Court of Auditors points excessive gains in port concessions – Magazine Saturday

June 23, 2016 • Business

By Maria João Babo – Newspapers Business

the Court of Auditors (TdC) recommends to the port authorities which, under review and reassessment of the concession contracts, “consider the revision clauses that give excessive income to dealers in order to safeguard the public interest” .
in the audit report to the management, monitoring and supervision of public service contracts of port administrations, the TB advocates a review of the internal rates of return (IRR) shareholder “especially in cases that are more than 10%” .
As pointed out in 2013, the granting of the Multipurpose Terminal Zone 1 of the Administration of Setúbal and Sesimbra Ports (APSS) had an effective IRR of 38%, “percentage that is not acceptable in the light of the current economic situation and financial of the country, “said the court.
according to TB, other concession contracts that had high TIR shareholders” were the Leixões Container Terminal (LCT) which is 17% and the contract General Cargo terminal and Bulk Leixões (TCGL) which is situated at 12%. “
on this matter, the court also criticizes the control over the financial flows of the shareholders who contribute to the calculation of the IRR is not carried out systematically, stressing that in the case of Administration of Douro and Leixões Port “only does this control when there is a need to renegotiate a concession contract.”
TdC also notes that in the concession contracts analyzed “not benefit-sharing mechanisms have been established between grantors and concessionaires, except for the Alcântara Terminal contract.
recommended, therefore, to the port authorities that include benefit sharing arrangements with the grantors when concluding new concession contracts.
Considers that must still adopt formal risk management plans for each of the public service concession contracts, perform periodically an integrated performance evaluation of the concessionaires, and the risks and benefits of contracts and triggering the contractual mechanisms for penalizing dealers in the event of breach of the provisions of the concession agreements.
period of the concessions in
released audit report Thursday, TdC is still recommend the government to “consider the change of the legal framework in Portugal, regarding the duration of concessions in order to allow for future contracts for public service concessions in this sector may be concluded with reference periods in force in the legal systems of the main international competitor countries “.
the court points out that the legal framework in Portugal does not allow the conclusion of concession contracts with longer terms to 30 years, contrary to the legal framework in force Spain and the countries of northern Europe.
“This may limit competition in national ports, with regard to the international context that allows utilities provided with longer-term (50 or even 70 years) for the recovery of their . investment, “the report states
the court stressed that the change in Spanish law – which went from 35 to 50 and up to 75 years – recommended deadlines already in force, especially in the countries of northern Europe, where are the largest sea ports, such as Rotterdam, the Antwerp and Hamburg.
in his view, “the AP competitiveness should be measured in an international context, especially compared to other European ports”, having already one of the utility companies the port Authority requested the revision of the concession contract terms with “the basis of the unfavorable competitive conditions compared to other competing ports of the concession”.
in addition to a change to the legal framework to increase the deadlines port concessions, the court also urges the Government to unlock the legal obstacles to allow grantors port administrations undertake strengthening of human resources required to enable us to improve the efficiency of management systems, monitoring and supervision of concession contracts public.The of service audit covered 21 TdC concession agreements by the management of the port of Aveiro, Douro, Leixões and Viana do Castelo, Lisbon, Sines and Algarve and Setúbal and Sesimbra, and fieldwork was carried out between June and July 2015.

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