Tirana-Elbasan highway gets another $16 mln to exceed initial costs by 44%

Tirana Times
By Tirana Times September 18, 2018 17:22

Tirana-Elbasan highway gets another $16 mln to exceed initial costs by 44%

TIRANA, Sept. 18 – Albania is borrowing another $16 million to carry out emergency intervention in a highway linking Tirana to Elbasan, central Albania, but also serving as a hub to southeast Albania and neighboring Greece and Macedonia, in several extra financing needs since the highway first opened to traffic in 2013.

The new loan deal with the OPEC Fund for International Development comes one year after the government also borrowed an extra $30 million from the Islamic Development Bank to complete the first 14 problematic kilometers of the Arab-funded highway whose progress has been halted by massive landslides and extra financing needs.

The 20-year soft loan will also be used to rehabilitate landslide affected areas in the highway’s 4th, 11th and 14th kilometers, in new emergency rehabilitation aimed at increasing road safety by preventing new landslides.

Speaking at a hearing with the parliamentary economy committee this week, Infrastructure Minister Damian Gjiknuri said the highway’s cost had increased by an extra $138 million or 44 percent compared to initial estimates of $312 million.

The same thing also happened with the highway linking Albania to Kosovo whose final bill cost an estimated $1.36 billion, two-thirds more than the initial contract.

Experts attribute the sharp hike in costs at the major two infrastructure works to poorly drafted contracts, lack of sufficient supervision and corruption.

Recent projects have switched major road infrastructure to public private partnerships mostly under unsolicited proposals favoring companies that initiate them, despite warning by international financial institutions over lack of cost-benefit analysis and potential government arrears putting at risk the country’s debt reduction agenda.

The Tirana-Elbasan highway is one of the major two publicly funded highways built in the country during the past decade together with the Highway of Nation linking Albania to Kosovo.

Overwhelmingly funded by the Islamic Development Bank with $258 million and other Arab financial institutions such as the Saudi Fund for Development and the OPEC Fund for International Development, the highway has already considerably cut distance between capital Tirana and Elbasan, the third most populated region of Albania, and a hub to the southeastern Albania.

The new four-lane highway that cut travel distance between Tirana and Elbasan from a previous 48 kilometers to only 31 kilometers, has been partially operational since 2013 when a double-bore 2.5 km tunnel was built by Greece’s Aktor for $83 million.

Back in 2014, massive landslides following uncontrolled explosions and difficult terrain led to the evacuation of some 30 households and caused damage to local businesses.

Tirana Times
By Tirana Times September 18, 2018 17:22