Portugal’s General Inspectorate of Finances has looked at the €187 million claim for compensation for the cancellation of the €11.6 billion high speed rail network and decided just 20% of the total applied for is justifiable.
The TGV pipe dream had been drifting around since 1988, finally was authorised by the José Sócrates government and promptly was cancelled by Passos Coelho in 2012 on cost/benefit grounds i.e. there was plenty of cost and no discernible benfit.
The audit reports followed which tore apart the slap-dash project with scorn heaped on the actions and inactions of both government and management.
A company established in 2000, RAVE, was in charge of the development of the necessary studies and the launch of the procurement procedures. The company’s management clearly did not want to rush things and finally failed in its objectives, having cost the taxpayer a large fortune in the meantime.
In the TGV project report, the conclusions were damning - no pilot studies, no previous experience and an large degree of ‘excess optimism’ which led the inspectors to conclude that the whole project was poorly thought out, financially reckless, badly planned and would be a burden on the taxpayer for decades to come with no positive benefit to the nation.
The PPP financing was singled out for criticism and luckily was rejected by the Court of Auditors which marked the beginning of the end of the whole expensive affair. There also was justifiable suspicion from the public that part of the €11.6 billlion financing would end up sticking to politician's pockets.
The Auditors’ report noted that the 12 year TGV viability study alone had cost the taxpayer an incredible €153 million. In addition to the 'studies undertaken,' the TGV project cost the taxpayer €32.9 million in 'structural costs' - whatever they were.
After the scheme was cancelled by the current administration, the Ellos consortium led by Soares da Costa SA and Brisa put in astonishing claims for €187 million in compensation for the railroad that was never built.
These companies wanted €187 million but have been awarded just €28.5 million of which the state already has paid €16.7 million on account.
This has been an expensive shambles, poorly conceived, unplanned, unprofessionally managed.
Thankfully, the final insult, payment in full of a well padded compensation claim, has been stopped dead in its tracks by the General Inspectorate of Finances who earns that thanks of a grateful nation.
