TIRANA, June 12 – Albania has suspended new public tenders and concessions until the June 25 general elections in a bid to curb the misuse of financial resources during the electoral campaign. The government decision came on June 1 following a late May deal breaking a three-month political deadlock that paved the way for the opposition’s participation in the elections.
The new government following the deal between the main ruling Socialist Party and the opposition Democratic Party continues to be led by Prime Minister Edi Rama but includes six caretaker ministers, a deputy PM and several key directors proposed by the opposition Democrats, preparing the ground for free and fair elections and the advancement of the long-awaited justice reform, a key condition for Albania’s opening of EU accession negotiations.
The government decision bans all ministers and their subordinates from initiating new public tenders and concession or PPP procedures during all 30-day electoral campaign until the electoral silence on June 24 except for emergency purchases necessary for the institutions’ operation.
The decision is part of deal to curb the use of public administration and its human, financial and logistics resources during the electoral campaign. Several public administration officials have been suspended over allegations of vote-buying or involvement in electoral campaign during office hours following recent legal changes to the Criminal Code making the offences punishable by prison.
One of the main doing business barriers for local and foreign investors in Albania, public procurement continues to face issues related to limited competition and discriminatory criteria although the country has been offering e-procurement procedures since eight years in a bid to reduce corruption and increase transparency.
Reports by the Public Procurement Agency and the Procurement Commission appeals body show state-run institutions continue abusing public tender procedures awarding contracts with no race and placing discriminatory criteria apparently to select pre-determined winners.
Public-private partnerships have also become a hot topic in Albanian politics after some risky concessions and warnings by international financial institutions that some 55 public-private partnerships the Albanian governments have signed during the past decade, have created commitments with a present value of about 7 percent of the GDP or €700 million in which the government will either pay the cost of the investment in installments or guarantee the revenue of concessionaires.
The concessions, especially the medical check-up and hemodialysis, have been marred by accusations of lack of transparency and inexperience by concessionaires.
The freeze on public tenders and concession procedures could temporarily halt new public investment scheduled for June 2017. Public investment rose by an annual 37 percent to about 14.5 billion lek (€106 mln) in the first four months of this year, but was down by 8 percent compared to the January-April target, according to finance ministry data.
Albania’s public finances exceeded expectations in the first four months of this electoral year when government revenue rose by an annual 6.6 percent and spending was in line with targets.
Government revenue has traditionally underperformed in electoral years during the past two decades with incumbent governments increasing spending to apparently gain an electoral advantage but a mid-2016 law set a fiscal rule with a long-term debt target of 45 percent, also disciplining spending in electoral years.
Albania’s public debt, currently stands at about 68.4 percent of the GDP, down from a record high of 72.6 percent of the GDP in 2015. The debt level is still considered too high for the current stage of the Albania’s economic development with its high servicing costs, curbing much-needed investment in key priority areas.
