Govt seeking concessionaire for railways network

TIRANA, June 11 – Government says it is seeking an investor to award a concession contract for the country’s poorly-performing public railway sector. The news is announced by Transport Minister Sokol Olldashi during a conference bringing Islamic Development Bank investors to Albania.
“I have to admit that the situation in the railways infrastructure is very poor. We have an old network and are facing serious issues with passenger transport. Because of amortization and low average speed we are trying to attract interest for a concession contract, of course by keeping in place the subsidy on passenger transport which suffers losses but having in mind the fact that railway transport of goods continues remaining profitable,” said Minister Olldashi. In a state of dilapidation and in constant lower revenues for the past 20 years, the state-owned Albanian Railways company has announced it will lay off 20 percent of its staff this year. The cuts are part of a reform aimed at reducing losses in the bankrupt railway sector which costs the state budget more than 500 million lek (around 5 million dollars) each year. London-based EBRD has been approached by the Albanian government to lead a technical cooperation project aimed at revitalizing Albanian railways, currently in a poor condition and used very little for passenger transport.
The Albanian railway company (Hekurudha Shqiptare – HSH) is responsible for rail infrastructure and rail operations on the Albanian rail network. There has been a prolonged period of low investment and maintenance work has been restricted to essential work only. The track is in workable but poor condition. Currently, some 2,100 people are employed in the railways sector, which has seen no major investments during the past 20 years after the collapse of the communist system.
In March 2010, the Albanian government was fined USD 20 million 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 Mother Theresa International Airport.
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. Data show passenger traffic in Albania declined from 125 million passenger in 2000 to 32 million in 2009. The low level of traffic reflects few passenger trains per day, with distances between stations of 17 km to 50 km. The underlying reasons for declining passenger numbers also include long-travel times, unreliability of services, and uncomfortable coaches. Between Durres and Tiranaء 37 km sectionנthe track was modernized in 1997, yet the speed limit remains 60 km/hour. 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: (i) Durres to Tirana; (ii) Durres to Vlore through Rrogozhine; Rrogozhine to Pogrodec; and Vore to Hani i Hotit. In addition, there are two branch lines, one of which is not operational, and two industrial connections؂udull to Fushe-Kruje for cement and Elbasan to the Kurum steel facility. Although the railway was constructed to serve the freight market, passenger services operate throughout the network, with the exception being between Shkoder and Hani i Hotit.