Government seeks largest loan so far for Durres-Kukes road

TIRANA, April.24- Albania has appealed for a commercial loan to help fund construction of a road segment that would shorten the route to neighboring Kosovo, the Finance Ministry said Tuesday. Albania needs an additional euro 200-230 million ($272-$312 million) over the next two years for the project, which when finished will reduce travel times to Kosovo from six hours to two, the ministry said in a statement.
A U.S.-Turkish joint venture signed a 418 million euro contract with Albania in October to build a 60-kilometer road segment, including a 6-kilometer tunnel, by June 2009. The road segment would be part of a 170-kilometer highway to Kosovo, still a U.N.-run province but soon to have a final status resolved by the Security Council.
The road will run from the port city of Durres, 35 kilometers west of the capital, Tirana, to the town of Kukes, 200 kilometers (125 miles) northeast of Tirana, and then to the Morina border crossing point. The joint venture includes Bechtel International Inc., based in San Francisco, California, and Istanbul-based Enka.
Experts have argued that the terms of the loan which I this case will be commercial are not favorable as they entail higher interest rates averaging 5.5-6 percent and shorter liquidation times up to 15 years. Prior to this decision the government had to take permission from the IMF in order to seek this loan and to guarantee that it can afford the interest payments. The loan allowance of the IMF is used to 2/3 of it by this considerable loan amount. The most difficult segment of the road is Kalimash-Rexhepaj. Last week, Minister of Transportation Lulzim Basha and representative of the Islamic Bank for Development Faruk Miami, signed an agreement according to which the bank allocates $ 35 million for the construction of the Kalimash-Rrexhepaj segment, part of the highway Durr쳭Kuk쳭Morin뮠Hence the Islamic Bank for Development joined the their international partners like OPEC Fund and he World Bank that are financing the strategic infrastructural project that will link Albania’s major port to Kosovo. The loan has to be approved by the bank’s board within May of this year and then the procedures for the contracting and supervising firm will start. The operations will be complete in May 2009. so far this is the most significant loan that this particular banks has allocated to Albania.