Pay back for Portugal

Portugal will have to hand back European Union grants totalling 1.3 billion euros if the PSD party wins the election in October and cancels the high-speed TGV project.

Given the 89 million euros already spent on environmental impact surveys and studies and the potential 550,000 jobs involved in engineering and civil construction, some members of the PS governing party in the Portuguese parliament argued on Tuesday that the TGV project linking Lisbon-Madrid must go ahead.

However, the Minister for Public Works, Mário Lino, is increasingly under pressure from the opposition PSD party to suspend the project while influential former cabinet ministers such as João Cravinho also believe the project should be shelved for the time being.

The President of the Republic, Aníbal Cavaco Silva, has been warning for some months that the country will only slide further into debt if the project goes ahead.

He said that if the country didn’t increase its production of saleable goods and services and raise its exports, the country’s balance of payment deficit with the outside world would become “unsustainable.”

So far the PS government has pledged a public works investment of around 45 billion euros between now and 2017 including an estimated 3.8 million euros for the TGV link between Porto and Lisbon, 3 billion for TGV link between Lisbon and Madrid, 800 million for a TGV branch line between Braga and Valencia and 4 billion euros for Lisbon’s new international airport.