Annual Report 2010 - AdP

The unemployment rate closed the year at around 11%, one percentage point higher than in 2009, placing Portugal as one of the
European Union member states with the highest unemployment rates, behind Spain, Slovakia and Ireland.
Contrary to the trend experienced in 2009, in which the PSI 20 index of the Portuguese stock market recorded a gain in excess of
30%, 2010 saw a 10% slide in value while some of shares listed recorded falls in excess of 50%.
This impact was nevertheless offset by the good performances turned in by the companies Jerónimo Martins, Portucel and Galp,
without which the annual loss would have been in the region of 20%.
3. Sectorial Environment
Throughout this last year, work continued on achieving the targets set by the strategic national plans established for the water supply
and wastewater treatment sector in the Strategic Plans for Water Supply and Wastewater Sanitation (PEAASAR II 2007-2013),
approved by Ministerial Order published in Diário da República, 2nd Series, 14 February 2007, and Portugal's National Strategy for
Agricultural and Agro-Industrial (ENEAPAI), approved by Joint Ministerial Order no. 8277/2007, of 2 March, published in Diário da
República on 9 May 2007 – and in the field of waste treatment and recovery – the Strategic Plan for Municipal Solid Waste (PERSU
II) for the 2007-2013 period, approved by Dispatch no. 187/2007, of 12 February.
These strategic operational programs, providing the guiding framework for AdP Group activities, derive from the overall QREN –
National Strategic Reference Program 2007-2013, the instrument for defining the application of European Union economic and
social cohesion policies in Portugal.
Within the framework defined by PEAASAR II and PERSU II, in accordance with the need to render greater flexibility to the
management models in effect and fostering new forms of relationships with municipalities, Decree Law no. 90/2009, of 9 April was
enacted in 2009 and introduced a new management model for water and wastewater treatment services based upon partnerships
between the state and local authorities, a model that has since been adopted in two situations – in the centre and south of the
country – over the course of the fourth quarter of 2009.
This period saw a trend towards growth in activities within the scope of the multi-municipal tendered water supply and wastewater
treatment and waste management sectors.
At the end of 2009, and with the objective of strengthening the measures and instruments able to attain effectiveness in the regulation
of public water and wastewater services, Decree Law no. 277/2009, of 2 October was passed and approving the organic structure
of the Water and Waste Service Regulatory Body (ERSAR, I.P.), formerly IRAR, I.P.. The Regulator was correspondingly attributed a
greater mission in the general regulation of the sector as well as greater scope for intervention and sanctions.
The approval of the Stability and Growth Program 2010-2013, through Resolution no. 29/2010, of 12 April, by the national parliament
and the subsequent Dispatch no. 510/10, of 1 June, set annual limits on levels of indebtedness for state owned companies for the
2010 to 2013 period.
Given the ongoing investment programme and the commitments already taken on by companies through to the date of this law
and also in order to avoid jeopardising European funding, the Secretary of State for the Treasury and Financing subsequently issued
Dispatch no. 896/10, of 26 August, annulling, on an exceptional basis, the application to Águas de Portugal of the cap set for the year
of 2010 and determining, as regards the financial years 2011 to 2013, the presentation of Activity and Investment Plans by the AdP,
Águas de Portugal Board of Directors, reviewed and detailed as regards the respective financing and an obligatory requirement
within the scope of the European regulatory framework in effect for the funding limits set out in the Stability and Growth Program.
Stability and Growth Program also provided material expression to a set of important measure contained in the document “Strategic
Orientations for 2011 for the State Owned Business Sector” in October, in particular, significant cuts based upon a 15% global
reduction in costs, more specifically in costs incurred with human resources and third party supplies and services.
The process of identifying the cuts feasible and the reduction of costs, without impacting on the quality of services rendered, required
a significant level of consideration and analysis prior to the consequences coming into effect as from the beginning of 2011.
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