TIRANA, Jan. 23 – A bill sent to the parliament on Tuesday signals the end of legally being able to approve “unsought concessions” starting July 2019, thus cancelling the most controversial mechanism the government has been using over the last years particularly in the sector of infrastructure.
The bill, coming from the ministry of finance, says it will no longer be a right to accept “unsought proposals” for concessions of the kind that have currently allowed the Socialist-led government to sign contracts worth over one billion euros.
An accompanying report to the bill explains the change is coming as a result of “recommendations” made by international organizations, such as the International Monetary Fund and the World Bank.
The bill was drafted at the time former Minister of Finance Arben Ahmetaj was still leading the institutions, only to be replaced a few days later by Anila Denaj, in a government reshuffle decided by Prime Minister Edi Rama. It was handed over to the parliament by the Council of Ministers on January 9.
“This bill verbally stipulates that after July 1, 2019, the private sector will no longer have the right to propose concession projects/PPP, in the form of an unsought proposal, for the construction, operation, maintenance and rehabilitation of national roads of special importance,” is written in the report published on the website of the Albanian Parliament.
“This bill proposes, starting from July 1, 2019, for unsought proposals to be allowed only for the construction of projects and/or services in ports, airports, production and distribution of electricity, heating energy and natural gas distribution,” the ministry further argues.
Albania’s current Socialist government has been heavily criticized at home and abroad for a big number of concession contracts of considerable value which have been enabled either by special laws that avoid competition and determine the winner in advance, or through “unsought proposals,” which, in practice, completely cancel out any competition and give the proposing entity an invincible advantage by government decision, thus making the race a simple formality.
Various institutions, including the International Monetary Fund, the US State Department, or the European Commission have raised major concerns about the special laws passed by the current government to negotiate concessionary contracts at the expense of taxpayers.
According to the IMF, “the framework of the government’s work for the selection and prioritization of investment projects, as well as for the assessment of fiscal costs and risks, remains insufficient,” while the IMF itself had requested in early 2018 the prohibition of granting new, unsought concessions.
According to the US State Department, “the growing use of public and private partnership contracts has narrowed competition opportunities, including from foreign investors, in infrastructure and other sectors.”
Meanwhile, the EC forced the government last September to renounce the initial bill that provided private negotiation with ‘Fusha Sh.p.k’ for the construction of a national theater in exchange for the development of a part of public land occupied by the existing theater building, because the law brought about a competition restriction and was followed by great public unrest and doubts over its legality.
In the context of continuous scandals’ debunking in the past months, the government announced on Monday it will be withdrawing from negotiations on its most expensive concession contract – the Thumane-Kashar highway, valued at 435 million euros – to channel the funds in the public education sector.
Following up the government’s claims, opposition Democratic Party MPs rushed to point out the 2019 State Budget does not foresee the government beginning to pay back its Thumane-Kashar highway PPP monetary obligations until 2020, thus raising eligible doubts on the true reasons behind the government’s withdrawal from its favorite tactic.