Minister overseeing TAP's privatisation embroiled in growing scandal

PM Montenegro has already said that he maintains confidence in the Minister of Infrastructure and Housing.

Miguel Pinto Luz, Minister of Infrastructure and Housing

Just its reprivatisation gets underway, TAP is again at the centre of a major political thunderstorm.

A General Inspectorate of Finances (IGF) probe into TAP’s 2015 privatisation concluded that the purchase of a 61% stake in the airline by the Atlantic Gateway consortium was financed with a 226 million dollar loan from Airbus in exchange for a much more expensive deal for the purchase of 53 new Airbus planes (reportedly worth 444 million dollars).

In other words, the IGF establishes that TAP was bought with a guarantee from TAP itself.

The IGF probe details a system created to circumvent the Commercial Companies Code, which prevents a company from granting loans or funds to a third party in order for them to buy shares in it.

Worse: the audit concludes that the then Government, led by Social Democrat (PSD) PM Pedro Passos Coelho, knew about the terms of the deal a month in advance.

The story is political dinamite as the two members of Government that oversaw the deal - the then Finance Minister and Secretary of State for the Infrastructure, Transport and Communications - are now key allies of PM Luís Montenegro.

Only last week, the Government nominated the then Finance Minister, Maria Luís Albuquerque, as Portugal’s next European Commissioner. To get the job, she still needs to be pass through the European Parliament and this story is likely to come up in the hearings (and perhaps hurt her chances of taking a major role in the Ursula von der Leyen’s second team).

More problematically, the then Secretary of State for Infrastructure, Transport and Communications, Miguel Pinto Luz, is now the Minister for Infrastructure and Housing with sectoral responsibility over TAP - meaning that he is again responsible for overseeing TAP’s reprivatisation (this is because, in July 2020, the António Costa-led Government negotiated the acquisition of a controlling stake in the airline, raising its ownership to 72.5%. This effectively reversed the partial privatization of 2015 and marked the renationalization of TAP).

Yesterday, the Attorney General's Office (PGR) confirmed that it received the report from the General Inspectorate of Finance (IGF) audit on the privatisation of TAP in 2015 and sent the document to the Central Department of Investigation and Criminal Action (DCIAP).

Opposition reaction

As expected, the main opposition parties slammed both Maria Luís Albuquerque and Miguel Pinto Luz for their role in the privatisation, demanding more explanations from the Government.

The Socialist Party (PS) challenged the Prime Minister to say whether Miguel Pinto Luz is in a position to continue managing the airline's reprivatisation process, while the Left Bloc (BE) called the Minister for Infrastructure the ‘biggest toxic asset the government has’.

The various parliamentary parties want to hear from Maria Luís Albuquerque, Finance Minister in 2015, Miguel Pinto Luz, Sérgio Monteiro (Secretary of State for Infrastructure before Pinto Luz) and the then chairman of Parpública, Pedro Ferreira Pinto.

PM’s reaction

Despite the conclusions of the General Inspection of Finance (IGF) audit into the TAP privatisation process (in 2015) and the harsh criticism from the opposition, the PM Luís Montenegro has already said that he still has confidence in his Minister for Infrastructure and Housing and VP of the Social Democratic Party (PSD).

Speaking to journalists on arrival at a meeting with PSD activists, Montenegro made a point of emphasising that he hopes to arrive in 2028, the last year of this legislature, with all the “members of the government on board”.

Faced with the media's insistence, the Social Democrat guaranteed that the minister's position is not in question. “Miguel Pinto Luz is strengthened by the excellent work he has done,” the PM said.

A story that will surely come come up in PORTUGAL DECODED in weeks to come.