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Lusa - Business News - Cabo Verde: Enquiry into TACV airline privatisation extended 90 days

Praia, Aug. 4,2022(Lusa)- Cabo Verde's parliament has approved a 90-day extension of the work of the parliamentary commission of enquiry (CPI) on the privatisation process of Cabo Verde Airlines (TACV), according to a resolution that came into force on Thursday.
In the draft resolution discussed in parliament during the second parliamentary session of July, which ended last Friday, it was claimed that the period granted to the CPI (180 days) proved to be "insufficient," thus calling for an extension of the initial deadline for another 90 days from 7 September.
The resolution that approved the extension of this commission of enquiry was published on Wednesday, to come into force the following day, according to the Official Bulletin consulted by Lusa.
This CPI was requested in February this year by the African Party for the Independence of Cabo Verde (PAICV, opposition since 2016), which, in the meantime, accused the government of not providing documents needed for the work of the commission, which led several times to exchanges of accusations in parliament with MPs from the ruling Movement for Democracy (MpD).
Since it began its functions, the deputies of this CPI have already heard several former managers of TACV, as well as the current president of the board of directors, Sara Pires.
During this period, in parallel, the company was temporarily prevented from flying to Europe, for not having renewed a certificate, and saw the government announce an out-of-court settlement with the Icelanders of Icelandair, who led TACV between March 2019 and July 2021, due to the process involving its renationalisation.
Also during the term of this CPI, TACV reached an agreement with Angola's TAAG to lease a Boeing 737-700, with which it is already flying to Portugal and saw, in July, the International Monetary Fund (IMF) estimate that the company will need 30 million euros from the state until 2023.
According to information provided last February by the speaker of parliament, Austelino Correia, this CPI was able to move forward after the Attorney General's Office confirmed that its purpose "does not conflict" with possible matters under investigation.
According to the content of the resolution that constituted it - of mandatory content - this CPI also aims to analyse the winding up of TACV's operation of domestic flights, which since November 2016 have been ensured only by a single private airline.
In March 2019, the state sold 51% of TACV for €1.3 million to Lofleidir Cabo Verde, a company 70% owned by Loftleidir Icelandic EHF (Icelandair group, which took 36% of Cabo Verde Airlines - the company's trading name) and 30% by Icelandic entrepreneurs with experience in the aviation sector (who took the remaining 15% of the privatised 51% share).
Meanwhile, following the paralysis of the company during the Covid-19 pandemic, the state took over the 51% position in TACV on July 6, 2021, alleging various management defaults, and immediately dissolved the corporate bodies.
On 26 November, Loftleidir Cabo Verde announced it had started arbitration proceedings against the state alleging "violation of the agreements concluded between the parties," in light of the renationalisation of flagship airline TACV.
Among several arguments, the PAICV deputies who signed the creation of this CPI pointed to "evidence" that the private Icelandic group "unduly benefited from resources of the state of Cabo Verde," and classify this privatisation as a "leonine deal".
"In fact, the state, despite not having received a single penny for the TACV/CVA privatisation deal, provides at least four guarantees to CVA, estimated at over seven million euros, indirect injection of public capital that never stabilised the company financially," they read.
Among several questions raised in the application, the PAICV wants to know with this CPI, which will have 180 days of functions after its inception, "what was the cost resulting from the renationalisation of TACV," last July, after the impact of the pandemic on air links, and asks for several documents and reports.
"There are indications that the government acted contrary to the defence of national public interests," points out the initial request, presented by the PAICV deputies.
TACV suspended commercial flights in March 2020, due to restrictions on flights to contain the Covid19 pandemic and only resumed operations, now back in the hands of the state, last December, after a stoppage of 21 months, with connections between Praia and Lisbon, extended this year from the Portuguese capital also to the islands of Sal and Sao Vicente.
Prime minister, Ulisses Correia e Silva, meanwhile announced that the company would have another aircraft in service, to boost international flights, although without giving any dates.

Agency : LUSA

Date : 2022-08-05 09:46:00


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