By: ELOISE WALTON
BUSINESSES ACROSS the Algarve are owed millions of euros because a severe cash crisis at regional câmaras means they cannot pay their suppliers.
The sums owed vary greatly but one leading security and communications company, Prosecom, has told The Resident that it is owed in excess of one million euros.
In a letter to the company, Sr. José Apolinário, President of the Câmara Municipal de Faro, said that since last year, the authority had put a brake on spending by cutting investments and controlling personnel and operational expenses, resulting in a slight fall in the debt.
However, he admitted that between 2001 and 2005, the Câmara’s short term debt rose from 9.3 million euros to 16.4 million euros, long term debt rose from 14.4 million euros to 36.8 million euros and debts related to planning and investment rose from 36 million euros to a staggering 44 million euros.
Due to the halt on spending, he said, many creditors and suppliers have directly suffered as the Câmara is not paying its bills.
“The finances are assigned to specific projects, such as the athletics course or the Santa Bârbara de Nexe railway, and cannot be used to pay wages or suppliers. To do so would be illegal and a violation of the budgetary regulations,” he said.
The Executivo Municipal, the municipal executive, will remain committed to the gradual resolution of the debt problem, he said, adding: “This will only be possible with more funds from the sale of state property and new capital investment for specific projects. “But these are lengthy processes in the face of the severity of many of our expenses.”
Foreign investment
A spokesman for Prosecom told The Resident that they are proud of the benefits their company brings to the local economy, including the fact that the majority of the company’s 400 employees are Portuguese.
“Why would we invest more money in the Algarve if the local government can’t pay its bills?” he said, adding: “I think this will put other foreign investors off the area too. How will they convince potential investors this won’t happen to them?”
The Resident asked António Pina, the new president for the Região de Turismo do Algarve (RTA), the Algarve tourism board, Faro’s new Civil Governor Isilda Gomes and the President of Turismo de Portugal, Portugal’s tourism board, to comment on this matter. At the time of going to press, no-one was available for comment.
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