LISBON METRO is facing financial meltdown with accumulated debts of 3.3 billion euros and average annual debts standing at 160 million euros.
The total debts represent a shocking 2.2 per cent of the nation’s Gross National Product (GNP), yet despite the figures transport unions are set to continue the series of damaging one-day strikes, which crippled commuters eight times in 2006.
In a recent interview with the business daily Portuguese newspaper, Diário Económico, the new President of Metropolitano de Lisboa (ML), Joaquim Reis, warned: “In 2007, the company’s total global salary costs is likely to reach 100 million euros, rather than the 90 million euros we had originally anticipated.”
This amount encompasses not only the salaries of the 1,700 staff, but also their pensions fund and social security discounts.
Apart from this 100 million euros a year, ML spends a further 75 million euros annually on servicing its debts in interest rates, 40 million euros for external services and between 30 to 40 million euros in paying off debts (not including interest rates).
“When it comes to expenses, we’re facing annual costs of between 240 and 245 million euros a year, whereas when it comes to receipts, including sales, advertising, renting space, passes and tickets we’re only making 85 million euros a year,” he said.
In order to “stem the bleeding” ML’s new president warns that the company “will have to restructure”, cutting costs, reducing staff, look at ways of making space and property rentable, raise fees and join forces in the short term with bus company Carris.
Despite the fact that an agreement has been reached between unions and ML on the re-structuring of the company, the salary freezes imposed by the financial situation mean that the series of Tuesday morning strikes looks set to continue.
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