Watchdog advises review of scanning concession

TIRANA, June 18 – Albania’s Competition Authority has recommended that the Albanian government reviews a concession deal with U.S-based Rapiscan Systems on cargo and vehicle security screening services at various sites throughout the country as running counter to Albania’s EU’s commitments and violating tender procedures.
The Authority said it examined the concession contract after concerns by the business community which complained that its costs would increase by 20 million euros a year from the scanning service.
“The concession contract, signed in April 2013 but which has not been made effective yet runs counter to the Stabilization and Association Agreement (SAA) Albania signed with the EU which has a priority over other law and by-laws.”
The Competition Authority says that since the SAA entered into force in 2009, no new customs duties on imports and exports or other tariffs can be imposed, and existing tariffs between the EU and Albania cannot be raised at a time when the concession deal foresees extra fees of Euro 39 per screening which will be paid for scanning of containers and vehicles.
The Authority says the concession deal was made without the necessary assessment by the Competition Authority as a deal awarding exclusive rights.
The concession procedure was also an unsolicited procedure and not an open tender procedure that would place all potential bidders under equal competition positions.
In addition, the installation of scanners in five customs points, of which three in determined points and two remaining mobile does not cover all customs points to justify the goal of the concession, argues the Competition Authority.
The Authority also recommends that the Finance Ministry can contract the concessionaire only for the purchase of equipment and carry out the service on its own.
U.S-based Rapiscan Systems, which last year was awarded a 15-year concession on cargo and vehicle security screening services at various sites throughout the country, will charge Euro 39 for each screening while the Albanian government will get 2 percent of the income.
The business community has also expressed its concern over rising costs, warning of protests.
Reacting to the producers’ concern, Prime Minister Rama has recently assured the business community government will review the concession which he described as running contrary to the country’s interest by increasing costs for both importers and exporters.
“We will negotiate and see what solution of interest we can reach which in no case will be to the detriment of importing and exporting companies,” Rama has earlier assured.
While the concession contract was due to have entered into force on April 1, 2014, government has temporarily suspended the concession and is negotiating over tariffs with the concessionaire.
Experts remain skeptical over the results of the negotiations as the contract has already been signed and any unilateral cancellation would have severe financial consequences to the Albanian government.
The contract is expected to cost Albanian business community an estimated Euro 20 million annually, a cost which will also be reflected on consumer prices due to the huge dependency on imports.
Containers or vehicles with a weight of up to 1,000 kg or goods worth up to Euro 1,000 will be excluded from the Euro 39 tariff. The former government said the contracting of a concessionaire was a necessity considering that the customs administration lacks both qualified staff to carry out the scanning and necessary financial resources to maintain the equipment and fight contraband and undeclared materials. The company currently anticipates that total gross revenues may range from $150 million to $250 million over the term of the agreement.