The pending semi-privatisation of TAP Air Portugal (TP, Lisbon) has hit a glitch with Portugal's President Marcelo Rebelo de Sousa having vetoed the required decree, citing concerns about a lack of transparency in the process, which he wants the government to address forthwith.

In an October 27 letter to Prime Minister António Costa, Rebelo de Sousa requested prompt clarification on three questions in particular and returned the law approving the privatisation process to the government without promulgation, according to a statement on the President's website. He said responses received from the government by October 26 had been unsatisfactory.

In a brief response, the Prime Minister noted the President's concerns, adding they would be"duly considered".

The three points of concern raised by Rebelo de Sousa are:

  • The state's future ability to monitor and intervene in a strategic company like TAP, particularly if the sale involves more than 51% of the company's control, as there are no special provisions made in the decree for the state's role in subsequent administrative decisions;
  • The decree allows TAP to sell or acquire any type of assets even before the sale without setting minimum criteria, which goes "far beyond" the planned integration of Portugália Airlines (NI, Lisbon) into TAP SA; and
  • Lack of transparency concerning contacts with proposed bidders in the pre-specification phase and rules that guide the selection of a potential buyer. Rebelo de Sousa wants it to be clear that these contacts were not binding negotiations and to be recorded as such should the issue of transparency of the selection and the choice of bidder be raised in future.

"These three specific but crucial questions can be clarified without too much delay, that is, without prejudice to the urgency of the process. Therefore, I raise them on the day immediately following the government's clarifications and long before the end of the constitutional deadline for promulgation," he said.

TAP's privatisation reportedly has attracted interest from Lufthansa Group, Air France-KLM, and IAG International Airlines Group, although none have been prepared to comment.