Tirana ranks worst on construction permits

TIRANA, April 3 – With only 18 new construction permits issued during the first three quarters of 2011, Tirana, ranked the worst among the 12 Albanian regions, unveiling that apart from low demand, construction companies in the capital are also facing barriers with construction procedures.
The difference with Durres, Albania’s second-largest city is huge. Durres, which tops the list issued 291 construction permits, worth 17 billion lek for the first three quarters of 2011, according to a statistical report issued by INSTAT.
Second came the southern region of Gjirokastra with 114 construction permits in Jan-Sept. 2011 followed by Fier with 94 permits.
A recent IFC-World Bank report called “Doing Business in Southeast Europe 2011” has ranked Tirana last in region for dealing with construction permits as no permit has been issued since 2009. “As of January 2011, no construction permit had been issued here since 2009, mainly because rivaling political parties represented in the council make consensus decision making unattainable.”
However, a regulatory task-form led by Prime Minister Sali Berisha has recently pledged construction permit procedures in Tirana will significantly be cut from 24 to 5 and time needed from a record 436 days to only 40.
Back in 2010, the number of construction permits issued in Albania rose by 21 percent compared to 2009, signaling positive developments for the sector which has been suffering negative growth rates since the second half of 2009. A study conducted by Open Data portal shows construction permits at the end of 2010 rose to 1,845, up from 1,522 in 2009. Most construction permits in 2010, some 312, were issued in Durres– the country’s second largest city. Once the key driver of the Albanian economy, the construction sector was the first to suffer the international crisis impacts in 2008 and has since failed to recover. Prospects seem grim as thousands of unsold apartments are only reported in Tirana while demand has significantly dropped due to falling purchasing power and tight lending standards as bad loans stand at a record 19 percent.
According to the latest Bank of Albania survey, the construction confidence index dropped to a historical record low in the final quarter of 2011 while companies’ expectations for early 2012 became more pessimistic.
“Expectations for production, demand and employment in the first quarter of 2012 remain pessimistic. Around 85.4 percent of construction businesses do not expect carrying out new investments for the first half of 2012,” said the central bank in its survey.