The Port Authority has no money for the construction of the New Port, the project may turn into a corruption affair

The new commercial port in Porto Romano, trumpeted as one of the most important national projects, will not be built with self-financing, as the director Piro Vëngu declared years ago. Faktoje's verification revealed data proving that the cost to the state budget could reach 390 million euros, where 180 million are foreseen as part of the PPP and 210 million as a sovereign guarantee. This amount will burden the pocket of taxpayers, while experts warn of an even more serious scenario, the transformation of the project into a corruption affair.

'I can give you a preliminary value starting from 320-440 million euros for phase 1.2, which takes us to the second phase. It may seem like a significant cost, but it is a cost that will be borne by the revenues generated through this project and the Port Authority, not the state budget.', declared in 2022, during a television show, the director of the Port Authority of Durrës Piro He came last year, where he clarified the financing method for the construction of the New Port in Porto Romano.

A month later, in an official ceremony, the government together with the Dutch studio "Royal Haskoning DHV" presented the project of the new Port in Porto Romano. Contrary to what Vëngu stated, the financing of the new commercial port will be through Public Private Partnership as the Port Authority does not have money for self-financing.

"Encountered in conditions where the financial resources of the Durrës Port Authority are insufficient to fully ensure the implementation of this self-financed project, in cooperation with the consultancy of the international consortium led by Royal Haskoning DHV, we have evaluated different models of financing this investment so of national importance." - is written in an official letter that the Port Authority of Durrës sent to the Ministry of Finance on May 10, 2023.

The project for the construction of the new commercial port in Porto Romano requires 390 million euros (without VAT) in the first phase, of which 46% will be covered by the government and 54% by the private company. Specifically, the state budget is expected to provide 180 million, while the private company will provide another 210 million euros.

But in addition to this direct budget support, the Port Authority of Durrës requests another 210 million euros from the state budget in the form of a sovereign guarantee for the realization of the project. 

"To enable a successful tender, there must be sufficient guarantees that bidders will arrange/offer the required corporate loan. In this context, we ask the Ministry of Finance to provide a sovereign guarantee for a minimum of 210 million euros for the corporate loan agreement," argues the Port Authority in its request to the Ministry of Finance.

In other words, the entire financing risk of the new Port in Porto Romano is expected to be borne by Albanian taxpayers.

What do the experts say?

The sovereign guarantee is an instrument through which the government guarantees the loans of public enterprises. In case of non-payment by the latter, the guarantee is automatically converted into public debt and the obligation to repay the loan passes to the government. But does the state budget have room to approve this guarantee?

"The guarantee is calculated as public debt in its full value. Parliament decides whether to increase the debt limit, since the objective is to reduce the debt. Since the euro has fallen, they can justify the space in the budget, but the fundamental fact is that everything was a fraud and that the authority does not have financial means for investment," says Professor Selami Xhepa for Faktoje.

While Zef Preçi, director at the Albanian Center for Economic Research, adds:

"In our country, all PPP type contracts followed and follow the same formal procedure: they start with the covering of costs by the responsible authority (the Durrës Port Authority in this case), continue with the government's sovereign guarantee and thus create the appropriate "siphon" from where public money flows to offshores, oligarchs, corrupt politicians."

cONcluSiON

Based on the verification and the data collected by Faktoje, we decided to categorize the statement of the Director of the Durrës Port Authority Piro Vëngu, regarding the method of financing the project for the new Port in Porto Romano, as False./ Taken with abbreviations from Faktoje .co.uk

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