An update on the procurement angle of the funicular tragedy in Lisbon

Since I last wrote about this case a couple of weeks ago, some more information has come to light.

In a press conference soon after the accident the president of Carris informed that the company had awarded a 5 month contract to its existing contractor and the company uploaded the 2019, 2022 and 2025 contracts to their website.

As I said then, this would be the most logical course of action since it allowed Carris to go back to the market with an open procedure and a revised maximum price for the contract. This means there is not a second company involved with maintenance of the funiculars at the time of the accident.

In the meanwhile we also now know that the likely cause of the accident was the snapping of the traction cable connecting both funiculars. However, it seems based on the contracts that it was Carris who supplied the traction cable to the contractor for installation, opening the possibility of discussions on the liability for the accident: the operator, the maintenance contractor or the cable supplier. There are also media reports the specifications of the cable changed around a decade ago, from a 100% steel strand cable to a composite interior with steel strands on the outside.

Portuguese media is also having a field day with this case. Just a couple of days ago one of main daily newspapers ran a headline that maintenance costs had gone down 28% in real terms in three years when the Lisbon mayor had claimed it had increased by 30%. The text of the news piece showed that the calculation had not been based on the overall costs of the operator but instead those of the 'electrical traction mode', that is trams and funiculars. After the reply from Carris stating the maintenance costs between 2020 and 2024 had increased by 32% in total, the journalist doubled down yesterday on looking at trams and funiculars together.

As it happened, the funicular maintenance contract cost may or may not have increased between 2019 and 2022, since the newer contract included more services connected with potential accidents and vandalism. If we include both components, prices went up 17% between both contracts but it is unclear if we are really comparing apples to apples or apples to oranges. It depends if those same services were already included in 2019 and were just set aside as an eventuality or a risk to be managed or not.

However, the tender documents for 2022 did forecast a maximum price of around 70% higher than the outgoing 2019 contract price. But more about the award prices between 2019 and 2002 are quite similar in a second.

Furthermore, vis-a-vis the actual contract price from 2022 there was a built in rise of 20% on the maximum price for the tender that was cancelled on August 2025 when all bids received were priced above the maximum contract price (EUR 33k/month). The new 5 month contract also has a daily price significantly superior to the 2019 and 2022 contracts (EUR 44k/month). But this takes us to today's news.

Today, another national newspaper reported that the 2022 funicular maintenance contract (which was no longer in force when the accident happened) might have been...too cheap. This report is based on a complaint by an aggrieved bidder who argued that the winning bid price was abnormally low since it was around 50% lower than the maximum price for the contract. In 2022 the jury of the procedure did not accept that view and awarded the contract regardless.

I think both claims amount to, frankly, nothingburgers. The only obligation in law regarding abnormally low price is for the contracting authority to investigate and not to exclude even if it finds the price to be abnormally low. Yes, bonkers but that's a problem 'Made in Directive.' But even then I don't think the price was abnormally low since it was in line with the 2019 contract price. Plus, I can immediately imagine the case in the court and headlines in the newspapers if Carris had decided to award the contract to a higher priced bid. Something something corruption something something poor stewarding of public funds.

So far, based on the currently available information I am not seeing something really untoward from the procurement angle on this case.