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Tailor-made laws in the Western Balkans and Turkey

Law on Concessions and Public–Private Partnerships - Tailor-made laws in the Western Balkans and Turkey

Law on Concessions and Public–Private Partnerships

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Introduction

In 2013, Albania adopted Law no. 125/2013 on Concessions and Public–Private Partnerships (PPP). Article 7 of the law allowed a bonus of up to 10 per cent in the tendering process for unsolicited proposals for concessions in the energy sector. In 2015, an amendment (Law no. 77/2015, Official Gazette no. 132/2015) to the law expanded the bonus for unsolicited proposals from the energy sector to all areas subject to the law on concessions and PPPs. While the bonus was previously limited to concessions, the amendment included the same bonus for PPP contracts.

Country
Albania
Sector
Public contracting

Description of the law

In 2013, Albania adopted Law no. 125/2013 on Concessions and Public–Private Partnerships (PPP). Article 7 of the law allowed a bonus of up to 10 per cent in the tendering process for unsolicited proposals for concessions in the energy sector. In 2015, an amendment (Law no. 77/2015, Official Gazette no. 132/2015) to the law expanded the bonus for unsolicited proposals from the energy sector to all areas subject to the law on concessions and PPPs. While the bonus was previously limited to concessions, the amendment included the same bonus for PPP contracts.

This development triggered a boom of PPPs and concessions in Albania awarded to companies that submitted unsolicited proposals after the amendment in 2015. However, many contracts have been reported as highly suspicious. Concerns have been voiced over a lack of transparency and assessment of unsolicited proposals for PPPs and concessions. Although a legal requirement, value-for-money analyses of submitted proposals widely fail to be implemented (see here, here, here, here and here).

The media have revealed that corruption may have occurred in many of the concession and PPP projects approved under this law in sectors such as healthcare (see here, here and here) and road infrastructure (see here, here, here, here and here). A scheme has been detected in which numerous PPPs were awarded to newly established companies with ties to politics. An expert analysis found that in 2012 nearly 30 per cent of public tenders were awarded to new companies. In 2017, this figure had increased to 70 per cent, which shows the extensive links between politics and private companies (see here, here and here). The media have raised concerns about a number of companies that may have benefitted from these practices, including Fusha SHPK (a national theatre PPP), Evita SHPK (healthcare PPPs) and Investital LLC (the owner is linked to the former health minister Ilir Beqaj).

On 18 July 2019, Parliament adopted Law no. 50/2019, amending the law on concessions and PPPs again by limiting the scope of its applicability. The amendment removed the “up to 10 per cent bonus” in the tendering process and restricted the applicability of unsolicited proposals to the areas of ports, airports, electricity, heat and natural gas supply (see here and here). Albanian President Ilir Meta refused to sign the law and returned it to Parliament on 5 August 2019. However, Parliament repealed the president’s decree on 12 September 2019, rendering the amendment effective.