Ahmetaj: Public-Private Partnership will not increase public debt

Ahmetaj: Public-Private Partnership will not increase public debt
It’s not true that concessions known as Public-Private Partnerships will have an impact on the increase of public debt. Such fact was announced yesterday by the minister of Economic and Finance, Arben Ahmetaj before MPs, while defending the investments that the government will make next year through PPPs.

According to him, for technical reasons, these types of concessions will not be considered as a debt for the state and that the concerns expressed by the opposition for this are baseless. Ahmetaj said that the government will allocate 78 million USD for concessions next year. But, the International Monetary Fund does not agree with this. The Fund has advised the government to be cautious with the so called PPPs. “The ambitious agenda of the authorities for public investments through Public-Private Partnership (PPP) has significant fiscal risks”, says the leading financial institution in a statement issued on 2 October 2017. Meanwhile, the IMF also says that it’s important to strengthen the framework for the implementation of PPPs. “It’s very important that the Ministry of Finance should use its extended powers to evaluate and monitor the projects of PPP”, the IMF statement further says. The IMF also points out the fact that “in contrast to the current practice, the impact of PPPs in fiscal accounts and public debt must be reflected in a transparent way and in line with international standards”. According to IMF, the Ministry of Finance must extend public debt maturity periods and diversify the investors’ basis. Meanwhile, the permanent representative of IMF in Albania, Jens Reinke, said in a recent interview that “the state’s debts from PPPs must be accounted for based on the best international practices”. This means that PPPs have an effect on public debt. “The current practices in planning and executing investments do not meet these standards, increasing the risk for weak projects to be selected and for fiscal risks to be undermined”, the IMF official said.  


Opposition: Concessions are damaging the state budget

The application of concessions through the PPP formula is nothing else but the government’s incompetence to make public investments and manage the budget. This has been the reaction of the vice chair of the parliamentary economy committee, Jorida Tabaku. “Concessions are damaging the state budget in the medium-term and long-term. Concessions are turning into a cause for concern for our international partners and here, we’re referring to the IMF”, she appealed. Meanwhile, minister Ahmetaj said that the “1 billion USD Program of PPPs is a program which focuses on investments in infrastructure, mainly in the main road segments of the country”.


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