TIRANA, Feb. 29 – Albania will launch an electronic platform on construction permits next April, enabling both businesses and households to apply online by reducing bureaucracy and paperwork in state offices, the government has confirmed.
The initiative comes at a time when the number of new permits has dropped to a record low following an almost 2-year suspension to curb illegal constructions, which ranked Albania the world’s worst country in dealing with construction permits in the latest Doing Business report.
The new e-platform scheduled to be made operational starting April 1 on the e-Albania government services portal comes almost one year after a new territorial reform cut local government units to 61 municipalities from a previous 373 communes and municipalities.
“The e-permit system will be an extra instrument available to citizens, investors and construction companies not only to accelerate procedures and increase transparency in examining and approving construction permits, but also to guarantee controlled and well-administered territorial development,” Urban Development Minister Eglantina Gjermeni has said.
“The electronic system will also have a positive effect on improving the business climate in Albania because of easing procedures, reducing bureaucracy and eliminating corruption,” she says.
The number of construction permits has seen a sharp decline in the past few years dropping to a few hundred down from more than 1,000 annually before 2011.
Local government units approved only 125 construction permits during the first three quarters of 2015, down from 219 during the same period in 2014.
INSTAT data shows the number of construction permits dropped to 270 in 2014, down from 360 in 2013, 1,604 in 2011 and 1,492 in 2008 just before the onset of the global financial crisis when construction industry was at its peak level.
Poor demand for new permits has also affected the situation as the long-ailing construction sector continues suffering with a large stock of unsold apartments. Household demand for new apartments has also significantly dropped following a sharp cut in remittances and tight lending standards as non-performing loans climbed up to 25 percent in 2014.
Dealing with construction permits was Albania’s worst indicator in the latest Doing Business report when the country’s business climate suffered a major setback, losing 35 places.
“Albania made dealing with construction permits more difficult by suspending the issuance of building permits,” said the flagship 2016 World Bank report which ranked Albania the bottom 189th country for dealing with construction permits.
As elsewhere in the region, construction has been the most affected sector in Albania’s economy during the past six crisis years, losing its position as one of the key drivers in the pre-crisis years and cutting thousands of jobs.
Developers have recently warned the quadruple of the tax of impact on infrastructure for new constructions in Tirana will increase apartment prices by Euro 150-250/m2. The Association of Developers says the municipal tax which has increased from 2 percent to 8 percent of sale prices for new apartments will negatively affect the construction industry at this time of crisis.
