Expresso Demistifies Government Debt Denial

The Secretary of Finances had denied this week that the Madeira Debt had reached 8 billion Euros. According to the Expresso, the contested 2 billion disparity relates to the Public-Private enterprises, for the companies exploring the regional roads.

Of the 2 billion total accorded with the concessions, 600 million had been paid up until 2010. Although there is an annual fee for the Government to pay, this is only considered a debt (according to EU Comission criteria) if the Government defaults. According to the Secretary of Finances, the default in December 2011 only amounted to 170 million Euro.

The Via Expresso and Via Litoral partnerships were established in 1999 and 2004 and will oblige the Government to pay them a further 1.3 billion between 2012 and 2029.

In short, the Government has contracted debts of over 8 billion Euros, but only consideres 6 billion to be in debt.

The Via Litoral, set up in 1999, has as its main shareholder AFA, owned by Avelino Farinha Agrela (and unidentified offshore shareholders).

Via Expresso, formed in 2004, has Tamega as a main shareholder. The most important regional construction companies are sharehodlers in both.

(The main companies are also shareholders along with the PSD leader, Jaime Ramos, in Cimentos Europa, the company that supplies most of the cement to the public works in Madeira)

Jaime Ramos, Secretary General of the PSD and PSD Parliamentary leader, is also President of the Construtors Association - ASSICOM; Avelino Farinha Agrela (AFA) is the chariman of the ASSICOM General Assembly.

The Institute of Fianacial Administration, in its September 2011 report, alerted that these contracts were highly profitable for the private entities with no risk involved.