Necessary boost promised for projects to power Portugal forwards

Necessary boost promised for projects to power Portugal forwards

Weeks after returning to power – and with the European economy flagging – PS Socialists have announced “a necessary boost” to massive industrial projects that promise to power Portugal into a money-spinning future.

Said infrastructure minister Pedro Nuno Santos visiting Sines last week: “There is work that has started in the previous legislature and will be continued. We want, together with the municipality and the administration of the Sines port, to give the necessary impetus so that we can quickly have the investments in progress.”

Tenders will be going out imminently – with the bottom line being that the country means to make the most of its strategic position as the ‘gateway to Europe’.

The largest schemes – for the expansion of Terminal XXI and a completely new Vasco da Gama Terminal – mean to transform Sines into the continent’s premier container terminal, capable of moving more than seven million ultra large containers per year.

Investment will run to roughly €1.3 billion and should have everything up and running by 2023.

What hasn’t been totally clarified yet, however, is who (or what) will be powering the initiatives forwards.

Reports in Portugal simply concentrate on the plans themselves – but behind the scenes there will be a scramble by both the United States and China to see who wins through.

The enormous container terminal will benefit both.

China’s Belt & Road initiative (a way of moving Chinese goods round the world) is dependent on the expansion of Sines, while the US has long wanted to use the port to transport liquified natural gas into Europe – an ambition recently dealt a blow by Spain (see story ‘Plans to pump US gas into Europe via Sines blocked by Spain’ at portugalresident.com), but one which US authorities are still pursuing.

Back in October, the then Minister of the Sea Ana Paula Vitorino told Público that “the winning proposal will be the one that offers the best benefits to Portugal regardless of the origin of the operator”.

At the time, CCTEBG (China Construction Third Engineering Bureau Group), a subsidiary of CSCEC (China State Construction Engineering Corporation) was in Lisbon, establishing contacts with ‘Portuguese counterparts’.

Said reports, “while Chinese investment has been directed to all major economic sectors, from finance to health, no major construction companies in Portugal currently have Chinese shareholders”. This now looks like it’s changing.

Online economic news service Macauhub reported that: “At least five Chinese consortiums, including COSCO Shipping, which is the largest Chinese shipping company and has a strong presence in the Port of Valencia, Spain, and also in the Greek Port of Piraeus (Athens), have been in contact with the Port of Sines and the Algarve Authority (APS), as well as aicep Global Parques, a state-owned company that manages industrial parks across Portugal.”

Chinese investment is also said to be behind the €1.2 billion project to develop Montijo as Lisbon’s second airport.

This plan recently ‘hit a blip’ with environment agency APA demanding €48 million compensation measures, but everything points to the project being pushed forwards ‘come what may’.

One top level investment that doesn’t appear to involve Chinese capital is that announced on Tuesday by secretary of state for energetic transition João Galamba.

In the news constantly these days, Mr Galamba announced that the government means to bring “a gigantic hydrogen factory” to Sines.

The ‘green hydrogen’ is to be produced via a 1-Gigawatt solar plant, valued at €600 million.

Again, this is to be a privately-funded project, but this time involving a Portuguese-Dutch consortium.

Said the secretary of state: “We can say to the world and to Europe, and particularly to the northern states that need hydrogen, that we have one thing that the centre and north of Europe don’t have, which is the capacity to produce electricity at costs that make hydrogen viable.”

Thanks to this country’s plentiful sunshine, the project promises low-cost hydrogen which the government hopes will bring investors flocking.

But like all grandiose schemes, ‘there’s many a slip twixt cup and lip’. Much depends on how deftly ministers can put the deals together – and how efficiently support infrastructure, namely railway links, can be organised.

Said Macauhub in October: “The Portuguese government has been preparing the railway link tender which will allow for a direct connection between the Port of Sines (and those of Setúbal and Lisbon) to Badajoz, in Spain, thus completing part of the Atlantic corridor with the objective of bringing Portuguese ports closer to the rest of the Iberian Peninsula and Europe.

“This will be the most extensive new railway line built in Portugal in the last hundred years and will shorten the connection from Sines to Badajoz by 140 kilometres and reduce transport costs by 30%.

“Begun in 2018, this project has a total budget of €509 million, with almost half financed by the EU, and will be completed in 2022.”

Considering the Montijo airport project is scheduled to start accepting passenger jets by 2022 – and work hasn’t even begun yet – it really does remain to be seen whether words translate into all the actions described.

By NATASHA DONN
natasha.donn@algarveresident.com