WB: Property compensation to take 30 years, cost Euro 30 bln

TIRANA, July 17 – In an updated report on property issues in Albania, the World Bank foresees that under the current pace, the financial compensation of former property owners would take another 30 years and a staggering 30 billion euros.
The World Bank suggests the compensation formula needs to be changed and follow the examples of Macedonia and Montenegro where land was not compensated under current market value but at tariffs when it was confiscated by the communist regimes, Deutsche Welle in the local Albanian service reports.
The World Bank warns the compensation bill for ex-owners would affect all citizens because money would come from the state budget which finances schools, hospitals and other social services.
“The Albanian state budget is too modest to handle Euro 30 billion. The European Commission considers failure to solve the property issue a serious barrier for Albania’s European integration and more concretely efforts to gain EU candidate country status.”
Albania is the only former ex-communist country which grants unlimited compensation at market value. Under this formula, it would take Albania 30 billion euros and 30 years to end the compensation process for the former legal owners.
The World Bank suggestion to the Albanian government to accelerate the process by lowering the compensation amount has been strongly opposed by the former land owners represented by the Property with Justice Association.
Agim Toro, the secretary general of the Property with Justice Association says the World Bank suggestion for compensation below the market value is completely unacceptable.
“The World Bank brings examples of countries like Macedonia and Montenegro and not other ex-communist countries from central Europe who have already solved the property issue,” says Toro, adding that there’s no EU country which does not compensate owners 100 percent for their property.
“The Albanian law also foresees that compensation will be 100 percent at market value prices. The World Bank suggestion is unacceptable also for two other reasons. Decisions by property commissions are equal to court decisions and do not change. Even the European Court for Human Rights in Strasbourg has recognized 100 percent compensation at market value in dozens of decision in favour of Albanian owners,” adds Toro.
The Association has also filed a complaint with the European Court for Human Rights. “Owners and all Albanians have their biggest hopes in the European Charter on Human Rights. We also hope to be granted EU candidate status. If this happens, the same formula and standards on property restitution and compensation would also be applied in Albania.”
The World Bank has earlier dismissed as untrue the Association’s claims of full compensation.
“We studied the international experience, and there is not a single country in the entire world- not only in Europe but the entire world – that has considered fair to provide a full compensation at the current market price for the land confiscated many years ago,” Kseniya Lvovsky, World Bank Country Manager has earlier noted.
An acceleration in the payment of compensation to expropriated owners is urgently needed to ensure credibility of the law, stem the flow of legal challenges, and remove obstacles to the completion of the legalization process, says the World Bank in its report.
At the same time, this may require revisiting the legal provision to pay compensation at current market values, which is not in line with international practice. A comprehensive solution will also need to consider the status of a large number of informal properties that currently remain outside the legalization process and clarify the legal rights of legalization applicants while the process is ongoing, suggests the report.
Last year, Albania’s Property Restitution and Compensation Agency (AKKP) announced 107 winners who will benefit from 670 million lek (USD 6.7 million, Euro 4.8 million) from the 2011 fund to compensate former owners.