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Public Works Minister Speech

Intervention Minister of Public Works at the Business Opportunities in Latin America Forum Mr President of the Order of Engineers Mr President of the Institute for the Development of Latin America Madam Secretary General of the Euro-América Foundation Dear participants in the Forum Ladies and Gentlemen It is for me It is always a great and renewed pleasure to participate in initiatives of the Order of Engineers, as my professional Order knows, as they are initiatives marked by the high sense of timeliness of the topics put up for discussion, as well as by the high quality of the speakers and participants, thus contributing , decisively, for the informed clarification of topics of great importance for the profession and for the country. This time, the Order of Engineers, together with the Institute for the Promotion and Development of Latin America, proposes to debate the opportunities for business and investment in the Construction sector, in Latin America, and it is my responsibility to intervene on the opportunities that those markets could provide for Portuguese companies in the construction sector and on the impact of large public investments on the economy. I would like to start by highlighting that, as everyone knows, the world economy has been moving along a recessive path in recent months, as a result of what is the first global economic and financial crisis on record. The Portuguese Government, aware of the strong negative impact that this crisis has on the Portuguese economy, companies, employment and families, has been developing and applying, in a courageous, consistent and determined manner, a set of credible and effective measures with with a view to minimizing this negative impact and relaunching the next cycle of economic growth. The Investment and Employment Initiative, presented following the Extraordinary Council of Ministers of December 13, 2008, appears as a convergent plan with the decisions taken at European level within the scope of combating the current crisis, and was evaluated by the main international agencies as balanced, realistic and very positive. Among the measures recommended by this Initiative, I highlight, as it is my direct responsibility, the package of investments in New Generation Networks, in the range of 800 to 1000 Million Euros, between public and private efforts, whose execution protocol with the participating operators was closed in January this year. And I highlight this initiative, today and here, because its virtues are, a priori, easier to understand by fellow engineers than by ordinary citizens. In fact, New Generation Networks represent an endless potential for the development of products and services with extremely high added value, both economic and social, with a particularly immediate impact on activities closest to Engineering and technological development. In this sense, I believe that this is an investment with rapid and lasting repercussions on the real economy, a conviction shared by all telecommunications operators, worldwide, with whom I had, just last week, the opportunity to exchange views at the IV Forum World Telecommunications Policy Conference, promoted by the International Telecommunications Union (ITU) and held in Lisbon, with the collaboration of the Portuguese Government, through my Ministry. With regard to Public Works, the Government, in addition to the projects it already had underway or in preparation, in accordance with its Program approved by the Assembly of the Republic in March 2005, decided to launch another set of investments to reinforce the combating the global economic and financial crisis, essentially in the field of requalification and modernization of the school system, the promotion of renewable energy, energy efficiency and energy transport networks. Some politicians, analysts and commentators have questioned the opportunity and even the need for some investments that the Government has in progress, such as the New Lisbon Airport, the High Speed Rail Network or the Road Concessions. Still in the last Commemorative Session of the 25th of April, held in AR, the leader of the PSD bench once again spoke out against these investments, which he classified as megalomaniacal, although all of them had previously been approved by that party. That is, more than the opportunity, what is at stake is the strategic vision we have for the country and its future development. As you know, the Government considers the continuation of these investments to be of the utmost importance. All of them have been subject to a process of improvement and optimization of their respective projects and to cost/benefit analyzes that, clearly, prove significant advantages for our economy and our national cohesion. This is, in fact, also the vision of the European Commission, which recently reinforced, by 500 Million Euros, the significant support it had previously made available to investments to be made by EU countries within the scope of the Trans-European Transport Networks, where they fit, precisely , the New Lisbon Airport, the High Speed Rail Network and several roads included in the Road Concessions Program, I reiterate the highly positive nature of these investments within the framework of economic recovery measures. Public investment appears, today more than ever, to be absolutely decisive in combating the global economic and financial crisis, with all the major economies in the world, with the United States at its head, are developing vast programs in the field of works public and construction, as a privileged way of combating the crisis. What is at stake, therefore, is facing the crisis, promoting economic and business activity and combating unemployment and, simultaneously, maintaining the strategic path of modernization, qualification and increasing the country’s competitiveness so that, when the crisis is overcome, we are in the best possible conditions to continue our development. This is, in our view, the first condition for us to be able to take advantage of business opportunities in international markets: if Portuguese companies are not able to develop their activity in the country and if the country does not have a modern, efficient and competitive economy and companies , and as such internationally recognized, are very unlikely to be successful in international markets. It follows that another necessary condition for Portuguese companies to take advantage of business opportunities in international markets has to do with their size, structure, organization and interconnection, with the qualification and creativity of their staff and workers, with the efficiency, sophistication and competitiveness of its work methods and processes. This is an objective that is fundamentally up to companies to pursue, but for which the Government also has a relevant role to play. There are certainly many actions to be taken by the Government in this matter, but, due to a clear lack of time for this purpose, this is not the time to address them. Allow me, however, to highlight two actions initiated by my Ministry and in which we count on the excellent collaboration of the Order of Engineers: the drafting of the Public Contracts Code (CCP) and the revision of Decree no. 73/73, of 28 February, actions that are part of the modernization of our legislative building with a view to dignifying and honoring professionals and companies, instilling confidence in economic agents and encouraging entrepreneurship and business initiative. In reality, only with more qualified and ethically responsible companies and technicians will we have more competitive companies and better quality works, and a greater probability of success in international markets. The CCP, approved last year and already in force, is, without a doubt, a fundamental instrument for the Administration, for companies, for citizens and for national engineering, which responds to the demands for simplification, transparency and modernization demanded by operators of the market, ensuring a more competitive environment, as well as reducing administrative and hiring costs. This legal diploma is complemented by other legislative initiatives that encourage a chain of responsibilities and that are reflected in the private sector itself, with a view to creating a legal framework for the construction sector adapted to new demands, particularly international ones, in the areas of environmental sustainability , energetic and social. It is in this context that, due to its importance, the review of the much talked about Decree no. 73/73, of February 28th. After many years of attempts to change it, without success, we have now managed, in this legislature, to present in the AR a concrete proposal to review this diploma, which brings together the consensus of all the actors involved in its application, including the Order of Engineers, and which will certainly be in force in the very short term. Another necessary condition for Portuguese companies to be able to take advantage of business opportunities in international markets has to do with the Government pursuing an adequate economic diplomacy policy. There will also be many issues to consider in this matter, among which I would like to highlight the permanent action that the Government and, in particular, my Ministry, has been developing in order to create a good political relationship with the governments of the countries that we consider most relevant for the internationalization of Portuguese companies, the carrying out of many missions involving members of the Government accompanied by business delegations to these countries and the dissemination and affirmation of Portuguese skills on an international level. The holding in Portugal, last week, of the IV World Telecommunications Policy Forum, promoted by the International Telecommunications Union (ITU), and to which I have already referred, is part of this line of Government action. I remind you that this IV Forum, at the proposal of Portugal, was held, for the first time, outside Genève, where the ITU is headquartered, and was attended by around 900 delegates, including many ministers and other members of government, industry representatives and regulators from more than 120 countries, particularly Latin America. The Forum was crowned with great success, as recognized by the Secretary General of the ITU and all delegations, having recorded a great national and international repercussion in the telecommunications sector and thus constituting a high point for the prestige of our country and for the affirmation of Portuguese skills and engineering at the international level. In short, in addition to the significant efforts that the Government has made on the ground to support the national economy in this phase of very difficult global crisis, we have also maintained, with regard to to the internationalization of Portuguese companies, the strategic direction defined, supporting the efforts and actions that these companies have rightly been developing in this field. And we support these internationalization movements because we know the importance that the results of these processes can have on the survival and development of these companies, especially when internal activity is very negatively conditioned, as is the present case. Intervening in foreign markets implies, among other important actions, the search for economic spaces where medium and long-term dynamics guarantee a return on investment made and remuneration for the risk incurred. This means that, to the traditional markets that Portuguese companies have become accustomed to looking at, namely Western Europe and Portuguese-speaking countries and regions or strong communities of Portuguese and Portuguese descendants, businesspeople and entrepreneurs must join other economic spaces where opportunities clearly justify the entry difficulties. This includes several of the current emerging economies, in Eastern Europe, Africa, Asia and, of course, Latin America. Currently, there are around 20 Portuguese construction and public works companies operating in Latin America, and the countries where the presence of our companies in this sector is currently most significant are Brazil, Venezuela, Argentina, Costa Rica and The turkey. The activities of our companies are already very diverse, covering ports, highways, railways and housing construction. However, a careful analysis of the potential of these countries reveals that many opportunities remain to be explored, in terms of construction, on this continent and that, therefore, there is a well-founded interest in looking very closely at this area of the globe. In addition to companies, the National Civil Engineering Laboratory has also been developing, since the 1960s, significant internationalization activity in Portuguese civil engineering in Latin America, having carried out studies, projects, inspections and other technical interventions in the following 10 countries on that continent: Argentina, Brazil, Colombia, Costa Rica, Guatemala, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela. This LNEC experience, consolidated, recognized and systematically searched by those countries, can and should leverage the efforts of national companies seeking to establish themselves in these markets. In fact, over the last few years, several Latin American countries have consistently presented very interesting and appealing economic dynamics, especially in the infrastructure sector. One of the most emblematic examples of the Government’s action in this evolution, where several Portuguese companies in this sector have already signed significant contracts, is Venezuela, a country in which Portuguese emigration is very strong. The Portuguese Government committed itself to this case at the highest level, as in all economic diplomacy activities capable of generating a positive impact on the national economy, and continues to follow this process very closely. Thus, important and voluminous contracts were signed in the area of civil construction and public works, of which I would highlight, due to their size, the execution of contracts for the construction of 50 thousand social housing in that country, the modernization of the Port of La Guaira and the construction of the “Dos Bocas” project, consisting of a dam and a diversion tunnel. The area of Portuguese computer engineering was also included in this package through the Magalhães project, which, betting on the dissemination of access to the knowledge society among the country’s youngest generations, through the commonality of access to broadband internet, is already one of the most relevant info-inclusion case studies on a global scale. In relation to Brazil, the most significant Latin American market for Portuguese companies, and the largest on that continent in terms of size, the Government has cherished a privileged historical relationship, sparing no effort to explore any opportunity to deepen existing relations. I would like to remind you, by way of example only, that at the Luso-Brazilian Summit in São Salvador da Bahia, in October 2008, a memorandum of understanding was signed between the Portuguese company CASAIS and the Brazilian company EGESA, with a view to joint participation in concession competitions. of highways in Latin America. It seems to me that this route, establishing partnerships and consortia between companies from countries with such cultural affinities and identical strategic ambitions, is already a proven internationalization formula for several Portuguese companies in the construction sector. Public companies are also, obviously, the object of Government support with a view to their internationalization. Very recently, and just to give an example, my Ministry carried out a mission to Brazil and Argentina, headed by the Secretary of State for Transport and which included representatives from the Administrations of the Ports of Leixões, Aveiro, Lisbon, Setúbal and Sines, from CP, EMEF and Metro de Lisboa with a view to, among other objectives, the promotion and development of agreements and partnerships between these companies in those Latin American countries. All participants in this Forum certainly had the opportunity to listen, throughout this morning, to presentations of the various investment plans of 10 countries in this part of the world. I am specifically referring to Argentina, Mexico, Panama, Cuba, Uruguay, Chile, Brazil, the Dominican Republic, Paraguay and El Salvador. As Latin America is one of the areas in the world that is expected to suffer the least reduction in economic growth in the current economic cycle, with many of these countries not even expecting to fall into recession, it is certainly a route of internationalization to be considered for many of the national companies in the country. construction sector that are, at this stage, having difficulties expanding in their traditional markets. On the other hand, our clear cultural affinities with these countries, and the deep historical ties that unite us with these people, make Latin America a natural market for any Portuguese company looking for new spaces for competitive affirmation. Furthermore, the weight that Latin American countries represent in the turnover of Portuguese companies in the construction sector abroad has been decreasing, with a drop, in real terms, of 14.5% in the last 5 years, which suggests less attention to these markets to the detriment of other opportunities that may currently be outdated. Dear fellow engineers, the Government supports and will support, in a decisive and unequivocal way, all companies in the construction sector that find in Latin America, a market with potential for the geographic diversification of their activities. And, as always, we count on the contribution of the Order of Engineers, which will certainly continue to rise to the new challenges that lie ahead in this field. We responded to the difficulties of the global crisis with enthusiasm, energy and commitment, also counting on everyone’s commitment. To conclude, I wish everyone present a good continuation of the work of this Forum, awaiting, with great interest and attention, the respective conclusions, which I am very grateful for. Thank you for your attention.