TIRANA, March 22 – Albania’s dilapidated and little used rail transport has been paralyzed since last weekend with the loss-making state-run company unable to afford buying fuel on its own.
The situation has affected passenger transport while freight transport remains operational.
“Passenger trains have not been operating since several days because of accumulated debts and no fuel. The staff is(are) working under miserable conditions,” representatives of the Railway Union say as quoted by local media.
According to them, this situation is taking the state-run railway sector to bankruptcy.
Genc Alizoti, the director of Albanian Railways company, has promised a quick solution to overcome the deadlock.
Once the main means of transport under communism, Albania’s rail transport has been constantly losing ground since the early 1990s due to lack of investment.
INSTAT data shows the Albanian railway system handled 158,000 passengers in the first three quarters of 2015, compared to 150,000 during the same period in 2014. Meanwhile, freight transport dropped to 176,000 tonnes, down from 216,000 tonnes during the first three quarters of 2014. International railway freight transport which is carried out only through Montenegro accounted for 38 percent of freight transport in the first three quarters of 2015.
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. A new train station outside Tirana opened only in mid-2015. However, located in the suburb of Kashar, some 10 kilometers away from the city center, it remains unappealing to downtown dwellers.
Albania’s railway system posted record losses of 644 million lek (€4.6 million) in 2014, according to the National Registration Centre. The Albanian government provides annual subsidies worth about €4 million to the railway system.
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.
First railway concession
In late Sept. 2015, a joint venture between two Albanian construction companies was 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. 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 to 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 opposition has slammed the contract, claiming conflict of interest due to one of the company shareholders being the son of a Socialist MP.
The World Bank says the underlying reasons for declining passenger numbers also include long-travel times, unreliability of services, and uncomfortable coaches.
The Albanian Railways is the monopoly state-owned rail company and has been a stock holding company since 2000, with the Ministry of Economy as its owner. The rail network is small, with 444 km of single track non-electrified rail with standard gauge, of which 424 km is operated. It consists of 4 main lines: Durres to Tirana; Durres to Vlore through Rrogozhine; Rrogozhine to Pogrodec; and Vore to Hani i Hotit.
