No more road concessions for Portugal

Portugal’s recently appointed public works minister has said that the country’s motorway concessions programme has been put on hold indefinitely as the government now focuses on developing high-speed rail and Lisbon’s new airport. The decision will not affect projects currently in procurement.

António Mendonça, Portugal’s public works minister, said at a recent conference that the government will not launch any new road concessions in the foreseeable future.

The government announced last September that it had mandated roads agency Estradas de Portugal (EP) to prepare the launch of four new concessions in 2010 worth over €1 billion. But it has now revised its decision as it plans to focus on the development of high-speed rail and Lisbon’s new airport, Mendonça said. The minister added that the decision is intended to secure EP’s financial equilibrium. Portugal posted a record high deficit last week of 9.3 percent of gross domestic product.

However, other factors are likely to also have influenced the government’s decision. Of the roughly 800 kilometres planned, only about 10 percent would be highways, which prompted a cold reception from the market.
Additionally, Portugal’s court of auditors, the highest independent body regulating public spending, rejected six of the highway contracts already awarded, plunging the original €5 billion roads programme into disarray (InfrastructureInvestor subscribers can read more about this issue here). But the decision will not affect the ongoing tender for AE Centro, the last road of the original programme, due to receive offers soon.

Portugal’s council of ministers has just approved the concession contract, awarded to a Brisa-led team, for a €1.65 billion tranche of its high-speed rail programme, clearing the way for the sponsors to reach financial close. A consortium led by Spanish construction company FCC is likely to be named preferred bidder for the second stretch, worth close to €2 billion.

In related news, the government recently approved the concession base for Lisbon’s new €5 billion airport, which will be part of the privatisation of airports operator ANA, paving the way for a tender launch, which could happen this year.