23 Provisions for risks and charges

Provisions for risks and charges of €527 million (€629 million at 31 December 2010) are illustrated in the table below:

The provision for site dismantlement and restoration (€306 million) was recognised primarily due to expenses which are expected to be borne for the removal of natural gas storage facilities and for site restoration (€294 million). Changes in estimates (-€135 million) are due mainly to an adjustment of the timing of expenditure related to future storage site restoration charges, which increased the estimated time required for the extinguishment of the relevant obligations by 20 years (corresponding to the duration of any possible extensions). This calculation method is consistent with the remuneration of costs for tariff purposes by the Electricity and Gas Authority, pursuant to Resolution ARG/gas 119/10²⁶.

The provision for litigation (€77 million) included costs which the company has estimated it will incur for existing lawsuits.

The provision for environmental expense (€63 million) mainly included costs for environmental soil reclamation, which is required under Law No. 471/1999 (as amended), primarily for the disposal of solid waste, related to the distribution business.

Other provisions (€81 million) relate essentially to: (i) costs (€54 million) recorded to offset the item covering changes in inventories resulting from the difference between estimated quantities of Unaccounted-For Gas (UFG) which is to be recorded in 2012 and 2013, and the amounts to be paid in kind by users to cover the quantities of UFG for the same year; and (ii) costs for termination benefits (€4 million) for the planned termination of staff based on union agreements.