Portugal’s Towns Face Delay Dilemma: Faster Contracts vs. Stricter Audits

The clash between the country’s supreme financial watchdog and the executive has reached a new pitch. At the heart of the dispute lies a single question that matters to every taxpayer: is rigorous scrutiny slowing the flow of public money, or is sloppy paperwork the real culprit? The answer will determine how quickly town-hall renovations, metro extensions and PRR-funded housing blocks break ground over the next two years.

Why the argument refuses to die

In almost every council chamber the phrase “atraso no visto do Tribunal de Contas” has become shorthand for stalled tenders. The Government says Portugal’s system of compulsory prior approval is unique in Europe and increasingly unsustainable when Brussels demands strict timetables for Recovery-and-Resilience cash. The Tribunal counters that it signs off contracts in an average of 12 working days, well inside the 30-day legal ceiling, and that municipal officials often submit dossiers missing mandatory studies, budgets, or environmental clearances. Each time a file is returned, the statutory clock stops. That moment rarely features in the political sound-bite.

Speed versus safety: the executive’s new playbook

Cabinet members have already rewritten parts of the Código dos Contratos Públicos to allow design-and-build deals, higher thresholds for direct awards up to €60,000, and a lighter touch on sub-contracting limits in line with Brussels. A broader reform, scheduled to arrive in the Assembleia da República in January, would swap most ex-ante checks for concurrent or posterior audits. Supporters argue that towns racing to complete PRR projects by mid-2026 cannot afford a month-long stop at the Court’s door. Critics reply that once money is spent on a flawed concession, no audit will bring it back.

The Court’s counter-offensive

Newly appointed president Filipa Urbano Calvão insists her institution will not become a “scapegoat for bureaucratic inertia.” She has released data showing that almost three quarters of returned processes lacked fundamental documents. Calvão also warns that removing the up-front filter on high-value agreements, particularly public-private partnerships running for decades, could expose the treasury to costs far beyond the capacity of individual managers to repay if illegality is found later. The Court is willing to discuss a more risk-based model, but only if parliament preserves robust early intervention for contracts whose scale “can sink a budget.”

Companies, lawyers and the corruption debate

Infrastructure contractors lobby hard for quicker signatures, pointing to projects like the Aveiro-Águeda road link where slippage has driven costs beyond the original envelope. Yet governance specialists caution that Portuguese public procurement already ranks among the EU’s most litigation-prone arenas. Easing the brakes without strengthening personal liability could, they say, widen opportunities for bid-rigging, overpriced change orders, and politically driven awards. The Ordem dos Advogados has floated the idea of dedicated commercial courts to handle disputes within weeks, preventing delays from cascading through building schedules.

European deadlines and local reality

By October only 56 % of PRR grants had been executed nationwide. The Tribunal identified more than twenty contracts with severe irregularities, some lacking proof of competitive advertising, others breaching environmental ceilings. Mayors complain that the clock starts ticking the moment Brussels transfers funds, not when Portuguese permitting and heritage authorities sign off. The Court replies that it merely highlights a truth politicians avoid: many flagship projects were approved “on paper” before their engineering studies were even commissioned, a gamble that is now backfiring.

What happens next

If the Government’s January bill survives intact, Portugal could join most EU peers that rely primarily on post-award auditing. Should MPs side with the Tribunal, the legal architecture will stay largely intact, although tweaks to digital submissions and standardized templates may shave days off the current cycle. Either way, municipalities across the country will be watching. Their ability to lay first stone before PRR deadlines—and to avoid repaying unspent millions to Brussels—depends on whether Lisbon can strike a balance between accountability that protects euros and agility that spends them.