Runner up gets Albanian motorway concession after crying foul over corruption

Runner up gets Albanian motorway concession after crying foul over corruption
By bne IntelliNews September 8, 2016

Albania’s public procurement commission has reversed the decision to award a concession for Albania’s first toll road to a tie-up led by Turkey’s Vendeka Bilgi Teknolojileri after reports of irregularities. Instead, the concession will go to a rival consortium headed by United Arab Emirates-based Catalyst Viva Das General Contracting, though this has been disputed by the transport ministry. 

Lack of transparency resulting in corruption is one of the biggest problems of the public procurement system in Albania. E-procurement was introduced in 2008 as a tool for fighting corruption by increasing transparency, but this has failed to eradicate corruption altogether. Perceptions of corruption in Albania are still high. 

The deal for the construction, operation, maintenance and rehabilitation of the Milot-Morine highway section was initially given to the Vendeka Bilgi Teknolojileri consortium. However, Catalyst and its partners lodged an appeal to report irregularities and the deal was subsequently cancelled. The commission then decided to make the tie up of Catalyst, local construction companies Kastrati and Salillari, Greek Bee Tech and Viplap Ateve the new winner of the 30-year concession contract, news provider Monitor reported on September 7.

The second ranked consortium said in its appeal that the Turkish led consortium did not meet the criteria and had offered a higher price for the contract.

Vendeka Bilgi Teknolojileri promised an investment of €320mn and asked to be subsidised from the Albanian budget with €5.6mn if there was not enough car traffic to be taxed. On the other hand, the Catalyst-led consortium offered investments of €217mn and demanded subsidies of around €5mn.

After the public procurement commission disqualified the Turkish company, the ministry of transport immediately contested the decision, Monitor said on September 8. Official transport ministry sources confirmed that the ministry had disputed the decision on the grounds that the appeal from the second party in the tender was accepted 10 days after the declaration of the tender results while the deadline is just three days, according to Monitor.

Another argument from the transport ministry is that the Catalyst-led tie-up, which was initially ranked second, does not meet the requirements set by the International Finance Corporation (IFC), which is a consultant in the process. The IFC has estimated that the Turkish company meets many more criteria than the other consortium.

The ministry is now waiting for a response from the procurement commission.

This will be the first toll road in Albania, with the fee set at €5 for cars and higher for trucks. According to government calculations, the costs for road maintenance will range from €8mn to €12mn per year.

The process of selecting a company for the Milot-Morine section has lasted more than a year. The first tender failed as it was deemed against the public interest, according to the transport ministry, while the deadline for submitting offers in the second tender was extended.

In addition to the controversy over awarding the consortium, the project has also met with opposition from local residents. In mid-August several hundred citizens from the northern Albanian district of Mirdita held a protest against the planned introduction of a toll on the Milot-Morine motorway section.

 

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