Less than a month after the approval of legal changes permitting the Ministry of Economy, Culture, and Innovation to privatize state institution properties, the National Territorial Planning Agency has issued a call for construction in several key areas of the capital. This call proposes the construction of two new towers by private entities in exchange for building offices for several state institutions. The market value of these towers is at least 150 million Euros.
Jona Plumbi
The National Territorial Planning Agency has initiated a competition for the ‘development’ of public property, just a week after the Council of Ministers decided to transfer several state properties to the responsibility of the Albanian Investment Corporation.
In this case, development involves constructing on public land in various parts of Tirana by private entities, offering them the opportunity to acquire property in exchange for building offices for several Albanian institutions.
‘The outcome of this competition will be project ideas for new administrative centers in Tirana and parallel projects in the form of private developments, which will be built as part of the contract with the winning partner,’ states the AKPT announcement.
Private developments refer to the construction of two towers in Tirana.
First Tower
The first tower is planned to reach up to 41 floors, covering an area of 52,500 square meters, and will be constructed on Zhan D’Ark Boulevard, on the current property of the Educational Services Center.
Educational Services Center
In return, the government will oversee the construction of 22,000 square meters of office space at Komuna e Parisit
Second Tower
The second tower is projected to rise up to 40 floors, or 40,000 square meters, and will be constructed on Muhamet Gjollesha Street, on the current public property where the Property Treatment Agency is situated.
Property Treatment Agency
In addition to public property, in this case, the map showing the competition area appears to include at least two buildings that are privately owned.
In exchange for building this tower on public land, the government has requested 15,000 square meters of office space at Zogu i Zi, where the State Cadastre Agency is located.
This will result in a total construction area of up to 92,500 square meters for the tower and 37,000 square meters for state offices.
Around 150 million euros of public property are being transferred to private ownership
To estimate the construction value that the private sector is invited to undertake on this public property through the AKPT’s call, one needs to look at the reference prices for the Tirana Municipality based on cadastral zones.
The proposed tower on Zhan D’Ark Boulevard falls within Unit 3 of the Municipality, in zone 3/1, where the reference price is 98,500 ALL per square meter. Similarly, the second tower planned on Muhamet Gjollesha Street belongs to Unit 7, zone 7/2, with a reference price of 123,400 ALL per square meter.
According to these figures, the value of the 41-story tower on Zhan D’Ark Boulevard exceeds 5 billion ALL. Likewise, the second tower, also 40 stories high on Muhamet Gjollesha Street, carries a similar valuation.
As per the call, these towers will be utilized for offices, residences, services, commercial purposes, and underground parking. According to Albanian state reference prices, ‘the price per square meter for commercial activities and services in the Tirana Municipality is twice the price of residential areas.’
This implies that through this bidding process, the Albanian government is allocating private entities at least 150 million euros for construction on public property.
This figure could rise further in the next two to three years upon project completion, explains economic expert Eduart Gjokutaj.
The former advisor to the Ministry of Infrastructure’s Cabinet also highlights another advantage.
He emphasizes that government contracts involving the privatization of state-owned property and land present unique opportunities and stability that can bring transformative benefits to businesses investing capital from various sources.
By securing government contracts, Gjokutaj notes, businesses have the potential to tap into sustainable and diversified income streams, enter profitable markets, and capitalize on long-term success opportunities.
However, this potential benefit for private entities in non-democratic countries also comes with risks.
‘In circumstances where the leadership of institutions overseeing financial matters and the oversight of these construction projects is influenced by political patronage, there is a current risk that the costs associated with these building projects serve as a form of ‘diplomatic pouches.’ Criminals could potentially launder large sums of money through a single project by masking illicit funds within these government-partnered projects, which are presented as projects of public interest.’ – Eduart Gjokutaj.
The open competition launched on June 4 is expected to conclude by September.
Conclusion
At a time when Tirana is considered overdeveloped and skyscrapers have continued to proliferate in recent years, it appears the government is pressing forward with their construction plans, including on state-owned properties. The call from the National Agency of Territorial Planning underscores this by inviting private entities to build private towers in strategic locations within Tirana, in exchange for constructing office buildings designated for state use.
