News and views from a week in the Algarve...
A series of good news reports for the Algarve last week as at last the government focuses its attention on regional issues.
A meeting last Friday in Portimão resulted in the signing of a deal handing over the responsibility for the region’s commercial ports to a new management body dominated by the Algarve’s mayors.
The current Sines-based management of the region’s ports has long been criticised due to its clear lack of interest in the Algarve, especially in Portimão’s dockside area which needs to be dredged and expanded to enable larger cruise ships to dock and set sail with safely. The business case for this investment was made at the start of the Passos Coelho government but the Sines ports authority has used delaying tactics to ensure the Algarve remains starved of investment.
The agreed new management structure releases the commercial docks and other waterside areas to the mayors’ control as, by the minister’s admission, the mayors know what needs to be done locally but have been hampered by layers of decision making at diverse government bodies.
Questions remain over the commercial docks at Faro where staff idly are standing by, waiting for a resumption of cement exports from Cimpor in Loulé. The mayor wants to turn the area into yet another marina and there is support for this quick fix but if the export business picks up, shipments of cement will have to be routed through Portimão.
Still, good news and the long battle to regain control over regional port management soon will be over.
Earlier in the week the Algarve woke to the news that the government is to cancel the onshore oil and gas exploration contracts with Sousa Cintra’s company, Portfuel.
The two exploration areas, named Aljezur and Tavira, should never have been signed away as Portfuel was a new company and hence did not fulfil the contract conditions. The then Environment Minister, Jorge Moreira da Silva, signed the contracts anyway and questions remain as to why.
Needless to say, local millionaire businessman Sousa Cintra has not reacted happily to the news that his concession contracts are to be shredded and bleats that he had been assure by very important people that everything was OK even though his company did not fulfil the contracts terms.
The mayors, associations and, I suspect, the vast majority of the public reacted with delight that the threat of onshore drilling and extraction has been erased.
The government also is to cancel the offshore contracts with the Repsol-Partex consortium that would have seen drilling off the Algarve’s southern coast, but there remains a degree of concern over the west coast concession area held by Galp-ENI whose management insists drilling will start next April off Aljezur.
The government has shown its awareness that an unruly and upset Algarve population will lose socialist seats across the region in next autumn’s council elections and, if left unchecked, will lose socialist MPs their seats come the next general election.
Whatever the reasoning in Lisbon, the cancellation of these contracts was positive and showed that the government is taking note of the many petitions, polls, demonstrations and of the press coverage that has been at pains to report that the Algarve’s population does not want to take on the risk presented by an oil industry, especially when there is no direct monetary compensation for the region.
Next, news came in that the Algarve’s ambulance service control centre is to be re-opened. The cost-cutting exercise in 2012 led to a poor service for the Algarve run from a centralised control centre in Lisbon.
Then came news that Polis Litoral Ria Formosa, the company that was meant to be developing and supporting artisan communities and infrastructure along the Ria Formosa lagoon area instead of demolishing as many properties as possible to make way for sand, has been told by the Environment Minister that from now on there will be more local involvement at board level.
Step forward Olhão’s mayor, António Pina, whose chameleon-led court injunction halted Polis until good sense prevailed. Pina takes a seat on the Polis board, this is not surprising as councils get a seat anyway, but the minister has decreed that two government board seats also will go to councils thus handing power to the five mayors whose areas include parts of the Ria Formosa natural park.
The government has relinquished those board seats normally occupied by the Algarve Environment Agency and the Institute for Nature and Forestry and Conservation. This means the reviled Sebastião Teixeira, the sacked Polis president and current head of the environment agency, has no say in demolitions or any other part of Polis’s business.
It could have been five good news items but for the confirmation by the Secretary of State for Health, Manuel Delgado, that the Algarve’s new hospital is as far away as ever from being constructed.
Álvaro Viegas, from business association ACRAL, said: "The new hospital is crucial to the sustainability of tourism in the Algarve: security, including health services, is one of the pillars of the destination's competitiveness: without effective health services the region’s image is degraded."
The first stone for the new hospital was laid in 2008 amid much rejoicing: then came the economic crisis and all such plans were shelved.
The government really cannot bring itself to admit that the financially disastrous ‘swaps’ deals signed between the Spanish bank Santander and some of Portugal’s transport companies are valid and payments must be made.
Spending millions in legal fees just to postpone the inevitable is not sensible. Santander now is owed €1.8 billion after the former Finance Minister Maria Luís Albuquerque decided to suspend payments in 2013, claiming they were unfair.
The Portuguese State has just lost its fifth ‘swaps’ court case in London but is to appeal yet again, this time to UK’s Supreme Court.
This seems to be more a case of kicking the inevitable repayment into next financial year than of having any realistic hope of winning in court against Santander.
The ripped-off, misled and cheated BES customers whose savings were switched into failing Grupo Espírito Santo companies, such as Rioforte, are hopeful of a deal to recover at least some of their hard-earned money.
BES went bust in August 2014 and when the socialist government came to power in the autumn of 2015, Prime Minister António Costa displayed justifiable irritation at Bank of Portugal governor Carlos Costa and the head of the Stock Market Regulator, Carlos Tavares, who each were blaming the other for the fiasco at BES that had seen customers’ savings wiped out.
A final round of meetings to hammer out a solution was started last Monday and still there has been no result. The shameful behaviour of the Bank of Portugal continues: it was the Bank of Portugal governor’s fault that BES had been excused from normal banking checks and balances for years. Assurances from Ricardo Salgado over a good lunch that “all is well at BES” should have caused concern.
Had the regulator managed to do a bit of regulating, Costa might have prevented the €3.6 billion loss that sent BES and much of its customers’ money up the Swanee.
A new report into water pricing has concluded, to the Secretary of State for the Environment’s cheery delight, that prices must go up as current water bills do not cover the cost of supply.
Carlos Martins is aware that the previous government had advanced plans to rationalise the water industry in a prelude to privatisation. This was reversed when the socialists came to power and the current muddle means that prices do need to rise to pay for this hugely inefficient and politically driven industry – whatever the excuse. Secretary of State Martin’s chosen excuse of rate hikes was ‘to help the poor’ but nobody seriously believes this feeble effort of justifying prices increases to swell council coffers at the expense of the public.
The previous government’s attempt to rationalise Portugal’s water supply was a good plan with the wrong objective. The industry needs to be sorted out, just look at the abusive situation at Loulé’s water company Infralobo and its appalling customer care, but it does not need to be sold off as was the Passos Coelho plan.
There is a good case for essential services such as water to remain under State control. The mess and muddle that has been allowed to grow unchecked into dozens of local monopolies does need to be rationalised. A price hike ‘to help the poor’ is not the solution Sr Martins – think again and this time with a bit of intelligence.
One council that has recognised its water customers are being served poorly is Lagos whose engineering works at Bensafrim has left householders at their wits’ end.
Intermittent water supply, water ‘with bits in it’ when there is some pressure and no end in sight has led the council to reduce water bills until things are flowing smoothly again.
This sort of decisive and fair solution in Lagos is a sharp contrast to Infralobo’s attitude of ‘screw the customer – see you in court.’
Portugal electricity is the most expensive in Europe when compared to wages. It should be no surprise then that in the Algarve 29,060 electricity customers qualify for the ‘social tariff’ cheap rate deal that now is automatically triggered for those on less than €5,808 a year.
As EDP continued to hide details of the cheap rate scheme, picking up a €7.5 million fine from the regulator for doing so, the government sensibly made the discount automatic for low income families as this financial information already existed in tax returns and social security claims.
The head of EDP, António Mexia, has been bleating that his company should not have to pay to subsidise the poor. This is man whose daily gross pay in 2015 was almost exactly the same as his customers’ poverty threshold of €5,808 a year.
Clearly Mexia has forgotten, or more likely never realised, that it is his customers who make his pay day possible and each should be treated with respect.
It continues to surprise even hardened journalists the diverse areas of public life where managers and directors have their snouts in the trough.
Portugal’s plasma supply to the national health and ambulance services comes from just one company, Octapharma. It turns out that Luís Cunha Ribeiro, the former head of the country’s ambulance service, has been living rent free for 14 years with a choice two luxury apartments owned by a company controlled by Octapharma’s chief.
Octapharma was in the headlines in 2015 when it fired former PM José Sócrates from a lucrative €12,000 a month consultancy role as he had been arrested. Strangely, Sócrates had an apartment in the same luxury Lisbon block as Ribeiro.
The monopoly supply contract seems to have been fixed by Ribeiro in return for a life of luxury. How sad that someone involved at the very top of the country’s healthcare service had been consumed with corruption and avarice.
For those following the Herdade da Comporta story - this is the beautiful Espírito Santo family estate that needs to be sold off to repay creditors of Rioforte - the man in charge of vetting the bidders has been ‘let go’ from China’s Haitong Bank.
Officially, José Maria Ricciardi, a cousin of the disgraced banker Ricardo Salgado, has left to pursue ‘other interesting projects’ but those potential bidders that Ricciardi made sure were blocked from bidding for the two Comporta companies now have a hope of being treated fairly.
One of the bidders blocked by Haitong Bank, the experienced financier Asher Edelman with US investment specialist Armory Merchant Holdings, discovered that two bids had been accepted by Haitong Bank despite these bidders breaking the rules by being in contact with family shareholders – the reason Edelman had been barred from making a bid.
When this bid information was published along with the bidders’ names, the sound of merde hitting the fan could be heard from behind the closed doors of the Haitong Bank’s boardroom.
On Friday, two more directors of Haitong Bank left ‘to pursue interesting projects’ and it is hoped by Rioforte shareholders that a bid nearer the €200 million mark, rather than the fixed ‘insider bidding’ of €50 million will be offered and accepted.
More good news: Open Media, based in Lagoa, has printed its 100th edition of Essentials Algarve, no mean feat for the publisher to keep the Algarve’s home-grown glossy going through the economic crisis when general spending on luxury goods took a tumble.
You can read an online copy by following this link:
The Saint Andrew’s Society of the Algarve informs us that it held a highly successful Saint Andrew’s Ball at the Penina Hotel in November and now is taking bookings for the Burns Night Supper at the Ponte Romana restaurant in Silves on Saturday 28th January 2017. I add this now as these tickets sell quickly.
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