The computer services company owned by the Algarve’s councils, business associations and banks finally has reached the end.
Globalgarve's main project was to create a digital network to link the Algarve's councils together. This cost €9 million and Globalgarve, the company that managed the system, has gone bust despite a capitve audience of customers.
When the assets, such as they are, were put up for sale for an optimistic €500,000, it was little surprise that there were no bidders.
As the councils as customers refuse to pay their bills and as they own the company they are unlikely to be taken to court.
The chairman of Globalgarve, Vítor Guerrero, blames the Algarve's councils for letting the company go under and also that its customers were "not charged for services that were provided to them," or if they were, they certainly did not pay for services rendered.
Guerrero also is president of the Traders Association of the Algarve, ACRAL, and at a press conference last Friday launched an appeal to the "decision makers" to save Globalgarve, asking the Algarve Tourism Board and the Algarve’s Regional Development body the CCDR to pay up as he claims both are dependent on Globalgarve’s top notch services.
The association leader somehow imagines that the "process is not yet closed," and that an interested party will come along and save the day.
Guerreiro does at least admit that he is confused as to how much was spent for so little by so few, when questioning how public funds were managed and how the more recent Algarve Digital programme was dreamed up and never completed yet cost €3.3 million.
Questioned by the media about the existence of "possible mismanagement," Guerreiro replied that he had no data to suggest this was true even though it is obvious to anyone connected to this massive financial mess that the incompetence shown by management is extraordinary, the financial controls seem to have been zero and the debt position was out of control years ago. With €20 million flowing in and out, and looking at the calibre of the people in charge over the years it would be very surprising if all of the expenditure and contracts had been above board.
In February 2014, under the expert tutelage of former Faro mayor Macario Correia, Globalgarve ‘invested’ in a 200 kilometre fibre-optic network across the Algarve to link councils together.
This cost €10 million and the recipients of this service simply have failed to pay for using it.
Globalgarve has managed to spend €20 million, most of it was 'free money' from EC funds.
Globalgarve is owned by the Algarve's Councils and dozens of incomprehensible regional bodies and it has been allowed to trade at a loss way beyond the three years allowable by law.
Jorge Botelho who heads AMAL, the mayors association said in February that the "vast majority" of the Algarve’s councils are in favour of continuing to be customers of Globalgarve despite the company being declared insolvent in January 2014 with debts of €790,000.
Botelho's crazed assertion was a statement of the obvious as any customer would wish to continue receiving something for free.
The company continued, but the council treasurers thought of more important invoices to settle, why pay money to a bust company, especially one that is never going to take you to court?
The president of the Algarve’s Association of Hotels and Resorts (AHETA) Elidérico Viegas, said last week that, "As the largest private shareholder, I cannot help but criticise the fact that key stakeholders, such as the AHETA has not been informed of the various steps that led to the demise of Globalgarve."
The fact that Viegas thinks he is a private shareholder is concerning as it is unlikely to be his own money at risk, more likely the money paid to hom by his members, the Algarve's hotels and resorts, who may wish to know the scale of the investment made on their bahalf.
Jorge Botelho is still looking for an easy way out "Why doesn’t the CCDR (which funded the project using EC money) buy the digital network?"
Guerrero said that the councils are paying for the service provided to them "below the price if the service was provided by Portugal Telecom or another competitor." Yet still this is massive and expensive failure due to waste and mismanagement.
Guerreiro has a habit of backing losers, the Traders Association that he runs has debts €1.5 million. The clothing entrepreneur promised in April 2013 when he was elected president of ACRAL, that there would be court cases involving former management members after he had a good clean out and found out who had been thieving.
Of course nothing has happened at ACRAL and it is becoming incresingly clear that substantial funds have been wasted or simply nicked from Globalgarve where nothing will happen again unless the police are called in.
Recent law changes made it illegal for councils to support loss making business. This showed Globalagarve up for what it was, a huge money pit that the councils have been supporting for years despite massive trading losses and the evaporation of grant money used to set it up.
The staff had to take Globalgarve to court for wage arrears last January and the whole mess started to unravel.
When Vítor Guerreiro took over in June 2013 he reduced some of the costs but failed to make a dent in the +€900,000 owed, a third of it to bust bank BES.
The Business Recovery Plan submitted to the court involved loading the company with more debt. This sensibly was rejected by the judge, a decision that Guerreiro found odd as "jobs were at stake."
Time and time again it is proved that teh Algarve's councils are not designed for, not capable of running such businesses.
Losses always are underwritten by their ratepayers who have no say in these absurd and expensive mistakes.
For background to this tale of incompetence almost beyond belief, see:
http://www.algarvedailynews.com/news/1405-insolvent-globalgarve-pleads-for-more-of-your-money
