“2018 Budget Guarantees Infrastructure Development”

Speech of Minister of Infrastructure and Energy Damian Gjiknuri in the Commission for Productive Activities, Trade and Environment on the budget of MEI:
I, as Minister of Infrastructure and Energy, will focus on some of the key issues pertaining to the budget of the sectors I cover. I will make a very brief summary and an analysis of how they are in line with the objectives set by the government itself. I think that in terms of road infrastructure and water supply we have a significant increase of investments in this budget, and if we look at the total stock of foreign or domestic investments, for 2018 they go to a value of about $ 420 million or ALL 43 billion, which is the highest value of investments gathered together compared to previous years. In my opinion, this comes as a result of the two things, first of all, for a better economic stability and a better chance of state revenues that makes it possible to manage a more sustainable budget and secondly the priority the Albanian government has given to road infrastructure and infrastructure in general, even water supplies or the rest that are energy infrastructure, which are a continuation of the government’s initiated programs during the time that I governed the Ministry of Energy. With this budget it is possible to open some new projects, the closure of the launched projects, and I want to emphasize that because in Albania we had a somewhat fragmented, why not often almost electoral distribution of investments where investments did not they went to main road networks but sometimes, were also dispersed on roads that did not have immediate economic impact or did not give immediate results to the state budget. Sometimes it was impossible to finance these roads and unfortunately Albania has witnessed a large stock of unfinished debt and projects that continued for years. Understandably, some of the defects have also come as a result of mismanagement of the not very good and not very complete projects that often cause problems even during implementation and the unprecedented expropriation costs. We think that with the current budget, we will enable the closure of almost all open yards during the previous years, which unfortunately are not completed, and we can say are some key axes, we will be able to close the remaining part from Kukës to the border, which is part of the highway that has remained unfinished, and the rest will be completed based on the concession contract and soon the activation of those payments that are part of this contract will begin, while the investments have started and will be carried out on time. The budget will make it possible to open several new construction sites that are very important for the connections, the main junctions of the road transport, such as the possibility of continuing a part of the ring, especially the junction connecting the former brewery, that is, the node that is connected to the part of the newly completed ring at the Eagle Square, which also unfortunately has returned to a hink, as the rest of the ring is finished coming from the Elbasan road. And soon, next year, the traveling citizens will no longer have the problem in the coming years after this work is completed, creating a heavy traffic in that part, then leaving the ring at the overpass before you go to the City of Students. On the other hand, we will be able to open new sites, such as Tepelena bypass, completing the entire segment from Levani to Kakavija, and this is a very important segment. We will enable the continuation of the second lot Korça – Erseka, linking Erseka with a modern transport route linking it with the rest of the national road network. We will finish constructed works such as Lin – Pogradec, including the tunnel that will be at the entrance of Pogradec, as well as all the works initiated and unfortunately are lagging behind due to the lack of liquidity but often because of the projects not done well. On the other hand, this budget enables the conclusion of contracts for the passport of Vlora and by the pass of Fier, these important joints that have turned into the great gangrene for road transport. And I believe, if we will be able to conclude a contract by the beginning of next year we will exercise all the pressure needed to at least one of the segments to be functional for the summer period, and for that we will do our best, and I hope that the contractor who will win, will have the necessary capacities. On the other hand, we will continue to provide financial support for potential PPPs that we will connect in the future, and here I believe the public has agreed that we have announced the winner for the Arber road one of the companies that participated in the race and has bid, we are negotiating the final stage of the contract, and I believe next year this road will start and will be invested and will become a reality over several years. Also, the road should be declared for the Albanian citizens with an additional fund that is required again, and I want to emphasize this, we are also making a final audit on how the project of the Tirana-Elbasan road was administered because there was a problem as a project but also, if there is a need for additional funding. These are things that should have been done long ago and unfortunately the administration did not do it when needed, but the responsible persons have their responsibilities and we are working in this direction, for the Albanian citizens what is of interest but also for you as deputies, is that this road should be completed within the next year. Therefore, the additional credit will be provided and the road will be completed within the first 6 months of the next year and the road Tirana – Elbasan, and we are starting the project together with the road directory for the creation of a modern junction at the TEG crossroad, which will soon be the connection with the rest of the TEG ring in the direction of Farka, which is also a completed segment, because even that junction requires a modern solution in terms of traffic, because that roundabout has created problems in traffic and it deserves an infrastructural intervention. On the other hand, the approach of the Albanian government from a strategic point of view, and ultimately as MPs you will raise the question how does this match with the government’s objectives, how much this budget is needed, how to make it possible to achieve these goals. To make it clear, the budget is increased for investments, makes possible the realization and closure of the launched works of the main national axes. The investment focus will be in the main national axes, meaning that we will no longer start off the periphery, the whole part of Albania is important, I do not want to misunderstand in this direction, but it is quite normal in infrastructure development, but it is quite normal that in infrastructure development you will start from the main arteries of the country, then you will stretch to the parts that are more peripheral, otherwise would be fragmented in such a way that public projects would not bring any result, instead they would remain in place and Albania would never have a modern road network. The modern road network will not only be seen in the road crossing plan simply in facilitating traffic between citizens, but we also need to connect it with marine economies. Our ports are likely to be linked to the Balkan interconnection routes, the region to Europe. Therefore, investments in the Ionian-Adriatic corridor take on a great advantage, for this there is an expression of interest in completing the segments of this corridor, at least in the Albanian part by Albanian private or foreign interested companies which through the PPP scheme will make it possible to complete the segment from Milot to Kashar. Kashar – Rrogozhinë which also has interest to become a private concession project, even with the private investor’s risk through the payment of the road, the continuation of the road from Milot to Balldren, so the rest of the segment, so that we as Albanian, in the coming years will have the opportunity to create a modern road network. This will give a great opportunity to our ports. So the connection with Kosovo, later with Serbia and with Montenegro will give opportunity not only to tourism but above all to the maritime economy, which in my opinion Albania has underused. There is also work on railway feasibility studies, and this is one area that is far behind in Albania, one of the priority projects is the project with the EBRD for the construction of the modern railway network Tirana – Rinas – Durrës, but we are discussing also with the Municipality of Tirana to make an internal connection of the railway network by becoming also an internal transport network for a part of the city of Tirana, and this will be the first serious investment in the field of railways and there is a feasibility project to be carried out for the interconnection of Albania with Macedonia and with Greece. Rail freight is the cheapest transport if we are able to at least improve our network and connect it to the European network by attracting foreign investment it is likely that our marine economy will get more value because ultimately Albania’s economic growth will only come from the integration of the Albanian economy and Albania’s return to a non-Albanian but regional market. On the other hand, we will continue the investments started in the water supply, and there are good projects, but there are also failed projects, I must say, in the water supply and sewerage department is carrying out a complete audit for projects that unfortunately did not give the good results though a lot of Albanian public money is used there through loans, this is an issue I do not want to prejudge but I want to leave the process to the end but we will also enable the investment of a part of the water supply. It is understandable that the financing scheme will be a 2-3 year financing scheme for roads and water supply, enabling the opening of several new water supply projects in different countries, also because water has been emphasized as a government, reform of water is very important and the discipline of water use and water billing, collecting collection and economic empowerment of water supply will enable Albania to have a modern water supply and sewerage network, is one of the great challenges that this country has. This place has water and there is also a degraded network, there is also an extremely intolerable behavior. To have a modern network of water millions and millions of euros of investment are needed, these will only be paid by a water management in Albania. On the other hand, this budget enables the financing of the government’s objectives regarding urban waste. You know that some plants have already been set up and some projects are under construction or several projects for new landfills are in the study phase, such as the Vlora landfill, or other landfills that have been contracted by the Albanian government, including the establishment of fertilizer processing plants. With this budget, it will be possible to continue these investments, either as local counterpart funds by the Albanian government, or as support for private public partnership for those payments that the Albanian government has taken over. So, even the urban waste objectives have a satisfactory performance, although we are in the early stages and it is one of the great challenges Albania faces with regard to urban waste management and will be a continuous challenge of Albanian society even in the future because it has its own costs. On the other hand, support for energy will continue, this year was a bad year from the hydropower point and has definitely created a crisis of electricity production, which has cost the finances of energy companies pretty much, I can say a value not less than their spending plans, a value of not less than 70-80 million euros, which a small part could be faced with support through credits from the state budget, but the rest is faced by Albanian energy companies themselves, and this is a test of reform because under such conditions these money would be entirely taken from the state budget and the companies would be in a total lack of economic viability since all the necessary financial resources will only go for the import of energy. This is a long-term challenge for the Albanian government to address climate problems. You know that we have launched various diversification programs including other alternative sources of energy, but in the beginning of next year, we will also open a tender for concession for the commissioning of TEC in Vlora. These are some of the main objectives we have in all areas that I have mentioned, but I want to reiterate what I said just before, the budget supports the government’s main objectives, our approach to build the roads we have started, to make investments in new roads , which are part of the Albanian main netbook and which help it to connect with other European regional roads of Albania, this will be our investment motto: private capital where possible with Private Public Partnership, state capital in those projects that will be funded directly from the state budget and require a quick completion of these projects. I think that no Infrastructure or Energy Minister is ever more satisfied with the budget that it would have had to have endless cash to complete any kind of project that would have liked or would be part of national projects but I think that this support we have will be able to realize those tangible objectives that are not modest, but are ambitious in our country’s conditions.