Arbri road

Concession Payments Reach Euro 1 bln

After 2015, the government rapidly expanded the practice of awarding concessions for a range of public services and projects based on the Public-Private Partnership (PPP) model.
Unlike earlier concessions - where a service or natural resource was handed over for operation and companies generated revenue through their activities or user fees - under PPPs, the state committed to making annual payments from the budget, local news provider Monitor reported.
This policy continued despite early objections from international financial institutions, which insisted that every contract be preceded by a clear cost-benefit analysis.
Concessions for sterilization services and basic health screenings - known as "check-ups" - were awarded in 2015. The dialysis concession was approved in 2016, followed by the laboratory services concession in 2019; all these contracts were in the healthcare sector.
During the same period, the practice of awarding concessions for waste treatment also began. The contract for the Elbasan incinerator was awarded in 2015, followed by the Fier incinerator in 2017 and the Tirana concession in 2019. In 2017, the maintenance of the Milot–Morina road was awarded as a concession, while the contract for the Arber Road was approved in 2018. The scanning concession - originally approved in 2013 by the outgoing government - was also revised; aiming to alleviate the financial burden on businesses, the government undertook to cover a portion of the service costs through the state budget.
All these contracts involved direct payments from the state budget. The rise in financial obligations stemming from these concessions compelled the government - following pressure from the International Monetary Fund - to implement a fiscal rule to limit them.

Under this rule, the total annual net payments made by general government units - stemming from PPP concession contracts - must not exceed 5% of the actual tax revenue from the preceding fiscal year.
Should this threshold be exceeded, the Council of Ministers is required to implement corrective measures on the revenue side of the budget - measures both necessary and sufficient to bring spending back within the permitted limit over the next two fiscal years.
However, a level that falls below the fiscal ceiling does not necessarily demonstrate the efficiency of this spending. Experience has shown that a significant number of these contracts have proven cost-inefficient, while some are currently the subject of official investigations by SPAK - the Special Structure Against Corruption and Organized Crime. Data from the Ministry of Finance regarding actual budget expenditures for the 2017–2025 period, processed by "Monitor," show that the state budget has paid a total of 98 billion lek - or approximately 1 billion euros - for 12 concession contracts:
The Arbri Road, customs scanning, sterilization services, laboratory services, the Tirana Incinerator, health check-ups, dialysis services, maintenance of the Milot–Morinë road, educational infrastructure, the Fier Incinerator, the Orikum–Dukat road, and the Elbasan Incinerator.

Today, nearly half of this amount is under investigation, yet no one has been held accountable for orchestrating this massive abuse. As many of these concessions near their conclusion, there has been no analysis of the value they brought to the economy or of the efficiency - or lack thereof - with which taxpayer money was utilized.