Rama: €250M Arbër Highway Project to Start in September

During a campaign stop in Peshkopi yesterday, Prime Minister Edi Rama promised the inhabitants of Dibra that construction work on the Arbër Highway will start in September. The highway is supposed to connect Tirana with Dibra and then continue to Skopje, the capital of Macedonia.

The Rruga e Arbrit, or Arbër Highway, is an investment made by the government in the context of Prime Minister Rama’s “One Billion Euro Plan,” which Rama is planning as infrastructural investments should he win a second mandate. All projects in this plan, which has not been discussed with the IMF, will be financed through public–private partnerships, which, as Exit has explained before, are very cost-ineffective and expensive forms of financing.

After a Chinese investor pulled back from the Rruga e Arbrit project, construction company Gjoka Konstruksion made in April an unrequested offer to build the project, including 69 km of highway and a tunnel, to be completed within 46 months.

The total cost of the project would be €250 million, with €190 million invested by the company and €60 million co-financed by the state. The company would take care of the maintenance of the road and tunnel for 10 years, and in return have the right to levy a toll on the highway of €4 per car.

If Gjoka wants to earn back its investment, this means that at least 13,000 cars per day will have to use the road for ten years after it has been finished.

The government gave Gjoka a 10% bonus should it decide to open a public procurement procedure, basically ensuring that the company would win the tender.

This now indeed seems to be the case. As Prime Minister Rama stated in Peshkopi:

This week the Ministry of Finance will give its approval to the financial scheme [a public–private partnership] of the Rruga e Arbrit. The company that has made the project [Gjoka Konstruksion] has been made a proposal [the 10% bonus], the project has been verified and once it has been approval, the competition will be opened [and won by Gjoka].