The Minister for Planning and Infrastructure, Pedro Marques, has said that the renegotiation of the public-private partnerships for Portugal’s roads will not bring anywhere near the level of savings claimed by the previous government.
"We are following the negotiations of these PPP contracts. Negotiations are not yet complete, but we can draw some conclusions that there is a big difference between what was touted by the previous government, and the reality," said the new minister.
The previous government crowed that its deft negotiations had yielded taxpayer savings of €7.35 billion, following new agreements with the utilities and with the banks that had financed the deals, including the European Investment Bank.
"Those numbers that kept appearing have nothing to do with the value of any savings," said Marques, explaining that “there may be savings, but not the amounts announced."
The previous government concluded the renegotiation of six of the 14 PPP road contracts, namely Oporto, Greater Lisbon, Northern Interior, Beira Litoral, Beira Alta and the Silver Coast.
These contracts mysteiously had been exempt from the need for prior approval by the Court of Auditors but the auditors did spot during later audits that there was no guarantee that the negotiated reduction in costs would ever happen.
As for the Silver Coast PPP contract, the Court of Auditors said it was entirely possible that the taxpayer is likely to have to pay out more after the renegotiations, as major repairs are needed which now the State has to fund.
It was this ‘major repairs’ clause that allowed the coalition government to announce great savings when in fact transferring limitless liability to the taxpayer should these roads need fixing, which some need now and others will need in the future.
This political and financial con is not just up north, as the Algarve road contracts are included in the Court of Auditors’ list of shame.
These PPP contracts, many entered into during the Sócrates years of government, have mortgaged the taxpayer for years to come and have proved to be an expensive way of financing public works, one which left the door open for corruption and illicit payments.
The political spin given to renegotiations that merely shifted costs across to the taxpayer was carried out by former ministers Maria Luís Albuquerque and Pires de Lima, with the full endorsement of Pedro Passos Coelho. This is politics at is most shameless.
