Portugal's new Socialist government is making good on its promise to roll back the previous government's privatizations, with public transport companies first in line.

The Cabinet announced Thursday it is annulling the concessions to run bus and subway services in Lisbon, the capital, and Porto, the second-largest city. The concessions were awarded last year to Spanish and French companies.

The loss-making transport companies, which together are more than 4 billion euros ($4.3 billion) in the red, were privatized by the center-right government that ruled from debt-heavy Portugal's 78 billion-euro bailout in 2011 until last November.

Transport Minister Joao Matos Fernandes said the government expected no legal challenges nor compensation demands because regulators had not yet approved the changes.

The government also aims to reverse the privatization of TAP Air Portugal.