TIRANA, Aug. 1 – A consortium of Albanian companies has been given a 99-year concession to build and operate an industrial park outside Durres in a free economic zone for a symbolic Euro 1 in return for investment and job creation.
The consortium, composed of “Pelikan,” “The Best Construction,” “Và«llezà«rit Hysa,” local Albanian companied has bid to build a ferrochrome plant worth €39 million that is expected to open up 2,500 jobs.
Albania is a key chromium producer with most of local production destined for China.
EDIL AL-IT, one of the biggest Albanian construction companies, and one of the two bidders competing for the Spitalla industrial park, has filed a lawsuit against the Albanian economy ministry, the tender organizer, claiming the ministry favored the winning bidder.
The company says the Albanian economy ministry and the Public Procurement Agency have acted in violation of the law in announcing the winning company at a time when the tender procedures are still being examined by the Tirana administrative court following a lawsuit.
The tender held in late April failed to attract international interest after the Albanian government cut the industrial area park to 101 hectares, down from an initial 500 hectares in the previous tenders.
The announcement of a winner puts an end to several tender failures since Spitalla, an industrial area just outside Durres, was identified as a special economic zone in 2015 in a bid to attract foreign investors by offering them incentives.
Located just outside Durres, the Spitalla park is a strategic site, close to the country’s biggest port of Durres, 30 km from the international airport and 37 km from Tirana.
The Albanian government had described it as an opportunity to attract strategic investors through a series of tax exemptions which target turning it into one of the most competitive in the region.
However, in early 2016, Albanian authorities turned down two bids by Chinese and Italian companies to build an industrial park outside Durres, the country’s second largest city, that was supposed to attract a billion dollar in investment and create dozens of thousands of jobs. The government said the bids were turned down due to irregularities and lack of appropriate documentation in the submitted proposals.
In the Spitalla special economic zone, the government initially targeted bringing technological and industrial companies with a big number of employees.
In its new law on technological and economic development zones, the Albanian government plans to offer a series of tax reductions to foreign investors, including exemption from the 50 percent profit tax on the first five years of their activity, exemption from the 20 percent VAT on imports and a series of other preferential rates and deductible expenses.
Investors are also supposed to be offered a one-stop shop on licences and have a customs and fiscal unit available at the special economic zone where they operate.
The Albanian government has also identified two other free economic zones in the southern coastal city of Vlora and the Koplik town in northern Albania near the border with Montenegro.
The concessions are part of the Albania 1 Euro initiative which has been available for a decade but proved unsuccessful in attracting foreign investors in these kinds of investment.
Albania attracted a historic high of €1 billion in foreign direct investment in 2016, mainly thanks to some major energy-related investment, being the second-largest FDI recipient in the six EU aspirant Western Balkans countries for several years in a row.
Lack of newly contracted major FDI projects in the past few years has sparked concern among experts over the future of FDI in the country in the post 2020 when the Trans Adriatic Pipeline and Devoll hydropower are completed.
However, the implementation of a long-awaited justice reform increasing investor confidence in the country’s highly perceived corrupt judiciary and a revise downward in the tax burden, currently one of the region’s highest, could give a real boost to FDI and know-how especially in non-energy related sectors creating more jobs.
