News 16 Jul 14
Faced with growing public debt, the government plans to offer concessions to private companies to construct new highways and maintain those already finished.
Albania’s Minister for the Economy, Arben Ahmetaj, told a parliamentary commission on Tuesday that the country could no longer afford to pay for new motorways on its own and would turn to the private sector for investment.
“Because of the financial situation that we have inherited we have found it impossible to provide this service,” he told parliament on Tuesday.
“The alternative way is to bring in private operators, which offer a quality service at a reasonable price,” he added.
Ahmetaj told the parliamentary commission that the government had decided to set up private-public partnerships to complete a number of highways that it could not finance itself.
The previous centre-right government launched a number of large-scale infrastructure projects designed to improve the road network over the past eight years.
However, owing to budget shortfalls, many of these roads have been left unfinished while allegations of corruption and cost overruns have dogged further construction.
A loose fiscal policy, the depreciation of the national currency, the lek, and the accumulation of $670 million in arrears to contractors, have taken Albania’s public debt well above the ceiling of 60 per cent of GDP.
According to the World Bank, if the government does not undertake immediate structural reforms, Albania’s public debt-to-GDP ratio will reach 73.5 per cent in 2015 and stay above 72 per cent over the medium term.