TGV Competition to go ahead despite trade war

The escalating global trade war sparked by the US government’s imposition of tariffs will not effect the current government’s plans to launch a new competition for the Porto-Lisbon TGV high-speed rail link and its first stretch between Oiã and Soure after the first competition fell through.

According to the business daily Negócios, the Minister of Infrastructures and Housing, Miguel Pinto Luz guaranteed that for now there would be no change of plan because of the current economic context and that the intention remained to launch a fresh competition with a model that would attract the interest of more companies.

The minister said that the starting price set for the stretch would be €1.6Bn and that would be maintained and that changes would be made depending on the volume of work to be undertaken.

And the fact that the current government is in a caretaking situation until the May 18 elections will not prove an obstacle to the new competition according to public contract specialists contacted by Negócios because it was a decision that had already been made before the current government had taken office and had the general agreement of the other political parties.

However, the same sources have raised concerns about the current international context and the escalating trade war and the impact that it could have on price increases or causing an economic slowdown, which would impact construction suppliers and financiers.

For example, the price and supply of steel, a relevant raw material for rail projects, which for a competition where the base price has been set could determine requests to change the financial contract in the future.

Despite this and other concerns, the consortium Lusolav, led by Mota-Engil, and which includes another five Portuguese construction companies, says that it will once again submit a proposal for the competition for the project which is a Public-Private Partnership.