Post Office seeks €67 million from State due to pandemic

CTT, the private company running Portugal’s postal service, has asked the State for €23 million in compensation “for the impact of the pandemic” – and is seeking another €44 million for the unilateral extension of its universal postal service till the end of 2021. 

Explain reports, the government has already ‘rejected the claim’, thus the matter is now in the hands of arbitrators.

The two ‘amounts’ correspond to values CTT “with available data” believes it is entitled.

A statement issued by the company infers that numbers could actually be revised upwards, “subject to updating, appreciation” and the arbitrators’ final decision.

The idea of the arbitrations process is to “examine issues relating to the sustainability of the universal postal service concession contract” which the government ‘extended’ due to the pandemic., despite CTT’s contract having come up for renewal on December 31, 2020.

Says ECO online, for the company, the decision was taken unilaterally, and therefore requires compensation. The original contract “predicted a certain level of service that did not materialise due to the pandemic and confinement measures”.

CTT clearly believes it has the law on its side. But where this will lead the postal service is  unclear.

ECO explains “CTT has been pressuring the government to streamline current quality indicators which which it considers it “impossible to comply”. The company refuses to provide the service in a future contract if no adjustments are made. It has even threatened to create a similar service, but private, in which it would dictate the rules”.

The situation hasn’t been made any easier by regulator ANACOM suggesting that it could “tighten quality criteria” in any future concession. “For example, the regulator could force the concessionaire (meaning CTT) to make even higher cuts in mail prices in the event of a default”.

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