Note 18.- Provisions and Contingencies
18.1. Provisions for other liabilities and expenses

The following table shows the movement of the heading “Provisions for Other Liabilities and Expenses” between 2009 and 2008


The amounts belonging to “Other Movements” generally reflect the changes of the consolidation perimeter, the conversion differences and various reclassifications as well as the incorporation of the provisions for other liabilities and expenses for the Information Technologies business segment previously classified as non-current assets held for sale (see Note 14).

As at the end of 2009 the net operating profits includes an amount of € -16,377 M relating to a necessary provision to cover specific risks regarding business trends that are mainly outside of the Spanish territories, primarily relating to Industrial Engineering and Construction activities, mainly in Brazil. During the period provisions were utilised to the amount of € 46,613 M (which were provided for in prior period) as suggested by IAS 37 as their nature was considered to be a remote contingent liabilities or because the risk for which they were created has materialised.

18.2. Provisions and contingencies

As at the end of 2009 Abengoa and its Group of companies are involved in certain claims and litigations both against and in their favour. Such matters are a normal part of its business activities and the technical and economic claims represent those which parties of a given contract may typically invoke. The most significant of such claims is currently abroad, and relates to a contract to repower electrical power stations. For various reasons, at right time the contract has been claimed by the Group company as they adjudged it impossible to comply with the contract. This view arose due to the failure of the customer to obtain, in time and nature, the necessary administrative licences and permissions so as to be able to complete the project.

As a result, the Group company mentioned above has reclaimed certain substantial economic amounts. However, these amounts are not recognised in these Financial Statements or those of prior periods, due to their nature as contingent assets. The claims were made in 2003 by the Group company including concepts such as intangible losses and indirect damages far over and above the value of the original contract (of approximately 200 M dollars). The Directors of Abengoa hope that this litigation will resolve itself within a reasonable time frame and as such do not believe it to be necessary to recognise a liability in the financial accounts.

This view has been corroborated by the legal advisors to the Group, especially due to the damage limitation clauses included within the contract, which exclude indirect damage claims and a cap direct damages claims.