Águas de Portugal chemical contracts under suspicions of fraud and public health risks

Portuguese prosecutors have opened a criminal investigation into suspected fraud, document forgery and potential risks to public health linked to chemical supply contracts awarded by state-owned water utility Águas de Portugal to chemical distributor RNM.

The investigation has already resulted in three individuals being named as formal suspects (“arguidos”). They are identified as senior figures at RNM, with investigators examining alleged irregularities that may have caused losses of up to €500,000 (for Águas de Portugal).

According to CNN Portugal, the investigation stems from a complaint filed two years ago by Spanish chemical supplier Acideka, which produces aluminium polychloride, a key coagulant used in the treatment of drinking water.

The complaint alleges offences including the adulteration of products intended for public consumption, document forgery and commercial fraud.

Acideka claims RNM used allegedly falsified documentation to justify price increases and deliveries of products that the Spanish manufacturer says it did not supply.

Data from Portugal’s Base public procurement portal shows RNM has been awarded more than 200 contracts in the water sector since 2019, worth more than €21 million.

Among the contracts under scrutiny is a deal worth more than €2 million signed in 2020 with Águas do Algarve.

According to the complaint, commercial relations deteriorated in October 2022 when deliveries from the Spanish supplier reportedly declined, despite the public company continuing to record receipt of the product.

The complainants also allege RNM used a price increase announced by Acideka of around €115 per tonne to justify a larger increase of approximately €125 per tonne, potentially causing losses estimated at between €179,000 and €413,000.

The complaint further alleges that 115 delivery notes and laboratory analysis certificates bearing allegedly altered logos were used to document the delivery of around 1,500 tonnes of product.

A second contract involving reagents supplied to wastewater treatment plants is also under investigation. The complaint alleges discrepancies between the quantities ordered and those delivered, as well as suspicions that products different from those specified in the contracts were supplied.

According to the allegations, operational problems were recorded at two Águas de Portugal treatment plants, including deposits and crystal formation in equipment. The complaint also claims RNM did not hold the required REACH registration for manufacturing the reagent at the time.

Lawyer Paulo Veiga Moura has told CNN Portugal that, because public health may be involved, the investigation should be treated as a priority, arguing that any proven document or product falsification could result in criminal liability for both the company and its directors.

Francisco Ferreira, president of environmental association ZERO, has also stressed the importance of ensuring full traceability of all raw materials used in drinking water and wastewater treatment processes.

In response, Águas de Portugal rejected suggestions that public health has been endangered. The state-owned group said that, in the case of wastewater treatment plants, “no non-compliance with legal parameters has been detected following approximately 60,000 laboratory analyses carried out since 2022.”

The company confirmed it had launched an internal audit following a recommendation from its Ethics Committee and has applied to join the criminal proceedings as an interested party.

Regarding the reagents supplied, Águas de Portugal said its internal checks indicate that “the product supplied originated from the Acideka group and met the contracted quality requirements.”

RNM declined to comment, citing judicial secrecy.

The Public Prosecutor’s Office will now determine whether irregularities occurred in the award and execution of the public contracts, whether documents were forged, whether products different from those contracted were supplied, and whether any financial losses or impacts on Portugal’s water treatment system resulted.

source: Executive Digest