Mário Centeno was summoned to the Budget, Finance, and Public Administration Committee (COFAP) by CDS-PP to clarify details regarding the contract for the new central building of the Bank of Portugal (BdP) made with insurer Fidelidade. In July, reports surfaced that the deal includes “high-risk” contingencies that might result in the final cost exceeding 192 million euros.
“The final amount belongs to God,” stated Centeno, prompting CDS-PP deputy Paulo Núncio to inquire about the “total cost” of the operation.
“That cost does not exist today because the decisions that will lead to its establishment have not been made. Carpeting, furniture, and decoration are all decisions yet to be taken. One thing I assure you: they will be made with the same rigor I have explained here,” Centeno responded.
The governor distinguished two aspects of the project to clarify his use of the popular saying.
Centeno elucidated that the acquisition value of the building in Entrecampos, central Lisbon, stands at 192 million euros, and there is “no uncertainty” regarding the purchase cost itself.
The preliminary contract with Fidelidade includes several clauses that protect the bank’s position. “Resolving the red lines still affecting the project is the sole responsibility of the promoter, and there is no additional cost” from addressing these, he specified.
“Something different pertains to what has not yet been finalized,” indicating an additional cost for the building’s interior, Centeno explained regarding the uncertainty of the final amount.
Centeno assured, however, that the plan presented to the bank by the company responsible for this phase of the project “has maximum values,” which the governor indicated are known to Finance Minister Joaquim Miranda Sarmento.
The governor refused to disclose the amount, citing the need to preserve the bank’s negotiating position when making these decisions. Centeno reiterated this argument, previously made during a July 25 interview with RTP.
In COFAP today, he insisted that publicly disclosing the amount would “automatically” signal the market about the bank’s willingness to pay. “This is not about a lack of transparency,” he maintained.
Centeno emphasized that “there is no risk regarding the property acquisition value” as per the contract’s conditions.
From 13 risks identified in the technical assessments of the purchase operation (worth 192 million euros), “two [red lines] have been overcome, three are partly – practically – overcome and resolved, and all outstanding ones at the signing of the Preliminary Purchase and Sale Agreement (CPCV) were included” in the document to ensure that if unresolved, the BdP “exits the deal without any associated expense,” Centeno explained.
The current governor further stated that the move will result in operational savings. “BdP’s current situation is inefficient and incurs unbearable costs for the bank. It is inefficient because we are scattered. It incurs operational costs that, according to the bank’s internal estimates, are [five] million euros higher than the final solution would entail. And, in rent, we pay five million euros which we will cease to pay. Those are ten million euros in savings – I stress, savings – every year in this project’s operational savings,” he noted.
The BdP headquarters will remain in downtown Lisbon, Centeno confirmed. The Entrecampos building will house the 1,500 employees currently dispersed across various locations in the city.
