TIRANA, Sept. 29 – A joint venture between two Albanian construction companies has been awarded a 25-year concession to rehabilitate and operate two key railway segments in southern Albania, marking the first concession in the country’s degraded railway network.
Albania’s Public Procurement Agency says it has announced the joint venture between Alb-Star and Matrix Konstruksion as the winner of the Fier-Ballsh and Fier-Vlore concession.
The 26-km Fier-Ballsh segment links the southwestern city of Fier to the oil refinery in Ballsh, a line used for oil transport while the 34-km Fier-Vlore segment is used both for passenger and freight transport.
The joint venture, which was the sole bidder in the tender held last June, plans invest 2.4 billion lek (€17 million) in the two railway segments in four years. It expects freight transport to increase to 2.6 million tonnes a year and passenger transport to 307,500 a year.
The concessionaire will pay the Albanian government 2.2 percent of its monthly turnover.
The transport ministry has set a 45-day deadline to complete the contract negotiation.
Albania’s railway passenger transport suffered another blow in 2014 but freight transport strongly recovered.
The number of passengers who travelled by train dropped to a historic low of 186,625 in 2014, down from 329,000 in 2013 and a record high of around 4 million people in the early 1990s after the collapse of the communist regime when train was the main means of transport.
The railway sector was also severely affected by the demolition of the Tirana train station in late 2013 to build a new boulevard whose construction was suspended because of political disputes between the municipality and the government.
However, railway transport of goods recovered to 338,237 tonnes, more than double compared to 2013 but below the pre-2010 period.
A recent World Bank report has ranked the state-owned Albanian railways as the poorest in Southeast Europe as far as traffic density and productivity is concerned.
Albania would have already had a modern railway network in Tirana and Durres had it not unilaterally cancelled a contract with U.S. giant General Electric back in 2005.
In March 2010, the Albanian government was fined USD 20 million by an arbitration court over the unilateral annulment of a 2003 contract, worth Euro 74 million with General Electric. The project cancelled in 2005 was aimed at modernizing the Tirana-Durres railway segment, known also as the electric train, which would have been linked with the Mother Theresa International Airport.
