Albanian National Theater Building – Suspicious Tender Tailored to Government’s Usual Contractors

The recently launched call for bids for the design and construction of the new National Theater building, and the development of the area around it, shows the tender is tailored to government’s usual favorite contractors.

The call will be open until September 19, 2019.

The government is set to develop the area through a special law from December 2018, which violates the Constitution and a number of other national laws.

The initial special law had predetermined Fusha shpk as developer – one of the companies closely associated with the Rama government. The law was then amended in its current version, following EU pressure and President’s refusal to sign it. (Click here for a history of the Special Law on the National Theater).

The procedures employed by the government to ensure that Fusha shpk is the winner are unprecedented, not prescribed in any law and outside standards for public works. They involve the awarding of public land to a private company, and the  construction of private and public facilities within the same project. The terms of reference are confusing, unclear and they restrict any competition.

One of the main qualifying criteria for companies requires them to have “developed similar projects over the last five years, the overall total of which shall not be less than 40 percent of the total construction area (in square meters) offered in the bid.”

This requirement is arbitrary, undefined and open to abuse.

The developer has to build two types of objects: a cultural one, the theater building; and a private commercial-residential one.

In the narrowest sense of the term, there is only one “similar project” developed – that of the National Stadium. The government awarded to one of its favorite companies, Albstar shpk, a contract to build a public facility (stadium), as well as residential and business facilities (stadium tower). Is this sense, Albstar shpk is the only company that can qualify for the National Theater tender.

If “similar projects” would be interpreted in a broader sense, to include construction of social and cultural objects, then 4 or 5 companies might qualify: Albstar (National Stadium),  Eurocol (Olympic Park), Agicons (reconstruction of Opera and Ballet Theater), and Edil-al (reconstruction of Opera and Ballet Theater, and Art Turbina Theater). Fusha shpk, which will reconstruct the University of Arts, might also qualify.

If “similar projects” is to be interpreted in the even broader sense of “similar facilities”, practically any company that has built large residential and commercial buildings could qualify for the National Theater tender.

However, the most restrictive requirement is for bidding companies to own, or have agreements with owners for the 40 percent of the private land included in the site development project.

Theoretically speaking, only two companies can reach such an agreement since the total allows for only two 40 percent shares, and such deals are usually exclusive.

The public and private land designated as a construction site has a total area of 9,768 square meters, of which 8,465 are public land and 1,303 are private.

Bidding companies should own or have agreements to develop at least 522 square meters (40 percent of 1,303) of the private land.

It is a well-known fact that Fusha shpk owns 289.1 square meters and has been in negotiations with other owners to acquire additional land.

This fact favors Fusha shpk as bidder. On the other hand, were Fusha shpk not to participate in the tender with its 23 percent of land, competition would be limited to only one company theoretically able to attain rights for 40 percent of the private land.

In other words, if Fusha shpk makes no bid offer, only one company can obtain rights to 40 percent of the total private land out of the remaining 67 percent. There is no room for two competitors without Fusha shpk, as they would need 80 percent of private land.

Based on these two “40 percent” qualifying criteria it can be assumed that either there will be two bidders for the National Theater project, one of which will be Fusha shpk, or only one bidder, including the possibility that it could be Fusha shpk.

In fact, a strict assessment of the terms of reference suggests that there can be only one “competitor”: a consortium between Fusha shpk and Albstar shpk.

Considering the preferential relationship at the margins of clientelism between these two companies and Prime Minister Edi Rama, it is reasonable to predict that the Fusha shpk – Albstar shpk consortium will be the winning bidder for this project.

A review of the bid offers evaluation criteria shows that they are subjective, and the evaluation panel has complete freedom to decide according to their subjective judgments, with no objective tool or methods to assess the bidders’ compliance with the terms of reference.

70 percent of the bid offers’ evaluation will rely on technical indicators. A close reading of these indicators proves how highly subjective they can be. For instance: the relationship with the urban context and public space; the relationship between outer spaces and inner spaces; internal organization and orientation of internal spaces etc.

Another important implied criteria is that bidders should have a detailed project for the construction. The government has given companies about two months to submit the project, of which one and a half are in July and August, mostly vacation periods. In addition to designing the project, potential bidders will need to negotiate and reach agreements with landowners regarding land purchase and the project itself.

Meanwhile, Fusha shpk has already prepared a project, which the government used in its first attempt to award the public land to the company. Prime Minister Edi Rama and Mayor Erion Veliaj, subordinates of which will evaluate the bid offers, have both praised the Fusha project design.

Considering the short time for submitting offers, timing of the call for bids, designing the project, and bid evaluation criteria, Fusha shpk has a high advantage over any other potential company.

This raises suspicions that the call for bids is just an attempt by and for the government to appear in compliance with international standards of competition.

In this second attempt, Prime Minister Rama seems to be trying again to achieve what he failed to do in the first attempt, i.e. extralegally awarding the area around the National Theater to Fusha shpk to develop.

The only potential difference this time is that a Fusha shpk–Albstar shpk consortium might replace Fusha shpk.