Portuguese public procurement law structurally allows contractors to add costs to contracts after signing, through mechanisms such as the supplementary works provided for in the Public Contracts Code. When incompatibilities arise between the project and the actual conditions of the work, the municipality must quickly decide between accepting the technical justification, challenging it with its own assessment, or triggering arbitration — all options with costs, timelines and risks of litigation. Even trivial situations, such as rainfall above the average predicted, give the contractor automatic entitlement to financial compensation or deadline extension.
The value with which any public project starts is already outdated, because between setting the base price and the start of work, a legal calendar unfolds that includes possible pre-contractual litigation with automatic suspensive effect and prior scrutiny by the Court of Auditors, with a tacit approval deadline of up to thirty days. Data from the BASE Portal and IMPIC show that, across all public works in the Lisbon Metropolitan Area, there is an aggregate financial deviation of 6.44% between the contracted value and the final executed value.
Applying this rate to the affordable housing programme announced by the Government, two financial consequences emerge. The announced 1.851 billion euros could generate approximately 119.2 million euros in potential additional cost. Furthermore, a substantial portion of the financing — 1.34 billion euros — comes from a credit line from the European Investment Bank, representing debt with a repayment schedule spanning decades, potentially generating approximately 86.3 million euros in additional indebtedness supported by future budgets.
The article warns that it is not a planning error or lack of political will that is at stake, but the same legal architecture applied to thousands of public works contracts. The real debate that remains to be had, according to the author, is not how many houses the programme promises, but what portion of the final bill is already known in advance will not be fulfilled, and who will be called upon to pay that difference when no one will remember the original promises.
