For the first time, the Court of Audit (TdC) issued its opinion on the General State Account (CGE) for 2021 before the presentation of the State budget proposal. In the document handed over to Parliament yesterday, the entity led by José Tavares criticizes the lack of information and transparency about public-private partnerships (PPP) and other public concessions, and warns of the “material risk of lack of control over this universe by the state”.
The problem starts immediately with the identification of the number of PPPs and other concessions (OC), and extends to the estimation of revenues and expenditures of these partnerships and concessions to the private sector and future impact on public accounts.
According to the information recorded in the CGE, the PPPs have increased from 38 in 2020 to 39 in 2021, but only 35 are taken into account in the CGE. 2012, acknowledging in response to the Court that there are “with some probability, more PPPs than those that UTAP “inherited” when it was founded and than those it currently reports, which makes mapping this universe of structured, comprehensive and ongoing contracts required”. However, UTAP states a lack of “human and technical resources to take on and develop this project in all its fullness and with all its consequences”.
The Court’s opinion concludes that ten years after the creation of this unit, “the universe of PPPs is still not certified, the action of UTAP remains ineffective and there is a material risk that the state does not have control over this universe”.
Regarding the information on PPPs in the 2021 CGE subject to the opinion, the document reads that “the CGE continues without providing information on the legal obligation of continuous evaluation of PPPs by public partners, namely with regard to the economy and the increase efficiency in the allocation of public resources, compared to other contract models, as well as the qualitative and quantitative improvement of services, are the essential goals of PPPs”. In addition, the document adds that “the effects on the national accounts of the net levies, in their entirety, borne and payable with PPPs and OCs, continue to be disclosed”.
Court notes “disproportionality” between the net costs of PPPs paid by public and private partners. Between 2011 and 2021 they amounted to €13,436 million and €4,181 million respectively.
According to the Court’s opinion, the Treasury Department rejects the allegations, explaining that “the presentation, in the state budget proposal, of the reasons for resorting to partnerships with the public and private sectors, as well as global information and information on annual and multi-year PPP expenditure and on respective global debt.” Finance also underlines “that the universe of PPP contracts is dynamic, due to the contract life cycle and the evolution of these contract models,” the document said.
But after hearing the explanations from the Project Monitoring Unit and the Ministry of Finance, the Court maintains the negative assessment: “In summary, the hearing of MF and UTAP confirms the lack of knowledge of the PPP and OC universe, which increases the risk of a lack of state control over this universe, as illustrated by the lack of information at this headquarters [CGE 2021]on public service concessions relating to the universal postal service and the management, operation and maintenance of the SIRESP network – integrated system of emergency and security networks in Portugal”.
Cost of 1542 million
The net costs for PPP registered in the CGE 2021 amount to 1,542 million euros, 69 million more (5%) than what is stated in the CGE 2020 and five million euros less (0.3%) than the government’s forecast in the Government Budget Report for 2021 .
But for the institution headed by José Tavares, the problem, more than the figures presented, is the lack of reliability of the information. The TdC illustrates this with data from road and rail PPSs. “In road construction, an estimated 70 million less was received and 27 million more spent than expected, 19 million more received and 46 million less spent than estimated. Three million less were spent than estimated,” he notes.
UTAP justifies that the discrepancy in road sector revenues was due to the decrease in road traffic due to the fact that the measures to combat the pandemic were higher than expected (in October 2020), and that “the verified increase ( 19 million) compared to the estimate was due to the traffic recovery that occurred between that estimate and the end of the year”.
For the reduction of 46 million in the burden instead of the expected increase of 27 million, UTAP justifies the postponement of costs for major repairs. But according to the Court, “these allegations cast doubt on the reliability of the forecasting process, with estimates not prejudging the verified inflections with regard to the foreseen scenarios”.
The advice also underlines the disproportionate burden-sharing between public and private partners. Between 2011 and 2021, these expenses amounted to 13,436 million euros for the State (1,542 million in 2021) and 4,181 million for the private sector (127 million in 2021). € “The lack of information on the accumulated revenues and expenses of each concession (including investments) does not allow to evaluate the implementation of the respective contract,” reads the opinion.
The Court also disputes the omission of information in the 2021 CGE on airport concessions (ANA Aeroportos). “In fact, the airport sector is moving forward without any forecast (in the OE report) or implementation (in the CGE), despite the fact that in 2018 two public service concessions (concluded in 2012 and 2013) were included in the PPP universe “.
For the institution led by José Tavares, the lack of information makes it difficult to estimate the long-term budgetary risks of PPPs and other private concessions.
Source: DN
