TGV to create 100,000 jobs.jpg

TGV to create 100,000 jobs

PORTUGAL’s HIGH-speed rail project, linking Lisbon to Porto and Madrid, should create 100,000 jobs over two years. The numbers were revealed by the Ministry of Public Works, Transport and Communications at a public presentation of the project, which should be completed by 2012.

Critics of the project have said that it is just a short-term job creation scheme for the construction industry and that government-led public works schemes do not solve long-term economic problems as they fail to create goods that can be sold on the market.

Prime Minister José Sócrates defended the project by saying: “Economic studies show that, without a shadow of a doubt, the project will be beneficial and positive for our economy.” According to the same studies, the TGV will involve a total investment of 8.2 million euros for both lines.

Sócrates also said that to delay or cancel the high-speed rail link would be disastrous for the Iberian Peninsular economically and would represent a significant loss of European Union funds, which would prove unacceptable for Portugal.

It is estimated that when up and running, “the TGV will generate operational receipts that will cover around 38 per cent of the total liquid investment,” said Minister of Public Works, Transport and Communications , Mário Lino.

The European Union will provide 22 per cent of the total investment with the State contributing with a further 40 per cent. The rest of the upfront investment will be provided by private financial sources.

According to a study carried out by the Catholic University in Lisbon, the TGV would have a wealth-generating impact worth seven billion euros between 2005 and 2023. According to BPI bank financial analysts, the TGV will represent a welcome boost for Portugal’s recession-blighted construction industry, with monopoly construction firms Mota-Engil and Teixeira Duarte, cement firms Cimpor and Semapa as the frontrunners for contracts.

Mário Lino said that price tariffs for journeys between Madrid and Lisbon, which should take around two hours 45 minutes, had not been fixed, but a one-way ticket is likely to cost 100 euros. One-way tickets for the Lisbon-Porto stretch would likely cost 40 euros for a journey that should take an hour-and-a-quarter. There would also be a range of super-saver tickets, similar to those used on the Channel Tunnel rail link, for off-peak periods, families, the elderly, students and last minute travelling.

This year, the Portuguese railway network, Caminhos de Ferro Portugueses, registered record debts and near bankruptcy. But Mário Lino justified giving the green light to the TGV project by outlining the benefits it would bring to the Portuguese economy, namely in job creation.