Câmaras owe millions to construction companies

ALMOST HALF of all civil construction projects carried out for municipal authorities in Portugal have not been paid for, claims a shocking report.

On average, most Câmaras take at least six months to pay their bills at a time when civil construction companies are being penalised by higher interest rates from banks keeping them afloat while waiting for cash to come in.

If annual municipal authority investment stands at around two billion euros, then total municipal authority debt to construction companies has already reached 900 million euros.

The latest startling figures were released in December by the Portuguese Federation for the Public Works and Construction Industry (Federação Portuguesa da Indústria de Construção e Obras Públicas – FEPICOP).

The report did state, however, that there had been registered a slight improvement in the time it took to settle accounts. The average time span it took to pay a bill had been cut by two weeks, to 7.1 months on average.

Four per cent of all Câmaras in Portugal took more than 15 months to pay up, although in the year 2000 10 per cent of Câmaras had been in that category. Even so, FEPICOP claim that the situation of construction companies getting paid by local government councils on time “is getting worse overall”. “The situation has been made worse since interest rates have gone up,” said FEPICOP President Reis Campos.

The study analysed the payment position of 283 câmaras, of which 135 were considered reliable and prompt payers, “instilling a high level of confidence”.

The report also took into account the maximum legal limit laid down for the payment of suppliers by the government which stands at two months. It reported that the “overwhelming majority of câmaras paid significantly late” and only 38 municipal authorities managed to pay their bills to suppliers within three months.

According to FEPICOP, the worst câmara culprits took more than 15 months to pay and, in some cases, took as long as two years.

The worst offenders in the ‘name and shame’ list of councils included Cabaceiras de Basto, Castelo de Paiva, Figueira da Foz, Lisbon, Santa Maria da Feira and São Pedro do Sul. The quickest payers on the list were Castelo de Vide, Pampilhosa da Serra, Sabugal, Alcácer do Sal, Albufeira, Lagoa and Lagos which in some cases paid their bills within six weeks.

The same report stated that the Portuguese state itself, on average, took five months to pay bills whereas the European average stood at two-and-a-half months.

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