Lisbon Câmara in audit court ruling appeal .jpg

Lisbon Câmara in audit court ruling appeal

THE PRESIDENT of Lisbon Câmara has stated on national television his incomprehension as to why the national audit court, Tribunal de Contas (TC), refused permission for a 360 million euro bail-out bank loan.

The loan, without which the Câmara cannot operate, is needed to pay creditors and suppliers, who in some cases have not been paid in three years.

The audit court ruling was made because the loan, 500 million euros in all, was above the amount currently stipulated by the Local Government Finance Law, Lei das Finanças Locais.

In a televised interview last Thursday on RTP1, Câmara President António Costa accused the TC of having “badly applied a law” which he himself had helped to set up.

Badly applied

The law was introduced by the current PS government to set spending and borrowing ceilings on municipal authorities which in the past 10 years have fallen increasingly into debt.

António Costa blasted the decision as “completely inadequate” and claimed that the TC was insisting on “completely unnecessary” measures.

Refusing to accept the idea that he had “fallen victim to his own legislation”, António Costa said that he felt the law had been “badly applied”.

“I respect their decision but it doesn’t mean that I agree with it. Laws are like children, they develop a life of their own. Just as I wouldn’t want to see my own children badly treated, I also don’t like to see a law that I created abused,” he said.

The Tribunal de Contas has insisted that it will only approve the Câmara’s loan if it can draw up a detailed annual investment plan for each of the 12 years covered by the loan – showing projected receipts and outgoings.

“One could argue that the Tribunal de Contas is not competent enough to judge the merit of the Câmara’s Sound Financial Management Plan, Plano de Saneamento Financeiro, as it has judged the loan,” countered the President.

The Câmara’s Sound Financial Management Plan is a package of cost-cutting and fund-raising measures aimed at paying off the municipal authority’s crippling billion euro debt.

The amount owed to suppliers stands at over 254.5 million euros, its debt from the Expo site development is 144.5 million euros, and its total service debts runs to 52.9 million euros.

Among its measures are the sale of Câmara-owned land and property, moving Câmara services to cheaper premises, slashing administrative costs, axing staff, putting up rents where possible, and getting so-called false Green Receipt temp staff off the payroll.

Other possible ways of clearing the debts would be to introduce a sewage and waste water tax and rubbish collection stealth tax on each household, which would show up on the monthly EPAL water bill and could add as much as 10 euros onto the average family bill per month.

The TC refused the Câmara permission to accept the loan because it considered that the “Câmara’s receipts were less than 50 per cent of its total debt to creditors and suppliers” and added that the Câmara’s “financial imbalance was structural and not circumstantial”.

Do you have a view on this story? Email: