"CAE continue in force was not a viable option for the State" – The Economic Journal

"CAE continue in force was not a viable option for the State" - The Economic Journal


Rui Cartaxo, who was an adviser to Economy Minister Manuel Pinho, defended today the option of assessing Caixa BI and Crédit Suisse to extend the concession of the dams to EDP, considering that they are "bulletproof".

"I wanted to have two autonomous opinions, because I had before me valuations of EDP and REN that were in the antipodes. I admit that if there was a certain proximity there was a spell in the grammar and forgot the independent assessments, but that was not the situation, "said Rui Cartaxo, referring to the difference in values ​​proposed by the two companies for the extension of the water domain.

Hearing the parliamentary committee to investigate excessive revenues from electricity producers, Rui Cartaxo explained the executive's option, since "to have two independent assessments [Caixa BI e do Crédit Suisse] is bulletproof. "

"It's what's done all over the world, and it's delivered to two entities that only do that – energy asset valuation or others. My tendency was for that, because the legal framework pointed to it, "he added.

In addition, he countered, "REN is not a financial appraisal company."

Rui Cartaxo also said that the extension of the water domain concession took into account estimates of how much EDP would earn with the respective exploration, a figure that the electricity company had to pay to the State.

The REN Maria de Lurdes Baía technique – which was part of the EDP / REN work team for the termination of energy acquisition contracts (CAE) – considered that "in the extension of the water an underestimation of values, at least 400 million euros, "referring to the extension of the concession contracts for the dams to EDP, which cost electricity 704 million euros, below that proposed by REN and above that calculated by EDP.

Rui Cartaxo, who in 2010 was to assume the executive presidency of REN, admitted that "there might be an alternative [à concessão do domínio hídrico à EDP], but there was a political option, which comes from 95, was reiterated in 2003 and 2004 and then there is the agreed position of REN with EDP and there it became explicit, written in black and white, that the PPAs only fall if the subcession is delivered to EDP ".

"The PPAs remained in force was not a viable option for the State, as it failed to comply with the European directive. The state was a bit fragile, "he added.

In response to the deputies, Rui Cartaxo assured that "the whole team of the [da Economia] had access to these four evaluations and the decision of which of the evaluations is a political decision, of the Government, on the initiative of the ministry. It came to be taken by a joint dispatch from the Ministry of Economy and Environment. "

Asked about the existence of excessive rents in electricity, Rui Cartaxo argued that "the weight of light from renewable energy support is much more relevant and meaningful than any excess revenues associated with PPAs or the transition from PPAs to CEMCs."

"But I can not guarantee, together, that the PPAs and the CMECs have been financially equivalent," he concluded.

Already for EDP, it defended that the company not only was not benefited by the contract of maintenance of contractual equilibrium (CMEC) but also, by the way, was impaired. "EDP lost and lost a lot", more precisely 385 million euros, said Rui Cartaxo at the hearing.

Extension of the concession of EDP dams implicit in the law since 1995

The former president of REN Rui Cartaxo today considered that the extension of EDP's dams concessions "was always implicitly envisaged in the energy legislation" since 1995, and was expressly enshrined in the agreements to terminate the PPAs.

Rui Cartaxo, who was heard in parliamentary committee to investigate the payment of excessive rents of energy, focused his initial intervention on the extension of the concessions of the dams to EDP, a subject in which he assumed to have had direct involvement in the final phase of his period as an adviser the then Minister of Economy Manuel Pinho.

"The extension of the production licenses for EDP hydro plants, beyond the expiry of the PPAs, has always been implicitly envisaged in energy legislation since 1995," he summarized.

In the opinion of the former president of REN, "the agreements to terminate the PPAs went further and explicitly stated that the termination of those contracts would only take place if EDP were to sub-concession the rights to operate the plants until the end of the life of the dams ".

"EDP's right to extend dam concessions without the need for a public tender was explicitly set out in the agreements to terminate the PPAs [contratos de aquisição de energia] concluded on January 27, 2005 between EDP and REN, and ratified by the February 09, 2005 dispatch of the Secretary of State for Energy,

These agreements to terminate the PPAs, Rui Cartaxo continued, "recognized EDP the right to exploit hydroelectric power plants until the end of the useful life of dams", which is a suspensive clause.



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