Former TAP director Diogo Lacerda Machado defended today in parliament that TAP should be privatised quickly, with the State maintaining a strategic position of 50%, but a “market-oriented” management.
“What I think in all honesty is that TAP should be privatized and quickly,” said the lawyer, who was heard today in the parliamentary committee on Economy, Public Works and Housing, at the request of IL, as part of the conclusions of the General Inspectorate of Finance (IGF) on the purchase of the maintenance and engineering business in Brazil (VEM/ME Brasil), 20 years ago.
For Diogo Lacerda Machado, who helped the State recover 50% of TAP’s capital after the privatisation carried out by the PSD/CDS-PP government led by Pedro Passos Coelho, “TAP’s management should be private, and market-oriented.”
Asked about the purchase of ME Brasil, which the deputies of IL, PSD and Chega classified as ruinous, Lacerda Machado argued that it was that investment that made TAP a multinational and with which it currently has “an absolutely abnormal market share in traffic between Brazil and Europe,” which justifies the interest of the large European aviation groups in the purchase of the Portuguese company.
For the lawyer, the “worst deal ever made” was the “privatisation of the monopoly of the country’s airport infrastructures” in a 50-year concession to ANA/VINCI.
Regarding the privatisation of the airline carried out by the Passos Coelho Government, Lacerda Machado said that, when he sat down with the Atlantic Gateway consortium, of David Neeleman and Humberto Pedrosa, to negotiate the reconfiguration of the shareholder structure and explained to them the “enormous weaknesses of that privatisation process,” he was told “that the Government knew everything to the millimetre.”
Regarding the IGF report, with which he said he disagreed, Lacerda Machado stressed that his involvement in the purchase of VEM was “essentially as a lawyer,” while the strategic conduct of everything was the management of TAP, then led by Fernando Pinto, who will be heard in parliament on Wednesday.
In a hearing in May 2023, in parliament, Diogo Lacerda Machado stated that there is an “imbecile perspective” on the maintenance business in Brazil, and underlined that without the investment in that country “probably” today the company would not exist, arguing that this “was by far the best investment that TAP has made in 50 years.”
The audit of TAP’s accounts by the General Inspectorate of Finance (IGF), released in September, criticises the participation in the maintenance business in Brazil, stating that economic rationality has not been demonstrated and that “very significant losses” are expected.
“The economic rationality of the decision of the management of TAP, SGPS, to participate in the VEM/TAP ME Brasil business and, subsequently, not to accept a proposal from GEOCAPITAL, of 23/01/2007, to renegotiate the partnership in order, namely, to share risks and burdens, has not been demonstrated, having, instead, opted to strengthen its position in VEM, without guidance from the guardianships or the shareholder Parpública in this regard, becoming the sole shareholder of Reaching Force and holding 90% of the capital of VEM,” reads the document.
According to the report:
“Very significant losses are expected with that deal due to the non-recoverability of the amounts involved, which, by 2023, amounted to 906 million euros.”
In an interview with Lusa in January 2022, TAP’s then-chief executive, Christine Ourmières-Widener, announced that, after failed sale attempts, the group had decided to gradually close the operations of Manutenção e Engenharia Brasil (TAP ME), as part of the restructuring plan approved by the European Commission the previous month, which required the separation of non-core assets, namely the maintenance business in Brazil, and the catering business (Cateringpor) and handling (Groundforce).
Samantha Gannon
info at madeira-weekly.com
