From: Exit Staff
Exit Explains: PPPs in 2021 to Exceed EUR 825 Million, Government Forecasts Better Revenue than IMF

In addition to the PPP concessions that the Albanian government has already engaged in, it has big plans for more in 2021.

According to economist Azmi Stringa, the new concession contracts that are lined up will bring the total value to over EUR 825 million, an increase of around EUR 340 million.

In 2021, it’s estimated that the government will pay around EUR 119 million from the state budget just for PPPs. this includes healthcare concessions, road concessions, and of course, incinerators.

This expenditure will limit government investment in a number of areas, especially health and education.

Stringa said: “Health payments to the concessionaire are higher than the investment fund. So if the payment for concessions is x amount, the investments made are less.”

In addition to this, the government is passing a normative act which will give it the chance to use money from the 2021 budget as early as November. The current law means that procurements for a budget year can only be made after the year as started. For example, with the budget revenue of 2021, the government can only procure after January 1.

By passing the new act, the government can start to procure tenders in November 2020 using money designated for 2021. This could be seen as a move to engage in as many PPPs as possible before the April 2021 general elections.

The Albanian government has also increased its forecasts for final revenues for 2020 and 2021, surpassing what the IMF predicts. Albanian figures predict some EUR 700 million more in revenue than was estimated by the International Monetary Fund.

These forecasts are unrealistic for both 2020 and 2021. The Albanian government has predicted that 2020 and 2021 will be the best years in history for revenues collected in relation to the GDP.

For example, in 2019, government revenues were as much as 27.4 percent of GDP. The IMF agrees with the government.

The differences start in 2020. The government claims that in 2020 revenues will increase to 28.2 percent of GDP, while the IMF says it will fall to 24.5 percent.