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PUBLIC PRIVATE PARTNERSHIP AND

CONCESSIONSIN ALBANIA

LEGAL AND INSTITUTIONAL FRAMEWORK

CONCESSIONS TREATMENT AGENCY ALBANIA

Erion Mata

Director

Directory of Identification and Promotion of Concessions

PPP Legislative History in Albania

PPPs in Albania have been implemented since 1992, after post-communist period in a large scale and proper principles:

Privatization of enterprises; Public Procurement Contracts, executed under the law on public

procurement no. 7971/1995 Concession Contracts, executed under the law on concessions and

participation of the private sector in public infrastructure no. 7973/1995;

Others such as lease, usufruct or other models on property use.

Private Public Partnership

Extent of Private Sector Participation Low High

Works &Services Contracts

Management &

Maintenance Contracts

Operation & Maintenance Concessions

Build Operate Transfer

Concessions

Full Privatization

Introduction to a new legal framework

The approval for a new legal framework become necessary for provision of:

A serious private investment participation on public sector;

Transparency, efficiency, non-discrimination and equal treatment of the private sector during the bidding procedures.

Growth of efficiency on public investments.

Creation of a solid base regarding the successful implementation of concession projects.

Competitive dialogue and requirement of potential financial analysis before entering into the project.

Legislative development

On 2006, the ministry responsible for the economy, with the assitence of

IFC and local legal consultancy, started to work on a new project which

scope was “strengthening of the institutional capacity within the

Government of Albania in order to process and award concessions in a

transparent and effective manner.

• Law “On concessions”, no. 9663, dated 18.12.2006 (amended);

• DCM, No. 27, dated 19.01.2007 “On the adoption of the rules forthe evaluation and granting of concessions” (amended);

• DCM, No. 150, dated 22.03.2007 “On organization and functioningof ATRAKO – Concessions Treatement Agency.

Expectations from the Legislative development

• Any concession project is subject to competitive bidding

procedures that implies a more efficient construction of the

project by the private sector; additional revenue generation by the

private sector; creative and innovative solutions to technical

problems in the project; faster delivery of the project; life-cycle

optimization of the project(integration of design, build, finance

and maintenance).

• Unsolicited proposals coming from the private sector are evaluated

in conformity with the public interest, sectorial strategic plans and

the best value for money principles.

• Exemptions from the above rules are applied on national security

projects or for short period of time in case an actual concession

contract has been early terminated, by the Contracting Authority.

Concept of Concessions

The New Concession Law defines a concession as the agreement between

the Private Sector and Contracting Authority and which provides for the

terms and requirements, in terms of which the Concessionaire provides an

economic activity which would otherwise be carried out by Contracting

Authority related to concession project, management contract or other

public services.

Upon such concept the Private Sector:

• assumes all or substantial part of risks related to such economic activity;

• receives a benefit by way of either direct payments paid by or on

behalf of contracting authority or tariffs or fees to be charged,

received or collected from users or customers or a combination of

such direct payments and tariffs or fees.

Eligible Sectors for implementation

• Transport (railway system, rail transport services, ports, airports, roads,

tunnels, bridges, parking, public transport);

• Energy generation and distribution of electricity and heat;

• Water and water waste sector, water production and distribution, water

and wastewater treatment, wastewater collection and distribution,

sludge disposal and treatment, irrigation, drainage, dredging, canals,

dams;

• Solid waste collection, transfer or disposal;

• Telecommunication;• Education and sport; Health; Tourism and culture; • Prison infrastructure

• Land reclamation projects, industrial estates, housing, government

buildings, IT network and database infrastructure;

• Natural gas distribution; and

• Management contract or outsourcing of public services including those

related to sectors specified above.

The Concessions Agency of Albania - ATRAKO

ATRAKO, is established by DCM no. 150, dated 22.03.2007, as a legal entity underthe competence of the Minister of Economy, enjoying the following competencies :

• On Strategic Level - to assist in the promotion of concessions in the Republic of Albania in a transparent manner and to ensure an equal and professional approach to concessions by the Contracting Authorities;

• On Project Level - to assist and advice the Contracting Authorities in:

(i) the consideration and evaluation of offers for concession projects, both

solicited and unsolicited bids, particularly in relation to their profitability

and feasibility;

(ii) drafting of the request for offers, pre-bidding documents and other acts

related to the bid (including also the Concessionary Contracts);

(iii) the evaluation of the offers and announcement of best offer;

(iv) the negotiations and the signing of the Concession Contract;

The Concessions Agency of Albania

• to promote the implementation of the best practices in the

application of the procedures and rules of Concessions, particularly

with regard to the procedure of unsolicited offers.

• to provide, upon the request of the Contracting Authorities,

expertise for monitoring concession contracts and advice for such

issues such as amendments, supplements and refinancing of such

contracts;

• to keep a data base for the concession projects under consideration,

evaluation or implementaion.

• to take part and assist with the drafting and unification of standard

documents (including contracts), as well as with the methodologies

for comparing concession projects.

• to organize training for the staff engaged in the implementation of

concession projects.

• to organize consultations in the concession field between the

private sector and the important actors in this field.

Institutional Relations of ATRAKO

Council of Ministers

Minister of Economy, Trade and Energy

Privatization Department

Licenses & Concession Department

State Aid Department

Public Procurement Commission

Procurement Advocate

Ministry of Finance

Concession

Unit

ATRAKO

Contracting Authority

Concession Projects

Transport: The Ministry of Transport has initiated based on unsolicitedproposals procedures on granting a concession regarding :

• the motorway Thumane – Rrogozhine (Launched in 2010) • the containers terminal in the port of Durres (Launched in 2010)• construction and operation of small marinas. (Launched since 2008)• BOT of periodical technical control of vehicles. (Signed in 2009)

Administration of public services: the ministry of internal has officiallypublished the contract concession regarding the production of ID-card andBiomethric Passports of the albanian citizens. (Signed in 2008)

Financial Control : Ministry of Finance has signed the concession contract for implementation of production and implementation of the control system of Fiscal Stamps.(Signed in 2010)

Technology : Ministry Innovation and of Information and Communication Technology is preparing the solicited proposal for concession on National

Broadband Network in Albania. (Will be launched at 2011)

Agriculture : the ministry of agriculture has signed a concession contract on exploitation of 1000 ha for olive cultivation. (Signed in 2009)

Economy: Ministry of Economy,Trade and Energy started the concession procedures for implementation of Free Economic Zone in Shengjin and Spitalle

(Launched in 2009)

Major Difficulties

o Monitoring of Contracts

o Difficulties of private sector funding.

o Difficulties found within the administrate.

o Lack of professional trainings.

Needed Support

Professional Trainings (ATRAKO)

Foreign expertise in technical and financial evaluation of projects .

Participation in Experience Sharing and International Conferences

Conclusions

At the end, should be emphasised that:

There is an increase of interest from the private sector on the

participation of the public investments, due to the new legal

framework that ensures transparent procedures and guarantees a

succesfull implementation of PPP-s.

THANK YOU FOR YOUR ATTENTION!

Adress: Blloku “Vasil Shanto", Rr. “Viktor Eftimiu”, Tirana, Albania

Tel: +355 4 274745, Fax: +355 4 222-3587

e-mail: sekretaria@atrako.gov.al

website: www.atrako.gov.al