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Ending impunity for grand corruption in the Western Balkans and Turkey

Waste incinerators - Ending impunity for grand corruption in the Western Balkans and Turkey

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
Offence
Abuse of power; Active corruption of officials
Phase
No criminal procedures

Timeline

Suspicion
Official detection
Prelim. investigation
Investigation
Settlement
Indictment filed
Court accepts case
1st instance procedure
1st instance verdict
2nd instance procedure
2nd instance verdict
3rd instance procedure
3rd instance verdict
Extraordinary remedy
Pardon
Enforcement
No charges have been submitted
No criminal procedures

Main Details of the Offence Committed

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.

Abuse of power; Active corruption of officials; Passive corruption of officials

Decision of the Council of Ministers no. 175, dated 19 January 2011

Ahmetaj, who is a former minister for finance and economy and a high-profile member of the Socialist Party, is claimed to be involved in the deals through Klodian Zoto. Zoto is a key entrepreneur pulling the strings of the companies declared winners of the bids to operate the three incinerators.

2014-2017

Public contracting; Environment & Land

Jurisdiction(s)

An environmental civil society organisation sued the company over the construction of the waste incinerator in Fier. The lawsuit was mainly based on the company’s lack of an environmental permit. However, the Administrative Court of Tirana dismissed the lawsuit in June 2019.

Procedural Details

No criminal procedures

The Supreme State Audit Institution has conducted three audits directly or indirectly involving the waste incinerator in Fier. The first was an audit of the performance of Fier municipality’s waste management, published in June 2013. The audit urgently recommended that Fier address its waste management issues. One of the primary suggested approaches was waste incineration.

In December 2018, the institution published its second performance audit on waste management. The audit found a series of irregularities concerning the implementation of the incinerator project. However, it only made administrative recommendations and did not initiate any legal action.

The third audit raised concerns over undeclared payments for the waste incinerators in Fier and Tirana in the context of preparing the state budget for 2018.

The Prosecution has not intervened ex officio in what has been made public regarding the matter, suggesting issues of political influence on the prosecution’s work.

Outcome of the Case

No charges

None

None

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