Recently the Portuguese government stated that a plan to build a network of high-speed rail lines had been cancelled, and that some of the European Union subsidies for this project were to be redirected into freight transport.
This plan has led to the government managing to secure funding for a high-speed link between Lisbon and Madrid. Initially the European Union had withdrawn funding for the high-speed link between the two capitals due to Portugal’s decision to cease work on the project.
Apparently the Finance Ministry in Portugal has now received funding for the project through the European Commission’s Connecting Europe Facility funding, and the government has managed to hold onto the European Union funding for the link while reducing the percentage of EU funding.
The previous agreement has now been nullified, and new funding for the project has increased from 25% to 40%. However the plan for a high-speed passenger link doesn’t look as if it will be revived, as the emphasis is now on rail freight. The government is looking to link Lisbon with the rest of Europe, and expects a rail line could reduce costs to exporters by 40%, and could increase the capacity by up to 80%. Whereas a passenger rail link would have cost €4.276 billion, the freight line is anticipated to cost just €700 million, and the government only needs to find €175 million due to European Union subsidies.
This is obviously good news for exporters, and Portugal’s trade deficit narrowed during the last quarter to €.58 billion compared to €3.12 billion a year earlier. Exports increased by 1%, while imports decreased by 3%.