Millions out of the public budget lost to nonexistent waste incinerators

TTimes
By TTimes October 11, 2020 08:16

Millions out of the public budget lost to nonexistent waste incinerators

The Albanian public finances continue to pay out millions of euros to three incinerators, though two haven't been built yet and one is only partially functional. Since 2015 a sum of 25 millions euro has gone from the budget to essentially one company, a monopoly with different branches that is managing the construction and functioning of them in Tirana, Fier and Elbasan. Only the last one is up and running at partial capacity.


Integrated Technology Services, a company with minimum capital and no experience in this industry whatsoever received its first 22 million concession, that of Elbasan, just months after establishment. Two years later, through its branches, it had contracts also for the incinerator of the two sites: Tirana and Fier.


Last year it was reported that SPAK has opened investigations over the tender procedure, suspecting irregularities in the competition procedure and has drawn up a list of people to question. The Nisma initiative that presented the request for investigation claimed that the government is involved in the falsification of ownership documents for the land site in the case of Fier. Inhabitants in the Fier area have strongly protested against the plan.


The conditions in the concessionary contract are detrimental to state finances for two main reasons: first and foremost the government starts to pay the company prior to the completion of the investment and second, the government offers a guarantee that it will subsidize the revenues when there are not enough primary materials, waste, to burn.So far significant delays have marked the construction process whereas the payments have been made according to schedule.

The first plan for the Fier and Tirana sites was to have them done by 2018 but the completion is nowhere in sight.


Money calculations
For the three incinerators, that of Elbasan, Fier and Tirana, the budget is expected to pay another 46 billion ALL by 2046. The longest-term project is the incinerator in Tirana, which is extended until 2046 and will receive payments from the budget in total of almost 314 million euros for the period 2019-2046.


According to treasury data, published by Open Data Albania, the Elbasan incinerator has received from 2015 to June 2020 about 25 million euros, 3 million more than the cost of the original contract. The total cost will increase by millions more in the next two years because of income subsidies.


The Fier incinerator has received until June 2020 about 22 million euros. Since the total cost of the project is 27m euros, the concessionaire has received about 80 percent of the contract before the incinerator is built.
The incinerator of Tirana has received from the state budget in total over 25 million euros. So in the first two years of the 30-year concession, without building the incinerator, the concessionaire received over 20 percent of the total project cost. For the long term impact, none of them produces energy which is supposed to be the main source of revenue and it is unclear whether there will be capacity upgrades to do so.


Incinerator businessman Klodian Mërtiri, also known as Mirel Mërtiri, was declared wanted in Zimbabwe for corruption in a 60m-euro tender for medical equipment for Covid-19. Zimbabwe's Minister of Health was arrested on June 19 for this scandal.


In another ongoing investigation the same company is accused of significant VAT fraud. "Integrated Technology Services" - ITS tops the list of 72 entities that turn out to have made fictitious purchases from companies without activity, in order to artificially increase costs, in order to pay less VAT and profit tax, with a loss of 2 billion, or about 16 million euros. ITS, the incinerator concessionaire, has made purchases through 164 invoices, amounting to about EUR 8 million, or half of the total amount identified by the Prosecution.

TTimes
By TTimes October 11, 2020 08:16