Regulatory and socio-political risks

Regulatory and socio-political risks, particularly in Airports and Toll Roads and Car Parks activity

  • Risks of regulatory framework changes that could have a negative effect on forecast revenue or on profit margins, mainly in the airport business.

    The British airports subsidiary (BAA) maintains permanent relations with the regulatory authorities (Regulation Steering Group), with a view to being ahead of possible regulatory changes.

  • Risk of buy-back of the concession without payment of compensation (linked to the so-called "country risk").

  • Social movements against transport infrastructure construction or expansion, besides movements organized by interest groups favouring the suppression of toll-road charges or any others linked with concession contracts.

Regarding action taken by these interest groups, the corporate and business division Managements are in permanent contact with them in order to meet their expectations and anticipate any possible impact on the company.

In relation to other socio-political risks, Ferrovial's investment focuses mainly on OECD countries since their political, social and economic conditions and legal certainty are considered to be stable and sound. In this context, the risk that the government will denationalize the concessions is sufficiently hedged by the clauses that guarantee indemnity and compensation to concession holders.

In any case, the Financial and Legal departments perform constant follow-up of the evolution of these socio-political and regulatory risks.