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High-level corruption cases in the Western Balkans and Turkey

Public-private partnership for waste incinerators - High-level corruption cases in the Western Balkans and Turkey

Public-private partnership for waste incinerators

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Introduction

The Albanian government awarded contracts to build three waste-to-energy incinerators through public-private partnership investment schemes in the municipalities of Elbasan (2014), Fier (2016) and Tirana (2017). The total value of the three incinerators amounts to approximately €178 million.

Country
Albania
Sector
Public contracting, Environment and land
Offence
Abuse of power
Phase
Indictment filed

Description of the case

The Albanian government awarded contracts to build three waste-to-energy incinerators through public-private partnership investment schemes in the municipalities of Elbasan (2014), Fier (2016) and Tirana (2017). The total value of the three incinerators amounts to approximately €178 million.

In all three cases, the companies awarded the contracts by the government were the sole bidders, and the winner for Elbasan submitted unsolicited proposals and attained a contract without a tender process. Key individuals in each company are closely linked to each other through business partnerships.

Furthermore, the opposition Democratic Party accused the government of clientelism, alleging that Arben Ahmetaj, who is a former minister for finance and economy and a high-profile member of the Socialist Party, is involved in the deals through Klodian Zoto. Zoto is a key entrepreneur pulling the strings of the companies that were declared winners of the bids for the three incinerators.

Particularly concerning are the waste management issues that have plagued Fier, which is the second largest city in Albania. The landfill used for waste deposits, which is located on the outskirts of the city, has exceeded its capacity. In response, the municipality of Fier declared an ecological emergency in 2015.

In July 2016, the Ministry of the Environment announced a call for tenders to build the incinerator in the county of Fier. The concession was based on a build-operate-transfer (BOT) contract valid for six years at a cost of approximately €27.3 million. The electric production capacity of the incinerator was expected to reach 3.8 MW per day.

The sole bidder, which was a joint venture formed by Integrated Technology Services sh.p.k. and Energy 2 S.r.l., was declared winner of the tender in September 2016 and work was set to start in 2019. Notably, however, the company lacked an environmental permit.

Despite Fier’s critical ecological situation, the citizens in the area affected by the construction of the waste incinerator have strongly opposed the government’s initiative and so have many non-governmental organisations.

Also, despite requests from Albanian civil society organisations, the incinerator contracts have not been made publicly available as per legal requirement.

Furthermore, it is not clear whether any of the managing the three incinerators have a contract for electrical power production and distribution with the Albanian electricity power distributor. The issue of the waste-to-energy incinerators was raised in the EU progress report on Albania for 2019. The report considered the development of the incinerators in contradiction with the EU Waste Directive, which promotes recycling plants instead of incinerators.