TIRANA, Dec. 22 – The Albanian government has decided to reject bids on a concession contract for a 114-km highway segment linking Albania to Kosovo, which would have made it the first toll road in Albania, citing high level of bids running counter to public interest.
Speaking at a press conference on Tuesday, a senior transport ministry official said the bids submitted by China Communications Construction Company and Turkish-Albanian joint venture “Vendeka Bilgi Teknolojileri Ticaret L.T.D & Salillari” were twice higher compared to expectations by the Albanian government and the World Bank which is assisting through the IFC, its private sector lending arm.
“The evaluation commission based on the suggestion of the International Finance Corporation, IFC, concluded that the bids submitted in the race run counter to public interest, considering that they are twice higher compared to our expectations. The commission has decided to announce this bids invalid and reject them,” said Eduart Seitaj, the Secretary-General of the Transport and Infrastructure Ministry.
The government says it is still examining whether it will proceed with a new tender or find other solutions that would attract private investments in one of the country’s key road segments which still needs huge investments and has high maintenance costs.
The Albanian government expected the winning concessionaire to impose Euro 5 tolls during the 35-year concession to upgrade, operate and maintain the 114 Milot-Morine segment, part of the so-called Highway of Nation and invest up to $43 million.
Experts had voiced concern the concession would negatively affect trade exchanges with Kosovo, the country’s second trade partner for exports, and tourist arrivals from the neighboring ethnic Albanian country which accounts for about half of foreign visitors in Albania’s ‘patriotic’-dominated tourism.
The winning concessionaire was supposed to collect and keep toll revenue and in exchange be responsible to implement and finance motorway improvement measures, construct a new bridge on Drini River in Kukes, northeastern Albania and carry out emergency geotechnical and stabilization works.
The highway is part of the national roads network and constitutes the largest road engineering project in Albania’s history. Linking Milot, approximately 60 km northeast of the Adriatic Port of Durres, with Morine at the Kosovo border, the route forms the central section of the wider Albania-Kosovo highway, connecting Durres with the Kosovo capital Prishtina.
The Kosovo government is also planning to introduce tolls for its highway to Albania which is expected to make travel to the two neighboring countries much more expensive.
The Albanian government says it plans to extend the toll system in other road segments in order to guarantee maintenance and standards and cut its budget costs.
The concession which now seems on track had been delayed for a couple of years because of lack of legal framework for toll roads, which were approved only in mid-2014.
Operational since June 2009, the Durres-Kukes highway and its 5.5 km twin-bore Thirre tunnel is estimated to cost government around 4 million euros annually in maintenance.
“Road tolling offers the possibility of raising additional revenue for the road sector, and provides a dedicated source of finance for a particular road. Revenue from tolling is also independent from the annual budgetary process, and therefore increases the stability of road sector revenues, though toll revenues remain exposed to traffic risk,” says London-Based EBRD which is supporting the Albanian government in the reform of the road sector.
The Durres-Kukes highway, which is estimated to have cost Albania a staggering Euro 1 billion became fully open to traffic only in October 2010. Its major 60 km Rreshen-Kalimash segment was built by Bechtel-Enka, a U.S.-Turkish consortium.
