Consumers won’t fund new reservoir


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EARLIER THIS year, following comments by the Environment Minister, reported in the September 8 edition of The Resident, it looked likely that consumer water bills would rocket in order to finance the completion of the Barragem de Odelouca, a reservoir which, it is hoped, will make the Algarve drought proof.

However, in a U-turn last week, Francisco Nunes Correia, who was in Faro to discuss the financing of the project, declared that, “there will be no increase in water tariffs as a result of the construction of this reservoir.”

He also confirmed that the construction contract would be signed on December 22, and work would begin straight away.

Around 70 million euros is required in order to complete the Barragem de Odelouca, an amount, which can be added to the 71 million euros that has already been invested in the project by the state.

At the meeting held at the Civil Governor’s office in Faro, between Correia and AMAL, the entity which represents the 16 Algarve câmaras, the Environment Minister presented a financial strategy for the project.

“The plan is for the region’s câmaras to invest 25 million euros in the capital stock of Águas do Algarve, the company which is responsible for the reservoir project, as well as the region’s water supply and basic sanitation,” he said. It was made clear though, that only a fifth of this amount will be directly used towards the funding of the reservoir, with the remainder to be used for other important infrastructure investments in the region. 

“All the câmaras can participate in the raising of this capital, but should they opt not to go ahead, Águas do Algarve will raise the funds, guaranteeing to the câmaras that when they wish, they can rethink their position. This means that the câmaras will not be at risk of losing their rights,” explained the Minister.

A further 20 million will be derived from other investments that Águas do Algarve is making, at the request of the câmaras.

Contract extension

Another of the measures foreseen as part of the financial strategy presented by the minister is the extension of the concession contract held by Águas do Algarve until 2037, (a further six years for basic sanitation and 12 years for water supply management).

An important factor that should also help the project’s financial situation is the announcement from Brussels that the environmental contravention case against Portugal has been shelved. European Union funding for the project had been withdrawn back in 2003, due to a complaint by the Liga para a Protecção da Natureza (LPN), the nature protection league. The LPN alleged that the construction of the reservoir would destroy important habitats and would violate EU directives. Changes were later made to the project by the Instituto da Água (INAG), on the request of the Environment Minister at that time (Luís Nobre Guedes). The environmental issues were also communicated to Portugal’s nature conservation institute, which was made responsible for implementing supplementary measures for the maximum protection of the area’s biodiversity.

“With these measures, which were agreed following a careful and detailed analysis of the project, we will be able to construct the Barragem de Odelouca, commencing work immediately and completing within two to three years,” announced Correia.

AMAL lobbied the government continuously over the possible plans to finance the reservoir through the increase in water tariffs for consumers.

In May of this year, AMAL President, Macário Correia considered that what was being suggested was “a solution that has never been adopted in Portugal (charging consumers for infrastructure projects via their utility bills) and that must never be imposed on the Algarve”.

The government, it seems, did listen to the complaints from Algarve câmaras and the decision would seem to represent excellent news for consumers on the eve of the New Year. Having said this, the opposition party are not wholly convinced that the people on the street should start celebrating just yet. The Resident contacted Social Democrat MP for the Algarve, who had the following to say:

“Everything that might contribute to the Odelouca Project going ahead, will be welcomed by the PSD. We have considered, in our last electoral programme, Odelouca and the Algarve Central Hospital as the two most important investments on the list of priorities for the Algarve. But, so far, what we have are ministers’ declarations and announcements, drafts and papers. Nothing new and relevant, at regional level, is currently being built by the state in the Algarve. And this government has already been in place almost for two years. The financial perspectives for the coming years in the Algarve are horrifying, concerning European funds, national budget and local finances. So, I wait to see the day the works are really starting on the ground. Then we will talk. We keep pressing and putting demands upon the government. That is our job as a responsible opposition party.”