Portugal’s President Vetoes TAP Privatization Law Over Transparency Concerns

Portugal’s President, Marcelo Rebelo de Sousa, has exercised his veto power, stalling the pending semi-privatization of TAP Air Portugal. In a letter to Prime Minister António Costa, the President expressed concerns about the lack of transparency in the privatization process, prompting him to request urgent clarification on three key issues.

The President’s primary concerns include the state’s future oversight of a strategically vital company like TAP, especially if more than 51% of the company’s control is involved in the sale. He emphasized the absence of specific provisions in the decree outlining the state’s role in subsequent administrative decisions. Additionally, Rebelo de Sousa raised alarms about the broad powers granted to TAP to sell or acquire assets even before the sale, exceeding the planned integration of Portugália Airlines into TAP SA.

A critical point of contention revolves around the perceived lack of transparency in the pre-specification phase, particularly regarding contacts with potential bidders. The President insisted that these interactions should be clearly documented to avoid any ambiguity about their nature and non-binding status in future discussions on transparency and bidder selection.

In response to the President’s move, Prime Minister António Costa acknowledged the concerns, assuring that they would be “duly considered.” The President urged swift clarification, emphasizing that these crucial questions could be addressed without impeding the urgency of the privatization process.

The privatization of TAP Air Portugal has reportedly drawn interest from major international players, including Lufthansa Group, Air France-KLM, and IAG International Airlines Group. However, none of these potential bidders have commented on the situation. The fate of TAP’s privatization now hangs in the balance as the government works to address the President’s transparency concerns and move the process forward.