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High speed line in limbo as Portugal axes project promoter

Portugal’s High Speed Rail company is being disbanded leaving construction of the 176km line between Poceirão in Portugal and Caia in Spain in limbo.

The public private partnership for the project reached financial close last year and construction is due to begin later this year.

A source at Rede Ferroviária de alta Velocidade (Rave) told NCE this week that employees were being relocated and their jobs would be moved into parent company and national rail infrastructure body Rede Ferroviária Nacional (Refer).

The future of the Poceirão to Caia PPP project is uncertain as Portugal grapples with its continuing sovereign debt crisis.

The project is being developed by Elos, a joint venture led by two Portuguese companies - toll road operator Brisa, and construction company Soares da Costa.

Brisa declined to comment and Elos and Refer failed to return calls.

Poceirão to Caia was part of a larger programme of six projects to connect Lisbon to Madrid. The other five projects have all been cancelled in recent months.

The project involves building 176km of double-track, high speed rail line between Poceirão, 40km east of Lisbon, and Caia on the Portuguese/Spanish border, and was already on a tight timeline. It was due to come into operation by 2013. The future of the project also rests heavily on political implications within Portugal.

Last week, Portugal’s former prime minister José Socrates said he still supported the project although pressure has been mounting to cancel it ahead of 5 June elections.

KPMG global head of high speed rail Daniel Loschacoff, who acted as financial advisor to Rave, said it was always intended to integrate Rave back into Refer. But he was surprised that this was already happening.

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