Risk associated with the legal status of properties used by the Group results from the fact that the Group does not have a legal title to use land for all of its facilities where its transmission grids and the associated equipment are located. In the future, the Group might be obligated to incur the costs of non-contractual use of property.
Rulings in these cases are significant because they have a considerable impact on the Group’s approach to people raising pre-trial claims concerning equipment located on their properties in the past as well as the way in which the legal status of such equipment is addressed in the case of new investments.
The loss of assets in this case is highly unlikely. Having an unclear legal status for properties where power equipment is located does not constitute a risk for the Group of losing such assets, rather it gives rise to the threat of additional costs related to demands for compensation for the non-contractual use of land, rent, costs related to transmission easements and, exceptionally, in individual cases, demands related to a change in the object’s location (return of land to original condition). The Group recognises adequate provisions.
The provision also applies to compensation for the non-contractual use by the Group of properties on which the Group’s grid assets (power lines) are located, in connection with transmission corridors or transmission easements being established for the Group.
As at 31 December 2021, the Group recognised a provision for claims concerning non-contractual use of land amounting to PLN 213 578 thousand.