision and environmental consulting.
248 2016 Annual Report Canal de Isabel II
Emissão Engenharia e Construções (Rio de Janeiro and other Brazilian States)
The Brazilian company Emissão Engenharia e Construções, S.A. is headquartered in Rio de Janeiro, Brazil. Canal holds a 67.97% stake in Emissão and the rest is held by local shareholders. At the end of 2016, the main activities of the company and its subsidiaries were as follows:
• Execution of hydraulic infrastructure works. • Waste management and decontamination activities. • Computerised reading of water metres, with simultaneous delivery of bills.
The company’s clients are government agencies such as municipal councils, the State Government and water and sewerage companies.
In addition to these activities, Emissão through its subsidiary Fontes de Serra is in charge of managing the supply to the city of Guapimirim in Brazil, which had 10,318 customers and served a population of 34,648 inhabitants at the end of 2016.
For more information about the company and its services, visit: http://www.emissao.com.br
249 APPENDIX III
II. Companies engaged in activities that are in synergy with integrated water cycle management services
Hidráulica Santillana (HS) (Hydroelectric Production, Autonomous Community of Madrid, Spain)
Hidráulica Santillana S.A. (hereinafter HS) was acquired in 1965 by Canal de Isabel II. The company split in 1995, separating the activities related to the integral cycle (for which Hispanagua was created) from those of energy production, which is the main activity of HS at present. The company is wholly owned by the Canal de Isabel II business group.
HS’s activity involves the generation of hydroelectric power by operating eight plants that take advantage of the waterfalls in Canal de Isabel II reservoirs in the Autonomous Community. Of the eight plants, seven are owned by Canal and one by HS. The main technical figures for HS at the end of 2016 were as follows:
INSTALLATION AND PRODUCTION OF HYDROELECTRIC POWER
Number of hydroelectric power plants managed by Hidráulica Santillana 8
Installed power in hydropower plants (MW) 34.85 Total hydroelectric production in 2016 (millions of kWh) 97.06
250 2016 Annual Report Canal de Isabel II
Canal de Comunicaciones Unidas – CCU (Telecommunications and information technology, Autonomous Community of Madrid, Spain)
Canal de Comunicaciones Unidas, S.A. Sociedad Unipersonal (hereinafter CCU), wholly owned by the Canal de Isabel II business group, is engaged in the information technology and telecommunications sector. CCU’s activities include the following:
• Integral technical manager of the TETRA Digital Trunking System in the Community of Madrid, which includes the provision of maintenance services for TETRA Infrastructures and the unified supervision of the telecommunications systems of Canal de Isabel II, S. A. • Site management, consultancy and infrastructure maintenance in the area of Automation and Remote Control of Processes of Canal de Isabel II, S.A. (maintenance of more than 1,500 sites). • Development of information systems and M2M in the field of telecommunications services.
CCU’s main client is Canal de Isabel II. In addition, it has other customers from the Group (Hispanagua) as well as third parties (Dragados, FCC, etc.) to which it provides fleet location and management services using GPS technology.
The main technical figures for CCU at the end of 2016 were as follows:
COMMUNICATIONS
Number of stations in the digital mobile radio (trunking) network 107
Number of digital trunking terminals 5,597 Number of customers to whom communication services are provided 114 Number of GPS trackers in the fleet management service 975 Coverage of telecommunications systems managed in square kilometres 10,606
For more information about CCU and its services, visit: http://www.canalcom.com
251 APPENDIX III
Triple A Barranquilla (Solid waste management and urban cleaning, Barranquilla and Atlántico Department, Colombia)
In addition to the management of the integral water cycle, Sociedad de Acueducto, Alcantarillado y Aseo S.A. E.S.P. - Triple A provides all the services related to solid urban waste management and urban cleaning in Barranquilla since 1993 and in 5 municipalities in the Department of Atlántico in 2016.
The Los Pocitos Environmental Park landfill is one of Triple A’s most important achievements, in terms of the final disposal of rubbish from Barranquilla and its metropolitan area. It was built in 2009 respecting the regulations in force in Colombia and taking into account the latest technologies and engineering standards to minimise environmental impacts. The main figures for Triple A in cleaning activities in 2016 are as follows:
ACTIVITY INDICATORS AND PARAMETERS OF THE CLEANING SERVICE PROVIDED BY TRIPLE A IN BARRANQUILLA (COLOMBIA)
Number of municipalities served in solid waste collection 6
Number of municipalities served in street cleaning 4 Number of inhabitants served in solid waste collection 1,754,677 Number of inhabitants served by street cleaning services 1.397134 Coverage of cleaning services (in percentage of population) 100% Number of kilometres of street cleaning 888,263 Quantity of hazardous waste collected, managed and treated (tonnes) 3,408 Total number of landfills managed 1 Managed landfill capacity (cubic metres) 16,226,358 Amount of household waste collected (tonnes) 610,854 Quantity of waste dumped in landfills (tonnes) 678,938 Waste collection routes 191 High-volume customers (number) 3,225 Amount of leachate treated (cubic metres) 75,617
For more information about the activities of Triple A Barranquilla, visit: http://www.aaa.com.co
252 2016 Annual Report Canal de Isabel II
Other companies in which Grupo Canal has a stake
Canal Extensia, S.A.U. is the holder of the shares of all the Group’s Latin American companies.
Based in Uruguay, Soluciones Andinas de Agua was formed to hold 75% of the shares held by the Canal Group in Emissão Engenharia e Construções.
AAA Ecuador, located in Ecuador, holds 70% of the shares of Amagua.
GSS Venture, S.L. is a company in which Canal de Isabel II holds a minority (25%) stake. Its corporate purpose is the provision of telemarketing and customer services, developed through the telephone network or any other telematic means. GSS is currently the company in charge of the call centre providing customer service for Canal de Isabel II customers in Spain.
Other companies and consortia with discontinued activities liquidated at the end of 2016:
WATCO Dominicana, Inassa Costa Rica, RyT Resultado y Tecnología (Panama), RyT Panamá, RyT Dominicana, AAA del ITSMO (Panama)
Inassa-Cleop (Panama) and Inassa-Incasur-Metroagua (Dominican Republic).
Companies and consortia with discontinued activities in liquidation at the end of 2016:
GIS (Colombia), Caracol (Haiti), Jacmel (Haiti), Ouanaminthe (Haiti), Inforesa (Dominican Republic), Inamex (Mexico), Mexaqua (Mexico) and AAA Venezuela.
Company with discontinued activities: Canal Energía (Spain).
253 APPENDICES
APPENDIX I APPENDIX II APPENDIX III
APPENDIX IV AUDITOR'S REPORT ON THE CONTENTS OF CANAL DE ISABEL II'S 2016 ANNUAL REPORT
APPENDIX V 2016 Annual Report Canal de Isabel II
255 APPENDIX IV
256 2016 Annual Report Canal de Isabel II
257 APPENDICES
APPENDIX I APPENDIX II APPENDIX III APPENDIX IV
APPENDIX V GRI G4 TABLES OF CONTENTS 2016 Annual Report Canal de Isabel II
GRI G4 TABLE OF CONTENTS
GRI G4 GENERAL BASIC CONTENTS
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
STRATEGY AND ANALYSIS
Provide a statement from the most senior decision-maker of the organisation Messages from (such as CEO, chair, or equivalent the Chairman G4-1 senior position) about the relevance of of the Board of 11 -13 sustainability to the organisation and the Directors and from organisation’s strategy for addressing the CEO sustainability.
2. Our Provide a description of key impacts, risks, G4-2 environment and 34-37 and opportunities. future challenges
ORGANISATIONAL PROFILE
15 (Canal de G4-3 Name of the organisation. 1. Our company Isabel II, Sociedad Anónima)
The primary brands, products, and G4-4 1.2. Our activity 18-24 services of the organisation.
Report the location of the organisation’s G4-5 Cover 1 (Madrid, Spain) headquarters.
Report the number of countries where the organisation operates, and names of countries where either the organisation G4-6 5. Grupo Canal 133-135 has significant operations or that are specifically relevant to the sustainability topics covered in the report.
Report the nature of ownership and legal 1.3. Organisation G4-7 25 form. of our company
Report the markets served (including G4-8 geographic breakdown, sectors served, 5. Grupo Canal 133-135 and types of customers and beneficiaries).
1. Our company, 1.1. Main Report the scale of the organisation, figures in the including: total number of employees, Autonomous G4-9 total number of operations, net sales or Community of 15-17 and 135-141 net revenues, and quantity of products or Madrid, 5.1. Grupo services provided. Canal: activities and geographical location
259 APPENDIX V
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
1. Number of employees by employment contract and sex.
2. Number of permanent employees by employment type and sex.
3. Total workforce by employees, supervised workers and by sex. 4.8. Canal’s professionals: 105-106, 141-142, There were no significant 4. Total workforce by region and sex. empowering G4-10 Appendix 1 and changes in number of our people, 5.4 Appendix 2 employees in 2016 5. Report whether a substantial portion Group companies’ of the organisation’s work is performed workforce, by workers who are legally recognised as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors.
6. Report any significant variations in employment numbers.
4.8. Canal’s Report the percentage of total employees professionals: G4-11 covered by collective bargaining 110 empowering our agreements. people
4.10.3. With our G4-12 Describe the organisation’s supply chain. 129-131 suppliers
Not Report any significant changes during applicable, Canal and its Group There have the reporting period regarding the there have contract according to G4-13 been no organisation’s size, structure, ownership, been no public sector contract changes or its supply chain. significant regulations changes
PARTICIPATION IN EXTERNAL INITIATIVES
4.4.1. Environmental Report whether and how the management at G4-14 precautionary approach or principle is Canal de Isabel II, 62-63, 94-96 addressed by the organisation. 4.7.2. Corporate Governance at Canal de Isabel II,
2.2. Global Context List externally developed economic, in which our environmental and social charters, sector currently G4-15 principles, or other initiatives to which 31-32, 103 operates, the organisation subscribes or which it 4.7.3 Social endorses. commitment
List memberships of associations and national or international advocacy organisations in which the organisation:
1. Holds a position on the governance 3.3. Our Does not exist body; Stakeholders
3.3. Our 2. Participates in projects or committees; 40-41 In AEAS G4-16 Stakeholders
3. Provides substantive funding beyond 3.3. Our Does not exist routine membership dues; Stakeholders
3.3. Our Stakeholders, AEAS, IWA, United Nations 4. Views membership as strategic. 40-41, 103 4.7.3. Social Global Compact commitment
260 2016 Annual Report Canal de Isabel II
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
MATERIAL ASPECTS AND COVERAGE
1. List all entities included in the 5. Grupo Canal, 136-141, 153-154 organisation’s consolidated financial About this report, and 231-243 statements or equivalent documents. Appendix 3
G4-17 Group companies that 2. Report whether any entity included in were inactive, in the the organisation’s consolidated financial process of being dissolved 155 statements or equivalent documents is or dissolved during 2016 not covered by the report. are not included in the document
1. Explain the process for defining the report content and the aspect boundaries. G4-18 About this report 150 2. Explain how the organisation has implemented the Reporting Principles for defining report content.
List all the material aspects identified in G4-19 About this report 153 the process for defining report content.
For each material aspect, report the G4-20 About this report 150 aspect boundary within the organisation.
For each material aspect, report the G4-21 About this report 150 aspect boundary outside the organisation.
Report the effects of any restatements of The report focused mainly G4-22 information provided in previous reports, About this report 149 on Canal’s activities in the and the reasons for such restatements. Autonomous Community of Madrid, given the company’s decision to Report significant changes from previous divest itself of companies G4-23 reporting periods in the scope and aspect About this report 149 outside its geographical boundaries. scope.
STAKEHOLDER PARTICIPATION
Provide a list of stakeholder groups 3.3. Our G4-24 40 engaged by the organisation. Stakeholders
Report the basis for identification and 3.3. Our G4-25 selection of stakeholders with whom to 40 Stakeholders engage.
Report the organisation’s approach to stakeholder engagement, including 3. Our Mission and frequency of engagement by type and Commitments, G4-26 by stakeholder group, and an indication 3.3. Our 40, 150 of whether any of the engagement was Stakeholders, undertaken specifically as part of the About this report report preparation process.
Report key topics and concerns that have been raised through stakeholder engagement, and how the organisation 2.4. Our main G4-27 has responded to those key topics and future challenges, 34-37, 150, 152 concerns, including through its reporting. About this report Report the stakeholder groups that raised each of the key topics and concerns.
261 APPENDIX V
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
REPORT PROFILE
Reporting period (such as fiscal or G4-28 About this report 149-150 calendar year) for information provided.
G4-29 Date of most recent previous report (if any). 2015
G4-30 Reporting cycle (such as annual, biennial). Annual
Provide the contact point for questions G4-31 About this report 149-150 regarding the report or its contents.
GRI INDEX
1. Report the ‘in accordance’ option the About this report 254 organisation has chosen.
2. Report the GRI Content Index for the Appendix 5: GRI chosen option. Tables of Contents G4-32 Appendix 4: 3. Report the reference to the External Auditor’s Report Assurance Report, if the report has been on the contents of externally assured. the 2016 Annual Report
VERIFICATION
1. Report the organisation’s policy and current practice with regard to seeking external assurance for the report.
2. If not included in the assurance report accompanying the sustainability report, 149 report the scope and basis of any external assurance provided. G4-33 About this report 3. Report the relationship between the organisation and the assurance providers.
The Statutory Auditor is 4. Report whether the highest governance elected by the Company’s body or senior executives are involved in Not Shareholders’ Meeting seeking assurance for the organisation’s applicable as proposed by the Audit sustainability report. Committee
GOVERNANCE
Report the governance structure of the Decisions regarding organisation, including committees of economic, social and the highest governance body. Identify 1.3. Organisation G4-34 25-27 environmental issues are any committees responsible for decision- of our company approved by the Board of making on economic, environmental and Directors social impacts.
Report the process for delegating See Annual Corporate authority for economic, environmental 1.3. Organisation Governance Report on G4-35 and social topics from the highest 27 of our company Canal’s and the CNMV’s governance body to senior executives and websites other employees.
Report whether the organisation has appointed an executive-level position or See Annual Corporate positions with responsibility for economic, 1.3. Organisation Governance Report on G4-36 27 environmental and social topics, and of our company Canal’s and the CNMV’s whether post holders report directly to the websites highest governance body.
262 2016 Annual Report Canal de Isabel II
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
Report processes for consultation between stakeholders and the highest governance 1.3. Organisation body on economic, environmental and of our company, G4-37 27, 40-41 social topics. If consultation is delegated, 3.3.Our describe to whom and any feedback Stakeholders processes to the highest governance body.
Report the composition of the highest 1.3. Organisation G4-38 25-26 governance body and its committees. of our company
Report whether the Chair of the highest The chairman has some governance body is also an executive 1.3. Organisation executive functions The G4-39 officer (and, if so, his or her function 25 of our company CEO is a proprietary within the organisation’s management director and the reasons for this arrangement).
Report the nomination and selection See Annual Corporate processes for the highest governance 1.3. Organisation Governance Report on G4-40 body and its committees, and the criteria 26 of our company Canal’s and the CNMV’s used for nominating and selecting highest websites governance body members.
1.3. Organisation Report processes for the highest of our company 26 (Board See Annual Corporate governance body to ensure conflicts of 4.7.1 Relations Committees), Governance Report on G4-41 interest are avoided and managed. Report with Public 91-93, 94 Canal’s and the CNMV’s whether conflicts of interest are disclosed Administrations (“Operation Lezo”) websites to stakeholders. and Management Transparency.
ROLE OF THE HIGHEST GOVERNANCE BODY IN ESTABLISHING THE ORGANISATION’S PURPOSES, VALUES AND STRATEGY
Report the highest governance body’s and senior executives’ roles in the development, approval, and updating 1.3. Organisation G4-42 of the organisation’s purpose, value of our company, 27, 150 or mission statements, strategies, About this report policies, and goals related to economic, environmental and social impacts.
ASSESSMENT OF THE COMPETENCIES AND PERFORMANCE OF THE HIGHEST GOVERNANCE BODY
Report the measures taken to develop and enhance the highest governance 1.3. Organisation G4-43 27 (indicators) body’s collective knowledge of economic, of our company environmental and social topics.
1. Report the processes for evaluation of the highest governance body’s performance with respect to governance of economic, environmental and social 1.3. Organisation 27 (indicators) topics. Report whether such evaluation of our company is independent or not, and its frequency. Report whether such evaluation is a self-assessment. G4-44 2. Report actions taken in response to evaluation of the highest governance 4. Areas of action: body’s performance with respect to 45, 150-151 (new our performance governance of economic, environmental Strategic Plan in 2016, About and social topics, including, as a drafting process) this report minimum, changes in membership and organisational practice.
263 APPENDIX V
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
RISK MANAGEMENT FUNCTIONS OF THE HIGHEST GOVERNANCE BODY
1. Report the highest governance body’s role in the identification and management of economic, environmental and social 4.7.2. Corporate impacts, risks, and opportunities. Include 105-106, 108-109 Governance the highest governance body’s role in the implementation of due diligence processes. G4-45 2. Report whether stakeholder consultation is used to support the 150 (process and highest governance body’s identification About this report approval of the and management of economic, new Strategic Plan) environmental and social impacts, risks, and opportunities.
Report the highest governance body’s role in reviewing the effectiveness of 4.7.2. Corporate G4-46 the organisation’s risk management 97-98 Governance processes for economic, environmental and social topics.
Report the frequency of the highest The Board of Directors and governance body’s review of economic, 1.3. Organisation its committees generally G4-47 25 environmental and social impacts, risks, of our company hold a meeting every and opportunities. month
HIGHEST GOVERNANCE BODY’S ROLE IN DRAFTING THE SUSTAINABILITY REPORT
The material aspects were Report the highest committee or position defined and approved by CEO and that formally reviews and approves the the highest governance Management G4-48 organisation’s sustainability report and and management bodies Committee ensures that all material aspects are during the drafting members covered. process of the new 2018- 2030 Strategic Plan
HIGHEST GOVERNANCE BODY’S ROLE IN EVALUATING ECONOMIC, ENVIRONMENTAL AND SOCIAL PERFORMANCE
Report the process for communicating 1.3. Organisation G4-49 critical concerns to the highest 27 of our company governance body.
The most important Report the nature and total number of 4. Areas of action: aspects have been those critical concerns that were communicated 45, 150-151 (new The exact our performance They are not included in the strategic G4-50 to the highest governance body and Strategic Plan number is in 2016, About quantified lines in the process of describe the mechanism(s) used to drafting process) unknown this report preparing the new 2018- address and resolve them. 2030 Strategic Plan.
REMUNERATION AND INCENTIVES
1. Report the remuneration policies for the highest governance body and senior executives.
4.7.2. Corporate G4-51 96-97 2. Report how performance criteria in the Governance remuneration policy relate to the highest governance body’s and senior executives’ economic, environmental and social objectives.
264 2016 Annual Report Canal de Isabel II
Reason Explanation of Page in the Omissions Chapter for the the omission and report identified omission observations
No consultants are used. Report the process for determining The remuneration is set remuneration. Report whether by the Department of remuneration consultants are involved in Economy and Finance determining remuneration and whether 4.7.2. Corporate of the Autonomous G4-52 96-97 they are independent of management. Governance Community of Madrid and Report any other relationships which the the increases are approved remuneration consultants have with the with the General Budgets organisation. of the Autonomous Community.
The remuneration Report how stakeholders’ views are is regulated by the sought and taken into account regarding Not No such Department of Economy G4-53 remuneration, including the results applicable enquiries are and Finance of the of votes on remuneration policies and to Canal made Autonomous Community proposals, if applicable. of Madrid
Report the ratio of the annual total compensation for the organisation’s highest-paid individual in each country 4.7.2. Corporate G4-54 of significant operations to the median 96-97 Governance annual total compensation for all employees (excluding the highest-paid individual) in the same country.
Report the ratio of percentage increase in annual total compensation for the organisation’s highest-paid individual in each country of significant operations to 4.7.2. Corporate G4-55 96-97 the median percentage increase in annual Governance total compensation for all employees (excluding the highest-paid individual) in the same country.
ETHICS AND INTEGRITY
Describe the organisation’s values, principles, standards and norms of 4.7.2. Corporate G4-56 95, 98 behaviour such as codes of conduct and Governance codes of ethics.
Report the internal and external 4.7.1. Relations mechanisms for seeking advice on ethical with Public G4-57 and lawful behaviour, and matters Administrations 91-93 related to organisational integrity, such as and management helplines or advice lines. transparency
Report the internal and external mechanisms for reporting concerns about unethical or unlawful behaviour, 4.7.2. Corporate G4-58 and matters related to organisational 96 Governance integrity, such as escalation through line management, whistleblowing mechanisms or hotlines.
265 APPENDIX V
GRI G4 SPECIFIC BASIC CONTENTS
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
ECONOMIC DIMENSION
ECONOMIC PERFORMANCE
4.10. Sustainability Efficient use and efficient G4 - WFD 120 of economic Internal management: a resources profitable company
Efficient use of economic 4.10.1 Our economic Direct economic resources performance, 5.5. 120-125, G4-EC1 value generated and Internal Consolidated Group 143-147 distributed Alignment of economic results debt to strategy
The consequences Financial 4.1. Guaranteed Adapting to Internal are expressed implications and supply: water for climate change in terms of They other risks and everybody, every greater energy have not G4-EC2 opportunities for 46, 70-74 day, 4.4.3. Energy Promoting Mixed consumption been the organisation’s efficiency and climate the circular (internal and in the event measured activities due to change economy external) of drought. climate change Not quantified economically.
The company’s contributions to the pension fund are suspended Coverage of the 4.8. Canal’s by virtue of organisation’s professionals: G4-EC3 111 the provisions defined benefit plan empowering our of the General obligations people Budgets of the Autonomous Community of Madrid.
Financial assistance See also note 17 4.10.1 Our economic G4-EC4 received from 124 to the Financial performance government Statements
MARKET PRESENCE
Commitment and sense of belonging of 4.8. Canal’s the workforce professionals: G4 - WFD 105 Internal empowering our Promotion of people managerial activities of professionals
Ratios of standard entry level wage by Commitment gender compared and sense of G4-EC5 to local minimum Appendix 1 198 Internal belonging of wage at significant the workforce locations of operation
Proportion of senior
management Promotion of hired from the G4-EC6 Appendix 1 194 managerial Internal local community at activities of significant locations professionals of operation
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
INDIRECT ECONOMIC CONSEQUENCES
4.10.2. We invest in Efficient use G4 - WFD the Autonomous 126 of economic Internal Community of Madrid resources
Development and impact of 4.10.2. We invest in Efficient use infrastructure G4-EC7 the Autonomous 126-128 of economic Internal investments and Community of Madrid resources services supported
Collaboration 4.10.2. We invest Significant indirect and in the Autonomous economic impacts, 126, revitalisation G4-EC8 Community of External including their 103-104 of the Madrid, 4.7.3. Social extent municipalities commitment of Sierra Norte
PROCUREMENT PRACTICES
Greater 4.10.3. With our efficiency G4 - WFD 129 Internal suppliers in internal processes
Canal contracts Proportion of under public Greater The exact spending on Total percentage sector contract 4.10.3. With our efficiency figure G4-EC9 local suppliers at 129 Internal of expense on law and therefore suppliers in internal is not significant locations local suppliers cannot prioritise processes available of operation the local nature of suppliers.
ENVIRONMENTAL DIMENSION
MATERIALS
4.4.2. Our Promoting Mixed G4 - WFD environmental 64 the circular (internal and performance economy external)
Data on reagents and paper are 4.4.2. Our Promoting Mixed provided as Materials used by G4-EN1 environmental 64-65 the circular (internal and they are the weight or volume performance economy external) most significant consumption items.
Extent of 4.1. Guaranteed regenerated Percentage of supply: water for water Mixed materials used that everybody, every 50 (reuse consumption G4-EN2 (internal and are recycled input day, 4.4.2. Our plan), 65 external) materials environmental Promoting performance the circular economy
ENERGY
4.4.2. Our Promoting Mixed G4 - WFD environmental 65 the circular (internal and performance economy external)
Energy consumption 4.4.2. Our Promoting Mixed G4-EN3 within the environmental 65-66 the circular (internal and organisation performance economy external)
267 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
Energy consumption Information Not considered G4-EN4 outside of the Not available not available significant organisation
4.4.2. Our Promoting Mixed Energy intensity G4-EN5 environmental 65-66 the circular (internal and (by activity) performance economy external)
4.4.3. Energy Promoting Mixed Reduction of energy G4-EN6 efficiency and climate 72, 74 the circular (internal and consumption change economy external)
Reductions in energy 4.4.3. Energy Promoting Mixed requirements G4-EN7 efficiency and climate 72-75 the circular (internal and of products and change economy external) services
WATER
Maximum efficiency in the use of existing Internal 4.1. Guaranteed resources
G4 - WFD supply: water for 46
everybody, every day External Effective management of demand
Maximum efficiency in the use of existing 1.2.1. Supply: Internal Total water 19-20, resources adduction, 4.4.2. G4-EN8 withdrawal by 66-67 (water Our environmental source consumption) performance External Effective management of demand
Maximum efficiency in the use of existing Water sources Internal resources significantly affected G4-EN9 Appendix 1 157-158 by withdrawal of
water External Effective management of demand
Expansion Percentage and 4.1. Guaranteed of the Mixed total volume of 50 (reuse G4-EN10 supply: water for consumption (internal and water recycled and plan), everybody, every day of regenerated external) reused water
BIODIVERSITY
Stakeholder 4.4.4. Managing support for G4 - WFD 74 External biodiversity sustainable initiatives
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
Operational sites owned, leased, managed in, or adjacent to, protected 4.4.4. Managing G4-EN11 74-75 areas and areas of biodiversity high biodiversity value outside protected areas.
Description of significant impacts of activities, products, and services on biodiversity in 4.4.4. Managing G4-EN12 74-75 protected areas biodiversity and areas of high biodiversity value outside protected areas
Habitats protected 4.4.4. Managing G4-EN13 75 or restored biodiversity
Total number of IUCN Red List species and national conservation list 4.4.4. Managing G4-EN14 75 species with habitats biodiversity in areas affected by operations, by level of extinction risk
EMISSIONS
Adapting to Internal climate change 4.4.3. Energy
G4 - WFD efficiency and climate 70 Promoting Mixed change the circular (internal and economy external)
4.4.3. Energy Direct greenhouse Adapting to G4-EN15 efficiency and climate 70-71, 186 Internal gas (GHG) emissions climate change change, Appendix 1
Energy indirect 4.4.3. Energy Adapting to G4-EN16 greenhouse gas efficiency and climate 70-71, 186 Internal climate change (GHG) emissions change, Appendix 1
Other indirect 4.4.3. Energy Adapting to G4-EN17 greenhouse gas efficiency and climate 70-71, 186 Internal climate change (GHG) emissions change, Appendix 1
Greenhouse gas 4.4.3. Energy Adapting to G4-EN18 (GHG) emissions efficiency and climate 70-71, 186 Internal climate change intensity change, Appendix 1
Reduction of 4.4.3. Energy Adapting to G4-EN19 greenhouse gas efficiency and climate 70-71, 186 Internal climate change (GHG) emissions change, Appendix 1
Emissions of Canal does not Not G4-EN20 ozone-depleting Not applicable release such applicable substances (ODS) substances
Adapting to NOx, SOx, and other 4.4.2. Our climate change G4-EN21 significant air environmental 67 Internal (reduction of emissions performance outbreaks)
269 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
EFFLUENTS AND WASTE
Efficiency in wastewater Internal treatment 4.4. Environmental
quality and energy Excellence in G4 - WFD efficiency: we 60 Internal sewerage take care of your
environment Promoting External the circular economy
Total water 4.4.2. Our Efficiency in G4-EN22 discharge by quality environmental 67-69 wastewater Internal and destination performance treatment
Promoting Total weight of 4.4.2. Our the circular G4-EN23 waste by type and environmental 69-70 External economy disposal method performance (waste)
Total number and 4.4.2. Our G4-EN24 volume of significant environmental 69 spills performance
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention 4.4.2. Our Promoting (2) Appendix I, II, III, environmental 70, the circular G4-EN25 External and VIII Encourage performance, 184-185 economy informed decisions: Appendix 1 (waste) clear/transparent language and financial literacy, and percentage of waste transported internationally.
Identity, size, protected status, and biodiversity Efficiency in value of water wastewater 1.2.4. Sanitation: bodies and related treatment G4-EN26 wastewater 22, 191 Internal habitats significantly treatment, Appendix 1. affected by the Excellence in organisation’s sewerage discharges of water and runoff.
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
PRODUCTS AND SERVICES
Improved quality of water at source
New treatment 4.2. Guaranteeing G4 - WFD 54 technologies Internal quality: the best
Improved operating processes and network maintenance
Extent of impact mitigation of 4.4.1. Environmental G4-EN27 environmental management at Canal 61-63 impacts of products de Isabel II and services
Percentage of products sold and Expansion their packaging 4.1. Guaranteed of the Mixed 50 (reuse G4-EN28 materials that are supply: water for consumption (internal and plan), reclaimed at the end everybody, every day of regenerated external) of their useful life by water product category
REGULATORY COMPLIANCE
Efficiency in 4.4. Environmental wastewater quality and energy treatment G4 - WFD efficiency: we 60 Internal
take care of your Excellence in environment sewerage
Monetary value of significant fines and total number 4.4.2. Our of non-monetary G4-EN29 environmental 70 sanctions for performance non-compliance with environmental laws and regulations
TRANSPORT
4.4. Environmental quality and energy G4 - WFD efficiency: we 60 take care of your environment
Significant environmental The most impacts of significant transporting impact is the products and 4.4.2. Our Adaptation to transport of other goods and environmental 67, 183, climate change G4-EN30 Internal waste, WWTP materials for the performance, 186 (reduction of sludge and organisation’s Appendix 1 outbreaks) DWTP mud, operations, and as well as the transporting vehicle fleet. members of the workforce
271 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
ENVIRONMENTAL INVESTMENT AND EXPENDITURE
4.4. Environmental quality and energy G4 - WFD efficiency: we 60 take care of your environment
Total environmental 4.4.1. Environmental protection G4-EN31 management at Canal 64 expenditures and de Isabel II investments by type
ENVIRONMENTAL ASSESSMENT OF SUPPLIERS
4.4. Environmental quality and energy G4 - WFD efficiency: we 60 take care of your environment
Environmental protection clauses are Percentage of new included in all Greater suppliers that were No contracts, but 4.10-3. With our efficiency G4-EN32 screened using 129 Internal Not available assessments no assessments suppliers in internal environmental are made are carried processes criteria out. However, supplier performance is monitored
Significant actual and potential negative Not G4-EN33 environmental Not available assessed impacts in the supply chain and actions taken
ENVIRONMENTAL GRIEVANCE MECHANISMS
4.4. Environmental quality and energy G4 - WFD efficiency: we 60 take care of your environment
Number of grievances about 4.4.1. Environmental environmental management at Canal Maximum impacts filed, G4-EN34 de Isabel II, 4.4.2. 63, 70 transparency in External addressed, and Our environmental management resolved through performance formal grievance mechanisms
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
SOCIAL DIMENSION
LABOUR PRACTICES AND DECENT WORK
EMPLOYMENT
4.8. Canal’s Workforce professionals: G4 - WFD 105 adapted to Internal empowering our evolving needs people
Total number 4.8. Canal’s and rates of new professionals: 105- Workforce employee hires and empowering our G4-LA1 106,142, adapted to Internal employee turnover people, 5.4. Group 195 evolving needs by age group, sex company workforces, and region Appendix 1
Benefits provided to full-time There are no employees that 4.8. Canal’s Commitment differences since are not provided to professionals: and sense of the company G4-LA2 111 Internal temporary or part- empowering our belonging of collective time employees, by people the workforce agreement was significant locations approved of operation
Return to work and 4.8. Canal’s Commitment retention rates after professionals: 109-110, and sense of G4-LA3 Internal parental leave, by empowering our 196 belonging of sex people, Appendix 1 the workforce
EMPLOYEE-MANAGEMENT RELATIONS
4.8. Canal’s Commitment professionals: and sense of G4 - WFD 105 Internal empowering our belonging of people the workforce
No minimum notice period has been established Minimum notice Organisational periods regarding Commitment changes are operational Not and sense of analysed on a G4-LA4 changes, including Internal Not available formally belonging of case-by-case whether these are established the workforce basis, so that the specified in collective negative impacts agreements they may have on employees can be avoided or mitigated.
OCCUPATIONAL HEALTH AND SAFETY
4.8. Canal’s professionals: Employee G4 - WFD 105 Internal empowering our safety people
273 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
Percentage of total workforce represented in formal joint management- worker health and Employee G4-LA5 Appendix 1 199 Internal safety committees safety that help monitor and advise on occupational health and safety programmes
Type of injury and rates of injury, occupational 4.8. Canal’s diseases, lost days, professionals: 108-109, Employee G4-LA6 and absenteeism, empowering our Internal 199 safety and total number people, of work-related Appendix 1 fatalities, by region and by sex
Workers with a high 4.8. Canal’s incidence or high professionals: Employee G4-LA7 risk of diseases empowering our 109, 199 Internal safety related to their people, occupation Appendix 1
The collective agreement explicitly includes the 4.8. Canal’s Health and safety representation professionals: topics covered in 108-109, Employee of employees G4-LA8 empowering our Internal formal agreements 199 safety in all matters people with trade unions related to Appendix 1 occupational health and safety in the company
TRAINING AND EDUCATION
Workforce adapted to 4.8. Canal’s evolving needs professionals: G4 - WFD 107 Internal empowering our Promotion of people managerial activities of professionals
Average hours of 4.8. Canal’s training per year per professionals: Workforce 107, G4-LA9 employee by sex, empowering our adapted to Internal 196-197 and by employee people, evolving needs category Appendix 1
Programmes for skills management and lifelong learning that support 4.8. Canal’s Promotion of the continued professionals: managerial G4-LA10 107 Internal employability of empowering our activities of employees and people professionals assist them in managing career endings
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
Percentage of employees 100% of receiving regular Commitment 4.7.2. Corporate employees in performance and and sense of G4-LA11 governance in Canal 96-97 Internal all categories career development belonging by de Isabel II receive this type reviews, by sex the workforce of review and by employee category
DIVERSITY AND EQUAL OPPORTUNITY
4.8. Canal’s Commitment professionals: and sense of G4 - WFD 109 Internal empowering our belonging by people the workforce
Composition of governance bodies and breakdown 4.8. Canal’s of employees per Commitment professionals: 105-106, employee category and sense of G4-LA12 empowering our 109, Internal according to sex, belonging of people 193-195 age group, minority the workforce Appendix 1 group membership, and other indicators of diversity
Ratio of basic salary and remuneration 4.8. Canal’s Commitment of women to men by professionals: and sense of G4-LA13 employee category, empowering our 109, 198 Internal belonging of by significant people the workforce locations of Appendix 1 operation
ASSESSMENT OF SUPPLIERS’ LABOUR PRACTICES
There are mechanisms in place to coordinate No occupational G4 - WFD Not available assessments health with are made subcontractors. The contract specifications set out conditions in this respect.
All contracts include clauses relating to labour Percentage of new Greater practices, but suppliers that were No 4.10.3. With our efficiency no evaluations G4-LA14 screened using 129 Internal Not available assessments suppliers in internal are performed. labour practices are made processes However, criteria supplier performance is monitored
Significant actual and potential negative impacts for 4.10-3. With our Not G4-LA15 Not available labour practices in suppliers assessed the supply chain and actions taken
275 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
GRIEVANCE MECHANISMS WITH RESPECT TO LABOUR PRACTICES
4.8. Canal’s professionals: Commitment empowering our and sense of G4 - WFD 96, 110 Internal people, 4.7.2. belonging of Corporate governance the workforce in Canal de Isabel II
Workers’ Number of 4.8. Canal’s grievances grievances about professionals: Commitment are raised by labour practices empowering our and sense of Number not Information their union G4-LA16 filed, addressed, and 96, 110 Internal people, 4.7.2. belonging of available not available representatives resolved through Corporate governance the workforce through formal grievance in Canal de Isabel II various joint mechanisms committees.
HUMAN RIGHTS
Maximum 4.7. Transparency, transparency in governance and social management G4 - WFD commitment: the 91, 103 External company of all the people of Madrid Commitment to society
INVESTMENT
Total number All contracts and percentage include clauses of significant relating to the investment employment Greater agreements and and social 4.10.3. With our efficiency G4-HR1 contracts that 129 Internal practices of suppliers in internal include human subcontractors. processes rights clauses or No investment that underwent agreements human rights were concluded screening in 2016.
Total hours of employee training on human rights policies or procedures Good G4-HR2 concerning aspects Appendix 1 197 Corporate Internal of human rights Governance that are relevant to operations, including the percentage of employees trained
NON-DISCRIMINATION
Total number of incidents of Good None G4-HR3 discrimination and Corporate Internal have corrective actions Governance occurred taken
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
Operations and suppliers identified in which the right to exercise freedom 4.7. Transparency, Commitment Spanish laws do of association and governance and social and sense of None not allow such G4-HR4 collective bargaining commitment: the 95 Internal Not applicable belonging of exist circumstances to may be violated or company of all the the workforce occur at significant risk, people of Madrid and measures taken to support these rights
CHILD LABOUR
Operations and suppliers identified as having significant 4.7. Transparency, risk for incidents of governance and social Spanish law Commitment to G4-HR5 child labour, and commitment: the 95 External does not permit society measures taken to company of all the such practices contribute to the people of Madrid effective abolition of child labour
FORCED LABOUR
Operations and suppliers identified as having significant risk for incidents 4.7. Transparency, of forced or governance and social Spanish law Commitment to G4-HR6 compulsory labour, commitment: the 95 External does not permit society and measures to company of all the such practices contribute to the people of Madrid elimination of all forms of forced or compulsory labour
SECURITY MEASURES
Percentage of security personnel All security trained in the team members organisation’s Not are trained G4-HR7 human rights Not material material in relation to policies or fundamental procedures that rights are relevant to operations
INDIGENOUS PEOPLES’ RIGHTS
There are no indigenous Total number peoples of incidents of in the violations involving G4-HR8 Not applicable geographical rights of indigenous area where peoples and actions Canal and taken its Group operate
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Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
REVIEW AND ASSESSMENT
Total number and percentage of operations that Not G4-HR9 have been subject Not available performed to human rights reviews or impact assessments
ASSESSMENT OF SUPPLIERS ON HUMAN RIGHTS ISSUES
All contracts include clauses relating Percentage of to labour Greater new suppliers that No practices, but 4.10.3. With our efficiency G4-HR10 were screened 129 Internal Not available assessments no evaluations suppliers in internal using human rights are made are performed. processes criteria However, supplier performance is monitored
Significant actual and potential negative human 4.10-3. With our Not G4-HR11 Not available rights impacts in the suppliers assessed supply chain and actions taken
HUMAN RIGHTS GRIEVANCE MECHANISMS
Number of grievances about human rights These types of impacts filed, Information G4-HR12 Not available reviews are not addressed, and not available conducted resolved through formal grievance mechanisms
SOCIETY
4.7. Transparency, Maximum governance and social transparency in commitment: management G4 - WFD 91, 99 External
the company of all the Commitment to people of Madrid society
LOCAL COMMUNITIES
Percentage of Support for operations with sustainable implemented initiatives of 4.4.1. Environmental local community stakeholders G4-SO1 management at Canal 63 External engagement, de Isabel II impact assessments, Maximum and development transparency in programmes management
278 2016 Annual Report Canal de Isabel II
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
Collaboration Operations with 4.6. Commitment to and significant actual or users: at your side, revitalisation G4-SO2 potential negative 88-90 External for anything you may of the impacts on local need municipalities communities of Sierra Norte
FIGHT AGAINST CORRUPTION
Total number and percentage of 4.7.1. Relations with operations assessed 91-93, 94 Good Public Administrations G4-SO3 for risks related (“Operation Corporate Internal and management to corruption and Lezo”) Governance transparency the significant risks identified
Communication and training on 4.7.2 Corporate Good G4-SO4 anti-corruption Governance at Canal 94-96 Corporate Internal policies and de Isabel II Governance procedures
4.7.1. Relations with Confirmed incidents 94 Good Public Administrations G4-SO5 of corruption and (“Operation Corporate Internal and Management actions taken Lezo”) Governance Transparency
PUBLIC POLICY
Total value of political None No contributions G4-SO6 contributions Not applicable exist are made by country and recipient/beneficiary
UNFAIR COMPETITION PRACTICES
Total number of legal actions for None anti-competitive have G4-SO7 behaviour, Not applicable taken anti-trust, and place monopoly practices and their outcomes
REGULATORY COMPLIANCE
Monetary value of significant fines and total number 4.4.2. Our Efficiency in G4-SO8 of non-monetary environmental 70 wastewater Internal sanctions for performance treatment non-compliance with laws and regulations
279 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
ASSESSMENT OF THE SOCIAL IMPACT OF SUPPLIERS
All contracts include clauses relating Percentage of new to labour Greater suppliers that were No practices, but 4.10-3. With our efficiency G4-SO9 screened using 129 Internal Not available assessments no evaluations suppliers in internal criteria for impacts are made are performed. processes on society However, supplier performance is monitored
Significant actual and potential negative impacts on 4.10-3. With our Not G4-SO10 Not available society in the supply suppliers assessed chain and actions taken
GRIEVANCE MECHANISMS RELATING TO SOCIAL IMPACTS
Number of grievances about 4.6. Commitment to impacts on society Customer users: at your side, G4-SO11 filed, addressed, and 88-90 experience External for anything you may resolved through culture need formal grievance mechanisms
RESPONSIBILITY FOR PRODUCTS
CUSTOMER HEALTH AND SAFETY
Improved quality of water at source
New treatment 4.2. Guaranteeing technologies G4 - WFD 54 Internal quality: the best water Improved operating processes and network maintenance
Improved quality of water Percentage of at source significant product and service New treatment categories for 4.2. Guaranteeing technologies G4-PR1 54-56 Internal which health and quality: the best water safety impacts Improved are assessed for operating improvement processes and network maintenance
280 2016 Annual Report Canal de Isabel II
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
Total number of incidents of non-compliance with regulations and voluntary codes 4.6.1. Relationship Customer G4-PR2 concerning the with our customers 96-99 experience External health and safety and users culture impacts of products and services during their life cycle, by type of outcomes
LABELLING OF PRODUCTS AND SERVICES
4.6. At your side, for Customer G4 - WFD anything you may 90 experience External need culture
Type of product and service information required by the organisation’s procedures for product and service 4.6.1. Relationship Improved Mixed information and G4-PR3 with our customers 95-97 commercial (internal and labelling, and and users processes external) percentage of significant products and service categories subject to such information requirements
Total number of incidents of non-compliance with regulations None Customer and voluntary have G4-PR4 experience External Not applicable codes concerning taken culture product and service place information and labelling, by type of outcomes
4.6. Commitment to Results of surveys Customer users: at your side, G4-PR5 measuring customer 88-90 experience External for anything you may satisfaction culture need
MARKETING COMMUNICATIONS
Improved quality of water at source
New treatment technologies 4.2. Guaranteeing G4 - WFD 54 Internal quality: the best water
Improved operating processes and network maintenance
281 APPENDIX V
Explanation Material Coverage Reason Page in Omissions of the Chapter aspects of material for the the report identified omission and identified aspects omission observations
New treatment technologies None Sale of banned or 4.2. Guaranteeing Improved have G4-PR6 56 Internal disputed products quality: the best water operating taken processes place and network maintenance
Total number of incidents of non-compliance with regulations and voluntary None codes concerning have G4-PR7 marketing Not applicable taken communications, place including advertising, promotion, and sponsorship, by type of outcomes
CUSTOMER PRIVACY
4.3. Service continuity: Information G4 - WFD 64 Internal a reliable service security
Total number of substantiated None complaints 4.3.2. Data protection Information have regarding breaches relating to customers 59 Internal Not applicable G4-PR8 security taken of customer privacy and suppliers place and losses of customer data
REGULATORY COMPLIANCE
Monetary value of significant fines for non-compliance with None laws and regulations have G4-PR9 Not applicable concerning the taken provision and use place of products and services
282 www.canaldeisabelsegunda.es/es/