Submarine ‘swop’ deal falls through

The refurbishment of the Alfamar Hotel in Albufeira, estimated at €150 million as a counterpart for the purchase of two German submarines by the Portuguese government in 2004, may not be accomplished, according to the German industry services provider Ferrostaal.

The company’s spokesperson admitted earlier this week that the project is stalled and that other solutions are being considered.

Godinho Matos, a lawyer for the three German men who are being tried for fraud and falsification of documents in the counterpart process, had already said that the project would mean a €220 million investment and it would fall through.

The Portuguese government and Ferrostaal are said to be negotiating a new deal.

The German Submarine Consortium (GSC) and the Minister of Economy Álvaro Santos Pereira signed the contract relating to the counter deal last October.

It aimed to replace the previous deal comprising a number of compensations for the Portuguese government, which were not carried out by the German firm after the purchase of the submarines.

The document also defined the terms and conditions of the project, which comprised the transformation of the Alfamar Hotel, located at Praia da Falésia beach, into a fully fledged luxury resort.