7 months until the elections scheduled for 25 April, the opposition leader, Lulzim Basha, confirmed his determination to cancel concessions/PPPs, which according to him and the DP, are corrupt. However, while Basha deems that this decision will bring positive results in terms of welfare, experts advise “not to get too excited”. According to them, experience has shown that the cancellation of PPPs in the past has been used to favor the narrow interests of political parties, and it has resulted in major state budget costs and the impoverishment of taxpayers.
Opposition leader, Lulzim Basha, reiterated his promise to cancel Public Private Partnerships, also known as PPPs.
On 13 September, through a social media post, he said that canceling corrupt PPPs would bring economic development.
“One of my primary commitments is to return Albanians the opportunity of a free market and freedom of fair competition in every sector of the economy. The fight against corruption, cancellation of corrupt PPPs, reduction of taxes and the flat tax of 9% will make Albania a country of large and serious investments, which alongside economic development, will increase the number of new jobs, with dignified salaries.”, – Basha wrote.
This is not the first time that the opposition leader, Basha, has promised the cancellation of PPPs, considered as corrupt by DP, but his determination has been confirmed with the decree of the future elections date.
Previously, the DP called for banks to refuse financing PPPs, as they would be cancelled once they came to power.
However, as it is known, the cancellation of concessions or PPPs risks loss of arbitration trials by the Albanian State.
Earlier researches by “Faktoje” show that arbitration trials tell a history of failures for Albania in financial terms.
In just two months, Albania has been billed with over 150 million euros by international arbitration tribunals. After the 109 million Euros for Francesco Becchetti, the state budget will have to pay another 44 million dollars in compensation to Copri and Aktor companies.
Albania, according to the 2019 annual performance report by the Supreme State Audit, has lost 10 trials in International Arbitration Tribunals in the last decade.
“Faktoje” asked for more information by Jorida Tabaku, former MP of the Democratic Party, regarding the DP approach to the cancellation of PPPs.
“The “follow the money” principle will be implemented for all these elements, deriving from a solid plan presented by the DP in September 2018 on the fight against abusive and corrupt PPPs.”- Ms. Tabaku said.
According to Tabaku, the DP is convinced that legal violations, identified in these contracts, constitute corrupt scenarios.
“The case of incinerators, where legal practices clearly stipulated in the legislation have been violated, cannot burden the state budget. There are clear leads linking crime and politics, thus the criminal responsibility will fall on the parties engaged in corruption”, Tabaku stated among other things.
Can PPPs be canceled so easily? Experts opinions
Ornela Liperi, a journalist and economics expert, told “Faktoje” that it is not so easy to cancel PPPs.
“In principle, one cannot cancel them. The same happened with SP, when they came to power and couldn’t cancel concessions made by DP. Moreover, many of these concessions have received loans from banks. The damage will be inflicted on the budget. The same applied to the case of Becchetti, who will be paid by all of us, the taxpayers. Experience has shown that contracts with the government are difficult to cancel in arbitration.” – Liperi said.
She suggested another move.
“It would be more credible if he promised to bring before the justice people who drafted such contracts, which for the most part cause major damage to the budget. As it turns out, all the financial risk is borne by the budget. The will to hold these people accountable is not evident, in order for such contracts not to be drafted anymore!” – Liperi said.
Zef Preçi, an economics expert, said the cancellation of contracts requires strong political will.
“It takes responsible expertise that is based on good global experiences, transparency and strong motivation of the public administration and the political elite by the public interest.” – Preçi said.
“Unfortunately, it is likely that not only unilateral cancellation, but also public attacks or political allegations can be (mis)used by interested parties affiliated with political beneficiary circles of the country, which have served as a guarantee for contracts, thus penalizing the state budget”.
According to him, there is a number of other ongoing cases, related to these years bad governance, that foreign investors, suspected or not of corruption, upon entering into PPP contracts, turned to arbitration tribunals and are waiting to penalize Albanian citizens due to institutional shortcomings and corruption of the stated administration.
PPPs in Albania
The 2020 U.S. Department of State’s Investment Climate Statements cited PPPs in Albania as an issue.
“Reports of corruption in government procurement are commonplace. The increasing use of public private partnership (3P) contracts has reduced opportunities for competition, including by foreign investors, in infrastructure and other sectors. Poor cost-benefit analyses and a lack of technical expertise in drafting and monitoring 3P contracts are ongoing concerns.” – was stated on the report.
One of the most contested concessions was that of sterilization, which, upon public pressure, was amended to reduce costs and became the subject of an investigation by SPAK.
In the beginning of the year, the Supreme State Audit drew the Government’s attention to concessions or PPPs, as a result of the high risks they pose to the state budget.
The former head of SSA at the time, Mr. Leskaj said that the Supreme State Audit had audited 6 concession/PPP projects, which had issues with the feasibility studies, drafted by the contracting authorities, and the implementation of their contracts in the future would generate ineffective, inefficient and uneconomical costs.
Meanwhile, in its analysis, SSA had found that the public sector had undertaken a significant part of the risks for these contracts, with direct effect on the State Budget.