The garment and footwear sector which this year is also facing an extra 5 percent increase in corporate income tax, says the screening concession will be devastating for the industry which is one of the biggest private sector employers.
TIRANA, April 2 – Alarmed over the high screening tariffs expected to be applied by a private concessionaire in Albania’s customs points, the business community has called on government to review the deal with U.S-based Rapiscan Systems, which last year was awarded a 15-year concession on cargo and vehicle security screening services.
Luan Bregasi, the head of the Business Albania Association says the Socialist Party should keep its electoral promise of cancelling monopoly concession contracts.
“Government must first cancel the entrance into force of the concession until we have a full answer to the future of this law. Secondly, the current majority must cancel the concession contract as promised before it came to power. Thirdly, the drafters and those who approved this concession which is killing to the private enterprises must be held responsible,” said Bregasi.
The garment and footwear sector which this year is also facing an extra 5 percent increase in corporate income tax, says the screening concession will be devastating for the industry which is one of the biggest private sector employers.
“All our enterprises face the risk of closing down and this means closing down businesses which employ around 100, 000 people. With such a concession deal nobody would be interested in investing in Albania,” said Donika Mici, a representative of the garment and footwear sector.
The road transport businesses are also worried over rising costs and the scanning of transit trucks which risks removing Albania from their itinerary.
While the concession contract was due to have entered into force on April 1, 2014, local media report government has temporarily suspended the concession and is negotiating over tariffs with the concessionaire.
Experts remain skeptical over the results of the negotiations as the contract has already been signed and any unilateral cancellation would have severe financial consequences to the Albanian government.
The contract is expected to cost Albanian business community an estimated Euro 20 million annually, a cost which will also be reflected on consumer prices due to the huge dependency on imports.
U.S-based Rapiscan Systems, which last year was awarded a 15-year concession on cargo and vehicle security screening services at various sites throughout the country, will charge Euro 39 for each screening. The Albanian government will get 2 percent of the income.
Containers or vehicles with a weight of up to 1,000 kg or goods worth up to Euro 1,000 will be excluded from the tariff. The former government said the contracting of a concessionaire was a necessity considering that the customs administration lacks both qualified staff to carry out the scanning and necessary financial resources to maintain the equipment.
Under the program, Rapiscan Systems intends to provide a comprehensive X-ray screening program, which will incorporate technology, staffing, systems integration, and maintenance support at sites throughout Albania. These operational capabilities are intended to enhance the Albanian government’s capability to interdict contraband and undeclared materials. The company currently anticipates that total gross revenues may range from $150 million to $250 million over the term of the agreement.
