Despite many councils receiving state loans to pay off their debts last year, the amount they owe to Portugal’s national water supplier rose last year by €5 million.
The Águas de Portugal accounts were approved on Tuesday but did not make happy reading as the company attempts to groom itself for probable, yet hotly denied, privatisation.
Some aspects of the company's performance were reported as positive, such as the rise in net income from €93 million to €104.7 million, but the main area for concern was the increasing debt of its customers despite payment plans agreed with many municipalities and the hope that the when LMP (Programme to Support for the Local Economy) money started to be doled out by central government this would be used to pay off water debts.
Last year did see Águas de Portugal’s overall debt level reduce by €100 million to €2,544 million but its investment in the nation’s water and waste infrastructure fell from €229 million in 2012 to just €162 million last year in a slow down in an industry that needs to modernise and upgrade.
Águas de Portugal Group is undergoing restructuring to reduce the 19 regional water utilities to just four (North, Central, Lisbon & Vale do Tejo, and the Algarve) in a precursor to part or total privatisation, despite government denials.
A government statement in January this year about Águas de Portugal's future read that "the Government's strategy is to restructure the water sector so as to provide greater social and territorial cohesion, environmental quality and economic and financial sustainability through the aggregation of multi-municipal systems."
However, potential buyers already have been identified, from France - Veolia and Degremont, and from Spain - Aqualia. These companies have sufficient cash to buy Águas de Portugal which in 2011 was valued at €1 billion, a tempting prospect for the government and a move that inevitably would see the end user funding dividends to private shareholders.
