Portugal’s new political alliance of left-of-centre parties is presenting a united front as policies hammered out over the past weeks now are set.
One of the agreements is for the cancellation of the TAP privatisation, or, if the current government signs off the deal in the next 24 hours, the reversal of the sale of TAP to successful bidder, Gateway.
Gateway is owned by David Neeleman and Humberto Pedrosa who will not be best pleased when the Left Bloc/Socialist alliance votes down the ruling coalition tomorrow and gains power as months of work on the TAP bid will come to an abrupt end.
The cancellation of the sale by the State comes under ‘in the public interest’ which has been available as a get out clause since 1974.
If the Socialists/Left Bloc gets into power before the TAP deal is signed, cancellation will be the easiest and lowest cost option as ‘in the public interest’ also means zero damages or compensation.
If Pedro Passos Coelho is feeling bloody minded, the deal can be signed today or tomorrow and higher costs later may be passed on to the taxpayer.
Either way the taxpayer is in for some additional expenditure as Gateway anyway is allowed to charge the state for legal costs it has incurred when mounting its bid for TAP.
The Treasury also will have to return the €2 million deposit paid over in June, 2015 when Neelaman and Pedrosa signed the initial sales agreement.
If the sale gets completed before it is cancelled, then the State will have to send back the other €8 million of the paltry €10 million agreed as the taxpayers’ cut of the deal and leaves itself open to compensation claims from Gateway's lawyers, despite what the 1974 laws state.
The cancellation of the TAP privatisation process always was a known factor to the owners of Gateway and fingers are crossed that the government of today has not promised additional compensation should the sale fall through.
