The government acknowledges that it may need to resort to more money from the loan portion of the Recovery and Resilience Plan (PRR), totaling €2.7 billion, or even funds from state budgets to offset the increase in spending. with certain projects included in the program approved by the European Commission, such as the construction or renovation of 26 thousand houses or the new Lisbon metro line, which will connect Loures to Odivelas.
In the case of housing, the executive planned to spend €1.8 billion in grants and loans from the European “bazooka” to build or renovate 26,000 homes by 2026, when the PRR ends. But the rise in commodity prices and labor shortages stalled the executive’s plans, Presidency Minister Mariana Vieira da Silva supposed this Friday at a press conference on the response to the conclusions of the 2022 annual report of the National PRR Monitoring Commission, which criticized the implementation of the program on several points.
“There is the question of the increase in funding that will be necessary to meet the goals of the housing plan. If at the beginning there was a value for the 26 thousand houses, now with that same value it is not possible to build these 26 thousand houses,” he admitted to the ruler.
For this reason, “the government is considering using part of the loans in addition to the national budget to meet the measures in question,” revealed Mariana Vieira da Silva.
The budgetary slippage of this project is strongly related to the fact that “the PRR was negotiated at a time very different from the one we live in”. At the time, “there was no war and the country was coming out of a pandemic crisis”. Now the country is hit by “the price increases, the lack of access to raw materials and labour, which make it difficult to implement the PRR”, the official emphasized, revealing that for this reason “a process of reprogramming the PRR with the European Commission is underway, which will serve to strengthen the budget and define intermediate targets”.
The government’s goal is to be able to spend “part of the 1.6 billion euros that Portugal will receive and part of the Repower EU funds” on the construction of the 26,000 homes,” said Mariana Vieira da Silva.
The government wants to launch a tender for the new Lisbon metro line by June
The purple line of the Lisbon metro, which will connect Loures with Odivelas, has also already exceeded the budget approved by Brussels. “The cost estimate was 250 million euros, but at the moment it is already at 390 million, which is another 140 million euros,” said Environment Minister Duarte Cordeiro. This increase is due on the one hand to “the increase in material prices”, but also to the modification of the original project. “Initially the construction was planned to be only on the surface, but now the project includes a series of underground stations, making the work more expensive,” he explains.
Despite this, “the government will want the tender to run for the entire project and secure the amount not foreseen in the PRR,” he assured. “There are several options” to support this cost increase, whether it be “using the state budget or borrowing from the PRR or the European Investment Bank (EIB)”, he indicated, emphasizing that “there is no need to to think about plans B”. , that is, to change the contract.
This was one of the projects that received a negative note from the PRR supervisory committee. Duarte Cordeiro acknowledged that there is “a semester delay” but believes it is possible “to start the procedure for contracting the contract in the first half of 2023 and complete the work in the second half of 2026, although end of 2026. the PRR”.
Everything depends on the approval of the Environmental Impact Assessment. “The environmental impact study was submitted to the Portuguese Environment Agency on August 31 and was then in public consultation until February 14,” he said.
If there are further delays and the project exceeds the 2026 deadline set by Brussels, the government official admits to “completing some of the work later”, which means mobilizing more funds from the state budget. Coincidentally, that year ends the legislature of António Costa’s socialist absolute majority. If another party wins the parliamentary elections, there is a risk that Lisbon’s new metro line will fall by the wayside.
The total amount of the PRR (16.6 billion euros), managed by the structure of the Mission to Recover Portugal, is divided into three structuring dimensions: resilience (11.2 billion euros), climate transition (3.1 billion euros) and digital transition (EUR 25 billion).
Of the total allocation, approximately EUR 13.9 billion corresponds to grants and EUR 2.7 billion to loans. But this year, Brussels was allowed to strengthen the bazooka with a further €1.6 billion, bringing a total package of €18.2 billion
This plan, which runs until 2026, aims to implement a series of reforms and investments aimed at restoring economic growth, which has slowed sharply due to the Covid-19 pandemic.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
