From: Karlo Kuçi
Follow the Concessions…

“Follow the money,” said the informant to Bob Woodward of the Washington Post after he wasn’t able to unravel the Watergate scandal. But when he followed the money trail, this led to the resignation of US President Richard Nixon.

“Follow the money,” said General Carlo Alberto Dalla Chiesa to his collaborators investigating the mafia.

“Follow the concessions,” we can say today to the head of international institutions wanting to understand why the Albanian government suddenly has started to enact debatable policies.

Analysts have been unable to find any kind of strategy, plan, or public interest motive behind any of the public initiatives undertaken so far by the Rama government.

Almost all these initiatives are, in fact driven, by private interests, to “fatten up” clients through concession contracts or PPP projects. These are expensive, long contracts, ensuring to oligarchs and cronies, often hidden behind offshore companies, a steady source of income under the pretext of offering a high-quality service in which the government needs to continually invest, and which the government, due to public debt control, cannot finance by itself.

Such has been the case so far with the law on strategic investments — which in practice is applied only to Albanian developers, allowing them to seize many prime properties, in particular lands along the coast, which they couldn’t get hold of by other means. A similar approach was taken regarding  public schools concessions in Tirana, or the “One Billion Project” for the construction of infrastructure projects. The same happened with the different concessions of the Ministry of Health, including the general screening of the population, hemodialysis services, sterilization of surgical instruments, and medication control stamps. And the same story with the incinerators and landfills, bunkers turned into museums, and the bar inside the Butrint National Park.

A personal friend for every public project or one or more public contract for every personal friend – contrary to any strategy or planning and, above all, against the public interest. The PPP method also ensures the government the means to justify its subjectivity in selecting the winners, by giving bonus points in the public procurement to the company who has presented the initial “unsolicited” proposal.

Naturally, the business world doesn’t stay put, and as soon as it gets an idea to secure some lofty contract or political favours, it comes running to propose a new PPP project, which is retroactively introduced to the people as a necessity to solve the “problem” without any costs for the government. But we all know that the costs for the public budget come afterward, and they are sure to come.

Rama’s method, perfected every day, counts on the “social” issues that citizens raise in public discussion forums, such as his Facebook page or co-governance platform. These then become the topic of the Prime Minster’s next monologue, announcing to the people that soon he will have a solution to the problem, which will advance Albania’s position in the world regarding the issue at hand.

Meanwhile, the pertinent ministries secretly asks for an “unsolicited request” for a PPP project through which the problem will be “solved.”

Based on this request, the responsible ministry undertakes all the “evaluations” prescribed by the law, and then the Council of Ministers approves a decision to open the public “competition”, always awarding to the “unsolicited request” the necessary bonus points. As a result, the usual 2–3 other offers always fail to make the cut (because they are often incomplete), and the “unsolicited request” is easily – and according to all legal procedures – picked as the unsurprising winner.

The preparation phase of a PPP demands a deep analysis of the problem at hand, evaluation of the costs and benefits for the public finances, and above all demanding an evaluation of the real risk of passing the enterprise from the hands of the state to the concession holder’s.

Because the international philosophy embodied in the Albanian legal system, conditioned by the International Monetary Fund, foresees that a project can be given through concession only when the risk of such enterprise changes hands from the state to the private actor.

Until now, this has never occurred because of the voluntary or involuntary ignorance of bureaucrats who have signed different studies and evaluations. In fact the opposite is true: the risk of different concessionary projects has been kept entirely in the hands of the state.

But the preparation of these documents, even though with intentional shortcomings in their logic, leaves always leaves a trail, and sometimes slips into the public domain, even if distorted.

This leaked information shows that the Ministry of Finance has ween working on new concessions in the fiscal field, such as the concession for monopoly on customs services or the renewal of the infamous VAT concession, attempted once during the previous government, and temporarily abandoned after the furious objection of the International Monetary Fund.

An attentive reader may understand Edi Rama’s rant in front of the big taxpayers of the country, in which he warned that within a few days he would forever eliminate from the Port of Durrës “the disgusting characters, badly dressed that play the role of the intermediary.”

An attentive reader may also understand the sudden need for the lowering of the VAT threshold to include 100.000 small businesses (a five-fold increase of the number of entities subjected to VAT). This is needed to justify the future concession to a private enterprise, who suddenly has to overtake this vital work from the state, because of the argument that in the current circumstances the tax office doesn’t have the necessary resources to handle it – naturally in exchange for a large share in the VAT.