Officials of the German company Ferrostaal admitted today that the Falesia Hotel project in the Algarve, destined to receive investment as part of the submarines contra-deal, was not viable and had been dropped. Instead the Germans said they were looking at investing in a project at the shipyards at Viana do Castelo.
At the end of today's court session, the questioning of the Ferrostaal former vice-president Horst Weretecki in the bribery and corruption trial over the Submarines affair, led to his lawyer's acknowledgment that difficulties had arisen in the implementation of the Falesia project, and the German company was studying alternatives.
Ferrostaal, part of the German Submarine Consortium which sold two submarines to Portugal in a billion euro deal, was required to invest money in Portugal as part of the deal but this never happened. When this was discovered, a new agreement was signed with the then Economy Minister Alvaro Santos Pereira to replace the original one, which included the reconstruction of the hotel at Falesia.
Based on this new agreement, Nuno Godinho de Matos, defence lawyer, asked the judges to terminate criminal proceedings and cancel the trial, claiming that the Portuguese state could no longer claim to have been financially injured. This request was refused by the court.
Today Godinho de Matos said it had not appealed this decision because "at this stage, the Falesia project is not ongoing."
Asked to comment, Sofia Martins, the Ferrostaal lawyer who has been following this trial from the public area, confirmed the existence of problems relating to Falesia Hotel, and admitted that Ferrostaal now was pondering whether or not to submit a new investment deal at the Viana do Castelo shipyard.
Questioned by the prosecutor today, Horst Weretecki admitted that the contra-deal documentation was signed without his reading it "in full," but that he had no reason to doubt the documents which were submitted by other employees of Ferrostaal.
According Godinho de Matos, between 1999 and 2004 Weretecki "played no part" in the contra-deal and can not be liable for acts done before his tenure, and that he should be acquitted of the fraud charges.
According to the accusations, around €30 million went missing in bribes to Portuguese officials in the deal whereby Portugal contracted to buy two submarines from the German consortium in 2004 for €1 billion. This all took place when Barroso was Prime Minister and Paulo Portas was the Minister of National Defence. The inquiry continues next Tuesday.
