Portugal to decide on high-speed rail line next month

Portugal’s government will make a definitive decision in September on whether to suspend construction of a high-speed rail line linking Madrid and Lisbon, both countries said Wednesday.

The ambitious plan to link the capitals of Spain and Portugal by rail in less than three hours has already been postponed to 2013 from 2010.

Portugal’s conservative government announced on taking office in June that the project would be suspended due to austerity measures required under an EU-IMF bailout programme worth 78 billion euros.

It said that the project would “re-examined” with a view to an “eventual re-negotiation.”

Spanish Transport Minister Jose Blanco and Portugal’s Finance Minister Alvaro Santos Pereira, whose portfolio includes transport, discussed the issue in Madrid on Wednesday.

“In regard to the high-speed Madrid-Lisbon line, the Portuguese government intends to make a decision on this project at the end of September, once the economic-financial viability has been reviewed,” they said in a joint statement.

On the Portuguese side, the project has a budget of 3.3 billion euros ($4.7 billion).

Spain has a budget of 3.8 billion euros. Work on the Spanish side began in 2007 and is scheduled to finish in 2013.

Madrid has slashed its public works programmes as it seeks to cut public spending too but is nevertheless pressing on with its high-speed rail projects and now has the largest such network in Europe.