Hotel Investment Partners (HIP), the hotel investment group behind several properties in Ibiza, says its subsidiary responsible for the private water network in Port de Sant Miquel operates at a loss. The company maintains that the costs of maintaining the infrastructure and monitoring water quality exceed the income generated by supplying homes, tourist accommodation, businesses and hotels in the area.

The statement comes amid growing scrutiny of the private water supply in Port de Sant Miquel, in the municipality of Sant Joan de Labritja. A municipal legal report has questioned whether the existing water-use concessions authorise the network to supply the wider population, while the Town Hall has acknowledged that it cannot establish the exact tariffs currently charged to customers or the administrative basis on which they were approved.

In comments to La Voz de Ibiza, HIP confirmed that its subsidiary, Real Estate San Miguel Suministro de Aguas, S.L. (RESM), manages the private supply network through contractual arrangements with Port Esmeralda, S.L.

The company argues that it has continued providing water to the wider area because there is no operational municipal network capable of replacing the private infrastructure.

HIP Says the Water Supply Operation Generates Losses

HIP says supplying water to the wider Port de Sant Miquel area is not a commercial activity designed to generate profit for the group.

According to the company, RESM assumes the costs of maintaining the infrastructure and carrying out the necessary water-quality controls. HIP says these expenses exceed the income received, resulting in a negative operating result.

The company explained to La Voz de Ibiza that the private network has supplied not only its hotels but also homes, tourist accommodation and other businesses in Port de Sant Miquel for years.

However, HIP did not provide the publication with the number of subscribers connected to the network, the tariffs applied to customers, the operating expenses or the amount of the losses.

Consequently, the company's assertion that the operation is loss-making cannot currently be independently quantified using the figures made public.

RESM Operates the Network Through Agreements With Port Esmeralda

The company directly responsible for operating the water network is Real Estate San Miguel Suministro de Aguas, S.L. (RESM), a subsidiary of HIP.

The arrangement involves contractual agreements with Port Esmeralda, S.L., a company historically linked to the water infrastructure in the area.

HIP says RESM has contractual rights to use and operate the wells and infrastructure through its relationship with Port Esmeralda. Sant Joan Town Hall has also identified RESM as the current operator and confirmed the existence of contractual arrangements between the two companies.

The municipality has clarified that Port Esmeralda does not appear as the company directly providing the water service.

The corporate structure of RESM dates back to 2021, when Real Estate San Miguel, S.A.U. underwent a total division that created five new companies, including RESM Suministro de Aguas. The division was recorded in the Official Gazette of the Commercial Registry (BORME) in July 2021.

Why the Private Water Network Is Under Scrutiny

The financial explanation from HIP comes against the background of a separate legal and administrative dispute concerning the authorisation of the water supply.

According to a municipal legal report incorporated into Sant Joan Town Hall's administrative file, the existing water-use concessions cover the supply of two hotels and irrigation. They do not expressly include the general supply of water to other properties and businesses in Port de Sant Miquel.

The report therefore questions the legal basis for the private provision of water to the wider population.

This distinction is important. The wells are not described as having no authorisation at all. Rather, the concern is that the uses covered by the existing concessions do not correspond to the wider service currently being provided.

HIP maintains that the private network has continued serving the area because no municipal alternative is operational. The company also argues that the Directorate-General for Water Resources is responsible for determining the uses and volumes covered by water-use concessions, while the Town Hall is responsible for organising and providing the public domestic water supply.

The municipality has separately acknowledged that it cannot identify the precise tariff structure currently applied to subscribers or establish the administrative procedure through which those prices were approved and supervised.

What the Official Water Register Shows

Spain's National Information System on Drinking Water (SINAC), managed by the Ministry of Health, identifies RESM Suministro de Aguas as the manager of the Port de Sant Miquel network and the company issuing water bills.

The register lists 185 registered residents supplied by the network, representing 100% of the registered population assigned to it. This figure refers to the registered population and should not be interpreted as the total number of paying subscribers or all people who use the network, particularly during the tourist season.

SINAC also displays a comparative billing indicator of €2.50 per cubic metre. This does not establish the exact tariff charged to every customer, as the published information does not provide a complete breakdown of household and commercial prices, consumption bands, fixed charges and taxes.

The database's latest displayed control analysis, dated 15 September 2026, classifies the water as suitable for consumption. HIP also says that previously identified deficiencies in the water-storage facilities have been corrected and that the installations receive periodic maintenance.

These statements should be considered separately from the legal question over whether the existing water-use concessions cover the general supply being provided.

A New Public Water Network Is Planned

Sant Joan Town Hall is working towards replacing the current private supply with a municipal network that will use desalinated water, principally from the Balearic Water and Environmental Quality Agency (ABAQUA).

The council has decided against acquiring or incorporating the existing private infrastructure as a whole, following technical and legal concerns about its condition, documentation and ownership.

Instead, the municipality is developing new infrastructure, including a regulating reservoir in Sant Miquel and a pipeline intended to connect it to Port de Sant Miquel.

The reservoir construction contract has been awarded for approximately €1.41 million excluding VAT. The separate pipeline project, measuring approximately 4.95 kilometres, has a published budget of €695,397.64. The pipeline was still awaiting execution in the municipal project information reported in November 2026.

The transition will also require the municipality to establish the legal, financial and tariff arrangements for the future public service.

Until the new network becomes operational, RESM is expected to continue supplying the area under a transitional arrangement that the Town Hall has been working to formalise.

Financial Claims Remain Unquantified as the Public Network Is Developed

HIP's position is that RESM is maintaining an essential service in Port de Sant Miquel because there is currently no operational municipal alternative. The group says the costs of keeping the private network running exceed the revenue it generates and has committed to continuing the supply until the public system is available.

However, the financial claim remains unquantified. The company has not published the subscriber numbers, tariff schedule, operating costs or the amount of the reported losses.

At the same time, the municipality faces the task of resolving the legal and administrative questions surrounding the existing service while completing the infrastructure needed for a public supply.

For residents and businesses in Port de Sant Miquel, the central issue remains the continuity of water provision and the conditions under which the service is delivered. The eventual transition to a municipal network is intended to provide a long-term solution, but the private system continues to play an essential role in the area.