Portugal’s privatisation programme on track

Portugal’s privatisation programme, which aims to bolster the country’s ailing economy with a total revenue of around €5 billion, is on track, according to an official report.

This optimistic news is contained in an International Monetary Fund Country Report focussing on the Sixth Review Under the Extended Arrangement, which provides information about the progress of several sale processes as well as a general perspective about the entire privatisation effort by Portugal.

The sale of the postal company CTT is expected to be launched in the second quarter of 2013 and completed by the end of the year, later than the March 2013 deadline announced by the Minister of Finance Vítor Gaspar in September last year.

At the same time, the privatisation or concession of the rail cargo handling subsidiary firm of Comboios de Portugal (CP Carga) is expected to be launched early in 2013 and completed in the second or third quarter.

The report also mentions that a strategic plan for the water sector, which envisages the sale or concession of the waste management business, is being prepared with a view to introducing private capital and management in the water company Águas de Portugal (AdP).

The Government is also planning to launch a new tender “as soon as possible” for the sale of Portuguese airline TAP as the only bidder failed to present the necessary bank assurances for the completion of the deal.

Also mentioned in the report is the sale or concession of a television channel and radio station belonging to RTP and concessions for transport operators in Lisbon and Porto upon the completion of the restructuring of the public transport firms in these cities.

The sale of CGD’s health insurance is also revealed, with the report informing that the process to sell its insurance arm (Caixa Seguros) is ongoing.

But the sale of GALP and the small remaining stake in REN on the open market has been delayed until market conditions improve, said the report.

The report says that the completion of the ANA transaction should bring privatisation proceeds (including last year’s EDP and REN sales) to about 80% of the originally programmed revenues, around €5 billion.

The outcome of the ANA Aeroportos sale exceeded expectations and will generate overall revenue to the state of more than €3 billion.

There is a possibility that the privatisation programme will be expanded this year to include additional companies and assets, with the government working together with the municipalities and regional governments in order to identify the scope for further privatisation by preparing an inventory of their assets, including real estate.

The IMF concludes in the report: “We reaffirm our commitment to continuing with the privatisation programme, which we consider to be an important tool for opening up the Portuguese economy and bringing new investment that will increase Portugal’s competitiveness in the medium term.”