This figure is not at all dropping, as the left wing government promised when it came in power in 2013, thus showing that the role of the private sector as partner is becoming very important, unable for the latter to offer the public the services that it requires. This practice officially started in 2004 with the first and the most important concessionary agreement: “The construction, operation and transfer of Mother Teresa Airport”.
In fact, this year marks only 0.6% of the total number of these contracts that the state started to enter with the private sector for particular services. Meanwhile, according to the National Agency for Concessions, these contracts culminated in 2009 with 30.1% of contracts, followed by 2013 with 27.1% of the total. 2013 was an electoral year. That year, the left wing, which at that time was in opposition, vowed that once it came in power, it would cancel the concessions granted by the right wing. But this doesn’t seem to be the case, because in the following years, not only there wasn’t any cancellation of contracts, but new contracts were signed.
Namely, year 2014 registered 1.8% of the total contracts that were signed, 2015 registered 3.6% and last year, 2016, registered 4.8%. These figures indicate a growing trend of the state requesting services from the private sector in order for the latter to serve to the public.
What are the domains? They are numerous and many of them cover important sectors, such as the sector of energy, transport or infrastructure, but now, concessions have also been granted for special sectors such as tax collection, healthcare, environment, agriculture and also internal affairs, thus expanding the range of public services. This has happened despite the fact that the International Monetary Fund has warned the government of being cautious with the concessionary agreements that it signs, because they may constitute of heavy burden for the state budget. According to this institution, the 55 concessions that have been recently endorsed have a financial bill which is equal to 7% of the Gross Domestic Product.
Meanwhile, the total amount of payments that the government is planning to make to concessionary agreements must not exceed 5% of tax incomes collected the previous year. This means there is always a limit on the money that they must be allocated from the state budget, otherwise, this may be a real threat for the state budget. Thus, if this is exceeded, the state must do more to collect incomes in order for the budget to go back to its previous state.
INVESTMENTS
“1 billion euros”, the latest
concessionary project of the government
“1 billion euros” may be easily considered as the latest concessionary project launched by the government. The Prime Minister has declared that this project consists of 125 public works which will be delivered by the private sector, but paid by the state.
Initially, the money will be paid by the private sector, but gradually, they will be compensated by the state thanks to a special compensation program.
COST
2017 starts with two concessionary agreements
2017 starts with the application of two new concessionary agreements by the government. These two concessions fall into the “Public-Private Partnership”, which according to the 2017 Budget, will have a total cost of 110 million euros. Namely, this includes the concession for the construction of a plant for the treatment of wastes in Fier and another concession which will be granted by the Ministry of Health to offer hospital laboratory services for the from 2017-2026.
Ministry of Finance now signs off the concession contract
If up until yesterday, ministries and different public institutions had the power to finalize concessionary contracts, this is no longer the case now. A decision issued by the government no longer allows other public institutions to sign off concessionary contracts, leaving the ministry of Finance as the only institution which has the power to do this.
“The Ministry of Finance assesses and approves all the concessionary and PPP projects”, the decision in question states, adding that it evaluates concessions based on the fiscal implications which they may have and also the sustainability of public debt. In other words, they must not pose a threat of exceeding the budget limit cost. The government’s decision also says that if there are further changes in the feasibility study after the request has been sent for approval to the Ministry of Finance, contractual authorities must submit the request once again in order to verify any possible fiscal implications.
“The concessionary/PPP projects which are accompanied with changes or transferred in line with the law on concessions and public-private partnership, must be submitted to the Ministry of Finance”, the abovementioned decision says.
Thus, the government is the only one to sign off concessionary agreements, but at the same time, it must also review the existing ones which may have been signed by previous governments.
“Any amendment or transfer of the concession/PPP contract made in line with the law on concessions and public-private partnership must be submitted to the Ministry of Finance for preliminary approval. The ministry assesses the possible implications, direct or indirect ones on the budget of the contracting authority, the state budget or changes that may relate to the financial support”, says the decision on concessions. We must recall that so far, ministries have been independent in signing off contracts in exchange of offering different services, but it seems that the “monopoly” now belongs to the ministry of Finance, with the aim of controlling all the possible costs of concessions. According to official figures, cost for concessions until 2025 will amount to 68 billion ALL.
State to pay 7,3 billion ALL this year for concessions
The amount that the state is planning to pay for concessionary contracts this year is around 7,3 billion ALL. This amount will be allocated for 6 contracts.
For the service of basic health check-up, which is valid until 2024, the government will pay 7,82 billion ALL.
Meanwhile, 9,47 billion ALL will be allocated for the service of dialyses for the same period. This is followed by the hospital lab services, which started this year and for which the state will pay 10,7 billion ALL until 2025. All of this indicates that the healthcare sector has, up until now, received the biggest part of the “pie”.
Healthcare is followed by the Ministry of Finance, which has to pay for the service of customs scanning and the cost for this is 13.5 billion ALL until 2029.
