The government this year wants to conclude an extensive analysis of the renegotiated Public Private Partnership (PPP) arrangements for Portugal’s road network.
This is a serious exercise to determine "the real reduction of net charges" for the taxpayer, according to the Minister of Planning and Infrastructure, Pedro Marques.
The previous government made much of its skilled renegotiation of the PPP deals and announced huge taxpayer savings but these turn out to have been fictional as the taxpayer now has to pay for road repairs which formerly were the responsibility of the commercial partners.
Pedro Marques, said in parliament that the savings announced for nine of the renegotiated PPPs for roads are about a quarter of the figures announced.
"Of the nine PPPs that the previous government renegotiated, the savings are about a quarter of the announced figure", adding that the higher figure was mere propaganda. Marques was reporting to a joint Budget and Finance Committee and Committee for Economics and Public Works hearing to try and get to the bottom of the duplicity of the previous government.
In response to Hélder Amaral, a CDS-PP member of parliament, Pedro Marques stressed that "in the government accounts, the savings amounted to a brilliant result of €2,500 million, but in fact they are €700 million."
"This is because we have not reached the final stage of the life of these contracts," added Marques, noting that only then will we know the final cost of major road repairs, which in the renegotiations, cunningly became a state responsibility.
PPP funding schemes, which guarantee reimbursement on private investment but can be risky for the state, contributed to the economic imbalances that forced Portugal to seek an international bailout.
In Portugal's case the government used overly optimistic projections for traffic volumes, interest rates and profitability while the partners, many of whose boards are filled with former politicians, have a guaranteed high return courtesy of the taxpayer who is left with an inflated bill for little service.
