The identified debt figure at Euro 172 million is twice lower compared to what the new Albanian government claimed and twice higher compared to what the former government pretended
TIRANA, Dec. 3 – The Albanian government owes the business community 24.6 billion lek (Euro 172 million) in unpaid bills and arrears, Finance Minister Shkelqim Cani announced this week unveiling the findings of an audit carried out by accountancy giant Deloitte.
“Deloitte has identified 24.6 billion lek that the state budget owes to Albanian or foreign businesses. However, this is only part of the debt and does not include debts the government owes to individuals based on law or court decisions,” said minister Cani, adding that 65 percent of the identified debt belonged to construction companies for finished public works, followed by the health sector with 17 percent and the education sector with 8.4 percent.
“The debts tax authorities, the local government, courts and bailiff offices owe to businesses and households will be audited in another moment,” added Cani.
The minster announced government was negotiating over a loan to make the full payment of the loan at once. Government has been negotiating both the IMF and the World Bank over loan of around USD 200 million to pay the debts to the business community.
The debt figure unveiled by Deloitte is twice lower compared to what the new Albanian government claimed and twice higher compared to what the former government pretended.
The Albanian government and the IMF claimed government owes private companies 55-60 billion lek (Euro 382 to 416 million) in unpaid government bills and arrears.
Meanwhile, former Finance Minister Ridvan Bode who was in charge of the country’s public finances for the past eight years says government owes the private sector only 11 billion lek (Euro 76 million) in accumulated unpaid bills.
Deloitte was contracted in early October just one month after the Socialist Party-led government came to power.
Deloitte, famous in Albania for auditing the pyramid investment schemes in 1997, was paid Euro 85,000 for the audit of unpaid bills to the business community which has turned into a hot topic in Albanian politics with the opposition claiming unpaid bills are five times lower compared to what the new Socialist Party-led government pretends.
The audit, which will cover debts until the end of last August just few days before a new government took over, concluded at the end of last November.
Deloitte, which was selected by the Albanian government through direct negotiation, says the audit will not be carried out in compliance with International Standards on Auditing, and as a result, it will not take responsibility on the financial information because of lack of field verifications.
Government officials had earlier said public institutions will undertake a verification process after the audit concludes before paying off the debts.
In its latest report on Albania, the IMF said “addressing the problem of unpaid bills and arrears would enhance the government’s credibility and boost liquidity and confidence. Clearance of these liabilities would strengthen private sector balance sheets, facilitate the resumption of credit growth by helping lower nonperforming loans (NPLs) and support domestic demand.”
