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Barcelona Water Privatization Deal Faces Legal Action on Appeal

Jan. 3 (Bloomberg) -- Acciona SA and Brazilian partner BTG Pactual said they are preparing legal action after the Catalan regional government accepted an appeal against a 1 billion-euro ($1.3 billion) contract to privatize Barcelona’s water supply.

The companies, which made a first payment of 299 million euros to regional authorities on Dec. 27, have officially managed Barcelona’s water since Jan. 1. They’re seeking a full refund should the water contract be annulled as Acciona in a regulatory filing said all conditions of the bid have been met.

The Barcelona-based water utility Sociedad General de Aguas de Barcelona SA has challenged the contract, with the appeal accepted yesterday by the regional government, according to the filing. Catalan President Artur Mas was sworn in for a second term last month after negotiating a deal with the Catalan Republican Left known as ERC, which favors independence for Spain’s biggest regional economy and opposes asset disposals such as Barcelona’s water.

Acciona is an Alcobendas, Spain-based renewable energy provider whose water unit Acciona Agua operates from Africa to Latin America, including desalination plants in Australia.

ERC leader Oriol Junqueras in November’s regional election doubled his number of seats as Mas’s support slipped. The leaders have agreed to prepare Catalonia for a referendum on independence in 2014. Prime Minister Mariano Rajoy says a secession vote is illegal and moves would be taken to stop it.

A spokesman for the Department of Territory and Sustainability didn’t respond to phone calls requesting comment today on the government’s position.

To contact the reporters on this story: Patricia Laya in Madrid at playa2@bloomberg.net; Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: Charles Penty at cpenty@bloomberg.net

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