The European DGComp considers that the terms of the deal are a state aid and this should lead the government to consider changing the agreement. It remains to be seen if DST accepts.
The government made a pre-notification to Brussels of Efacec’s sale to DST about a month ago, but there is still no reply allowing the formal notification to be delivered, and there is an explanation for this: The European Directorate-General for Competition, DGComp, considers that the terms of the operation are considered to be state aid, which will require the aid to be accounted for in the deficit, as happened for example with TAP.
Pre-notifications to Brussels are a recurrent method and aim to anticipate and correct possible problems associated with deals involving states, but as a general rule, this process is relatively quick and ensures that the formal notification is already aligned with EU requirements, namely in terms of competition.
But the Efacec case is taking longer than expected and according to a source with knowledge of the negotiating process between the Portuguese state and DGComp, there is an explanation: Brussels considers that Banco de Fomento’s financing to Efacec foreseen in the deal – €60 million in capital and €100 million in a 20-year financing line, with a rate of 1.5% and a grace period of seven years – is not made on market terms, and therefore is considered to be state aid.
The process, it is a fact, drags on. On July 2, 2020, the government nationalised over 71% of Efacec, on 24 February this year, the (new) government announced a sale agreement with DST, on 25 March the formal agreement between the state and the engineering company led by José Teixeira was signed and, finally, at the beginning of May, the government made a “pre-notification” of the operation to the European Directorate-General for Competition (DGComp), a condition precedent for carrying out the deal. In the ECO news, problems were already anticipated. “But negotiations with Brussels could go on for months yet before a formal authorisation is given”.
An official source at the Ministry of Finance, contacted by the ECO, refused to confirm or deny the information, but guaranteed that contacts between the government and European Competition regarding Efacec are continuing. Another, unofficial source told ECO that Parpública’s management, the company that has a 71% stake in Efacec, has already met with José Teixeira, the chairman of DST, to assess the possibility of changing the conditions of the deal. The government’s aim is to re-privatise the company but under market conditions, as required by Brussels, to avoid the state aid regime and the respective consequences. DST, contacted by ECO, also chose not to comment.