Rui Rocha - and many others - may disagree with the State's expenditure but there is nothing they can do right now to stop it: the government has an absolute majority. Image: MIGUEL A. LOPES/LUSA
Rui Rocha - and many others - may disagree with the State's expenditure but there is nothing they can do right now to stop it: the government has an absolute majority. Image: MIGUEL A. LOPES/LUSA

EFACEC reprivatisation – “another drain on taxpayers’ money”

Centre-right IL accuses government of having buried €400 million in Efacec

In financial terms, the bailing out for onward sale of engineering company Efacec has been small potatoes when compared to the €3.2 billion euros invested by the State in national airline TAP – but it is still enough to have riled opposition parties.

Today, Rui Rocha, the leader of centre-right Iniciativa Liberal, has been the first to accuse the government of having buried €400 million in the company, a figure which, he says, exceeds the amount in the State Budget for 2024 “for the entire economy for one year”.

Between direct injections, shareholder loans and bonds, it is now known that António Costa’s government has buried €400 million euros of taxpayers’ money in Efacec,” Rocha wrote in a message published on his X account (formerly Twitter) – considering this to be “another huge drain” of taxpayers’ money “sponsored by the Socialists“.

Efacec (nationalised in 2020 following the fall-out of Luanda Leaks scandal) was sold to German investment fund Mutares on Tuesday, after obtaining the necessary approval from the European Commission.

The State however had to put another €160 million euros into the company to ensure what has been termed as the ‘cleaning up’ of Efacec’s financial situation.

Without that extra injection, a press conference held by the Minister for the Economy, António Costa Silva, and Secretary of State for Finance, João Nuno Mendes, heard that the deal would not have gone through.

Thus, the €160 million was in addition to the €200 million euros the State put into the company over the last 20 months (to pay fixed costs, including salaries). 

Also in the State sphere, Banco de Fomento has €35 million in bonds (convertible into capital) of Efacec, writes Lusa, having explained yesterday how both banks and bondholders have had to take a dramatic hit to get this deal over the line.

Reacting to the situation, Rui Rocha said: “If we take into account the 180 million euros for capitalisation and other one-off programmes, we can happily arrive at 300 million channelled to companies in the 2024 State Budget. António Costa has put 100 million more into a single company than he foresees in the State Budget for the entire economy for one year,” suggesting that the Minister of the Economy’s suggestion that this was a  “a happy day” was in fact anything but.

Mutares expects Efacec to break even in five years – and is obliged by the terms of the deal to stay with the company for at least three years (without selling), and maintain its base in Portugal. 

Efacec has around 2,000 employees, Lusa concludes.

After this text went up online, PSD leader Luís Montenegro said his party is considering calling for a parliamentary inquiry into what he sees as “a ruinous deal”.

“Injecting €400 million and selling it for €15 million is clearly a ruinous deal”, he said in Arruda dos Vinhos, where he was taking part in one of the party’s ‘Sentir Portugal’ (Feel Portugal) events.

“Once again, the Socialist Party government is bailing out companies with taxpayers’ money“, which “is not really good management of public resources (…) António Costa and the Socialist Party are playing with the money of Portuguese people“, he said.  “They are injecting money into companies to save them, to the detriment of what are public resources that could have been used and could be used for other purposes”.

Montenegro considered that €400 “is more than what is needed” to restore time ‘frozen’ in teachers’ careers, a proposal made by his party but rejected by the PS.

This ‘outrage’ ironically comes on a day in which an international report has highlighted how  Portugal is falling in terms of political representation in a democracy. ND