TIRANA, Jan. 18 – Albania faces a variety of significant fiscal risks, including claims for compensation for expropriated property of up to 70 percent of GDP, a large banking sector with a high proportion of non-performing loans and concession commitments of about 7 percent of the GDP, says the International Monetary Fund in a fiscal transparency evaluation report on Albania. The report voices special concern over some 55 public-private partnerships the Albanian government has signed, creating commitments with a present value of about 7 percent of the GDP, in which the government will either pay the cost of the investment in installments or guarantee the revenue of concessionaires.
State-run power utility KESH, the Tirana airport and recent customs scanning and health checkup service concessions are described as risky public-private partnership.
“The government’s electricity-generation company, KESH, has entered into contracts with hydropower producers (with payments worth 4 percent of GDP). Tirana airport is operated under a 30-year concession that began in 2005, in which the concessionaire benefits from a 9 million euro guarantee and a monopoly over the landing and departure of international flights. There are also contracts for a scanning service (2 percent of GDP), a national health-checkup service (1 percent of GDP), and a waste-management project at Elbasan,” notes the report.
Many new projects are being undertaken or planned, including for the Milot-Morinà« and Arbà«ri
toll roads, the last project having an estimated cost of 2 percent of GDP, says the IMF.
In its latest country visit last November, an IMF mission said the Albanian economy is back on track and the country is expected to be awarded two new loan tranches worth about €74 million in early 2016 after failed mid-year negotiations over poor performance of Albania’s public finances.
The poor tax performance in the first half of this electoral year forced the Albanian government to revise downward its 2015 budget, while the International Monetary Fund postponed its new loan tranche as part of a three-year €331 million loan.
