Since 1983 the activity of desalination of sea water in the Canary Islands has been subsidized, in order to be able to cover the final price of drinking water and to try to approximate it to the average price of water in the peninsula. As of 1997, the control and distribution of these grants became the responsibility of the Ministry of the Environment, which meant a simplification and objectification of the process. The current objective of the Ministry of the Environment is directed not only to guarantee the sufficiency of water resources but the quality, the rational use of water, as well as an incentive of the most efficient systems, particularly from the point of energy view. In order to achieve these objectives, new valuation criteria have been incorporated. The full entry into force of the Law, 38/2003 of 17 November, General of Grants, requires an important adaptation of the procedure, especially with regard to the regulation of the calls and the systems of justification and control. On the basis of the principles of advertising, transparency, competition, objectivity, equality and non-discrimination, the Law provides that the regulatory bases for grants will be approved by Ministerial Order and will be published in the "Official State Gazette", and determines its essential content. On the other hand, Law No 30/1992 of 26 November 1992 on the Legal Regime of Public Administrations and the Common Administrative Procedure and the Regulation on the granting of public subsidies, approved by Royal Decree 2225/1993 of 17 December 1993, December, they determine the essential requirements to ensure the impartiality of the concession procedure and the exercise of the rights of the administered. It is therefore necessary to issue an Order laying down the criteria for distribution and the procedure for granting the said subsidies to the activity of desalination of sea water in the Canary Islands. For all the above, this Ministry has had to dispose:

Article 1. Object.

purpose of this Order is to establish the conditions under which the water purification of the sea, in the desalinable plants of the Canary Islands, will be eligible.

Article 2. Temporary scope.

This Order will be in effect until June 30, 2008.

Article 3. Beneficiaries.

The local authorities or public undertakings or concessionaires which, in the Canary Islands, fulfil the following conditions at the same time, may benefit from the subsidies provided for in this Order: (a) water supply or the holding of water.

b) Verter water, obtained through a process of desalination of sea water, to the public distribution network for domestic consumption.

Qualifying entities and companies may not be involved in any of the circumstances provided for in Article 13 of Law 38/2004 of 17 November. General of Grants, and must comply with the obligations laid down in Article 14 of the Law.

Article 4. Applications.

The interested parties will fill in a copy of the application in the model to be published as an annex to the call resolutions and submit it, within the time limit set out in them, in any of the places provided for in the Article 38.4 of Law 30/1992, of 26 November, of the Legal Regime of Public Administrations and of the Common Administrative Procedure.

The call resolutions shall indicate, in addition, the documentation to be accompanied by the application, in particular that which allows the costs incurred by the applicants to be credited in the reference period set.

Article 5. Concession procedures.

1. The granting of aid shall be made by means of the competition procedure, in accordance with the principles of advertising, transparency, objectivity, equality and non-discrimination.

2. The decisions of the convocation shall establish the procedure for hearing the proposals for granting and, where appropriate, the arrangements for acceptance by the parties concerned. 3. The competent authority for the instruction of the procedure is the Directorate General of Water. 4. Applications shall be evaluated by a Technical Commission, heard by the competent authority of the Government of the Canary Islands. 5. The Commission shall be chaired by the Director-General of Water, with its members: the Director-General for Industry and Energy of the Government of the Canary Islands, the Deputy Director-General for Economic Programming and Secretary, with a voice and vote, the Head of the Studies and Programs, both of the Directorate General of Water. 6. The Commission shall examine the admissible applications and, after applying the scales set out in the call, draw up a proposal for a concession, including those which it considers should be financed and the amount proposed for each of them. 7. The system of operation of this Commission shall be in accordance with the rules on collective bodies contained in Law 30/1992 of 26 November 1992 on the Legal Regime of Public Administrations and the Common Administrative Procedure. 8. The proposals of the Technical Commission do not create any right in favour of the applicant. 9. It shall be for the Minister of the Environment or the management body to whom he has delegated, the decision to grant or refuse applications, in the light of the proposal of the Technical Commission and, where appropriate, of the arguments put forward. 10. The decision taken, which shall terminate the administrative procedure, shall be notified in writing to each applicant within the maximum period of two months after the end of the period for the submission of applications, without prejudice to its publication in the Bulletin State Officer. After the expiry of that period without having been notified, the parties concerned shall be entitled to understand their requests.

Article 6. Amount of the grants.

The grant to be received by each beneficiary shall be that obtained by applying the following formula: SubL = (AL + BL+ CL + IL) × k

:
SubL	=	Is the grant in euros.
K	=	It is the value that results from dividing the budgetary availability in the financial year, expressed in euro, between the sum AL + BL + CL + IL for all grant recipients
AL	=	This is the result of the following mathematical operations:

AL = Vd L × 0,35 Subt/Vat dL

being:

Vd L	=	Volume of water desalted in cubic meters, in the time interval to set the call.
Subt	=	Budget Availability in Exercise corresponding, expressed in euros.
BL	=	This is the result of the following mathematical operations:

BL = Vd L × 0,25 × Subt × [1-(Pr-Ps t)/Pr]/vat dL

being:

V dL	=	Volume of water desalted in cubic meters, in the time interval to set the call.
P st	=	Standard losses in the distribution network, expressed	P r
P r	=	Actual losses in the network distribution, expressed as per one. These losses will be calculated using the following formula

Pr = (V dL + Vc-y-vat-Vf)/(V dL + Vc--cid-stock)

where:

Vc	=	It is the total volume of water in cubic meters that is poured into the public distribution network from sources other than the potabilizing plants for each beneficiary, in the time interval that it establishes. the call.
Δ Stock	=	Is the difference between the volume of water in cubic meters stored in the repositories of each beneficiary in the time interval that the call sets.
Vf	=	It is the volume of water expressed in cubic meters, billed by each beneficiary in the time interval to set the call.

When Pr = 0, it will be taken as the value of BL:

BL = Vd L × 0,25 × Subt/vat Vd dL CL = It is the result of the following mathematical operations: CL = Vd L × 0.20 × Subt × [1-(Cr-C st)/Cr] /CVD dL

being:

V dL	=	Volume of water desalted in cubic meters, in the time interval to set the call.
C st	=	Standard cost of energy expenditure per cubic meter of water desalted and will have the value of 0.45 €/m3.
		=	Actual cost of expenditure energy per cubic meter of desalted water, expressed in €/m3.
IL	=	of the following mathematical operations:

IL = Vd L × 0,20 × Subt × [1-(Go -Is t)/Go] /Veil V dL

being:

V dL	=	Volume of water desalted in cubic meters, in the time interval to set the call.
I st	=	Standard investment per cubic meter of desalted water and which will have the value of 0.02 €/m3.
Go	=	Actual investment, per cubic meter of water in environmental improvements expressed in €/m3. Investment in environmental improvements, exclusively investments made in the following concepts: -Amendments to use renewable energy instead of conventional energy. -Improvements in the discharge conditions of the brine, by reduction of the concentration of salts. -Improvements to reduce the environmental impact of the facilities. -Enhancements to reduce energy expense. -Enhancements to increase performance, that is, m3 of water desalted by m3 of treated water
When Ir= 0, zero will be taken as the value of IL.

Article 7. Compatibility of the grants.

The perception of the subsidies regulated in this Order will be compatible with the perception of others for the same purpose, coming from any public or private administrations or entities. This compatibility will be conditional on the amount of the grants awarded under no circumstances exceeding the cost of the activity to be developed by the beneficiary.

Article 8. Payment of the grants.

The call resolution will establish the period of activity covered by the grant. Since the objective of this Order is to subsidise the costs of an activity already carried out, the payment of the grants will be ordered with the signature of the concession resolution.

Article 9. Justification.

The beneficiary of the grant will be obliged to provide the checks aimed at ensuring the correct implementation of the subsidised action. It shall also be subject to financial control measures corresponding to the General Intervention of the General Administration of the State and those provided for in the legislation of the Court of Auditors.

Article 10. Default.

1. Any alteration of the conditions under consideration for the grant of the grants, as well as the concurrent obtaining of grants or aid granted by other public or private, national or international administrations or (a) a change in the granting decision may be made in the case of an earlier notified decision.

2. The grant shall be revoked, as well as the reimbursement of the amounts received and the requirement of interest for late payment from the time of payment of the grant, in the cases and in the terms provided for in Article 37 of Law 38/2003, of 17 November, General of Grants. 3. They shall have the consideration of infringements and shall be punishable by the conduct defined in Articles 56, 57 and 58 of Law 38/2003 of 17 November, General of Grants.

Article 11. Applicable rules.

This Order complies with the provisions of Law 38/2003 of November 17, General of Grants, Law 30/1992, of November 26, of the Legal Regime of Public Administrations and of Common Administrative Procedure, the Royal Decree 2225/1993 of 17 December 1993 approving the Regulation of the procedure for the granting of public subsidies, in so far as it does not contravene the General Law on Subsidies and other rules applicable to them.

Article 12. Powers of development.

The Secretary-General for Territory and Biodiversity is empowered to issue the resolutions necessary for the implementation of this Order, as well as to resolve the specific doubts that arise in relation to this Order.

Article 13. Entry into force.

This Order shall enter into force on the day following that of its publication in the Official Gazette of the State.

Madrid, 12 January 2006.

NARBONA RUIZ