Schemes of how the Durrës Port deal could turn into a launderer of dirty money

The "Durrës Yachts & Marina" project will be one of the largest investments in the country, with a value of 2 billion euros, it will create over 12 thousand jobs, it will generate development for tourism and the coastal city of Durrës.

These are at least the statements of the government, which for almost two years has been heavily advertising this investment and has recently advanced by taking it to the Assembly with an accelerated procedure to approve in the Assembly the draft law "On the approval of the framework agreement, between the Council of Ministers of the Republic of Albania and Eagle Hills Real Estate Development, Albanian Seaports Development Company, sh.a., and Nshmi Development LLC", for the strategic investment project "Durres Marina & Yachts".

According to the decision "Albanian Seaports Development Company" JSC representing the interests of the Albanian state will be the holder of 33 percent of the shares, while the private party will hold 67 percent of it.

But the more details about the deal become known, the more questions are raised about this so-called strategic investment.

- First, the benefits of the investor side seem much greater than those of the Albanian government. Investors have benefited from exemption from infrastructure and housing taxes, in addition to having strategic investor status that exempts them from other taxes, they have received over 80 hectares of land for development in one of the most preferred areas of Durra and have numerous facilities in the scheme of financing.

For the Albanian government, until now it has been made known from the relation of the published agreement that the benefit will be calculated only on 2% of the turnover of the Navy. The construction of the yacht port is in a second phase, while it is not known how much the government will receive from the first phase, which is related to the construction and sale of apartments, where the land has been made available to the investor by the Albanian government. There are still no public details of how much the Albanian government will benefit from the project for the sale of apartments, which is also much faster in time.

-Secondly, the investor has so much flexibility in how he can secure financing, that he can easily pave the way for the introduction of informal money.

The project is expected to be implemented in two phases. The first phase envisages the delivery of the part of the Project Square described in more detail in the annex to the agreement, according to the approved Master Plan and business plan.

These additions have not been made public, but real estate agents working on the project say two buildings will be built in the area near the Dajlani Bridge, which is currently unused land by the sea by the Port and expected to be rehabilitated and a mini-city is built. Agents have started contacts for the sale of apartments.

scheme

Precisely, the schemes approved by law leave a lot of space for the channeling of informal money, or money laundering.

The estimated investment in the first phase is 595 million euros. The investing company is required to keep in their accounts an amount corresponding to thirty percent (30%) of the financing needed for the development of the square of phase 1, that is, about 180 million euros. The rest can be provided through:

– equity financing from Eagle Hills;

– debt financing contributed by, or on behalf of, Eagle Hills and investments by third party investors, organized by Eagle Hills;. This scheme, experts explain, easily enables large profits, or the introduction of informal money. For example, Eagle Hill can introduce as a shareholder a person or company X with an initial capital of 1000 euros and then this person X as an investor receives 2 thousand meters of built area, which is worth 4 million euros, thus justifying the creation of a fortune of millions of euros. This scheme, experts explain, is well-known in Tirana and is widely used with the expensive towers being built in the capital. Since the value of the apartments is high due to the prices that fluctuate from 3-5 thousand euros/m2, it is difficult to justify their purchase with cash. Consequently, the shareholder entry scheme is used. "For example, I sell 5% of the shares, which today can be 10,000 ALL. These 5% of the shares, when the apartments are built and put on the market, are sold and make 1 or 2 million euros", says a builder.

In addition to debt schemes, the company can borrow from international institutions, where the main company or other investors can borrow from foreign banks, which experts explain is the best way to justify the source of money. Through land collateral, getting a loan is easy anywhere.

The agreement allows the investor to collect income from sales, completely devaluing the concept of a strategic investor, since he will simply operate with the scheme that builders in Albania have been using for years, selling the apartments in the pit, or in air.

The profits, from which the state will benefit, the investor withdraws as much as he wants

Having the status of a strategic investor, which allows it to operate tax-free, the construction company can increase costs as much as it wants, as long as it does not pay VAT, which causes it to reduce profits, a part of which the Albanian government will take it.

Experts explain that the scheme used today is as follows: the company, after buying the goods at the real price, sends them to an offshore country and then exits the offshore country to the Albanian border territory at the price it wants, blowing on this order prices and fictitiously increase costs.

The second phase is not known when it will happen

The investment that would really have value for tourism is that of the second phase, with a value of 1.49 billion euros, the construction of the Yacht Port. This investment is not really known when it will start, as it is related to the relocation of the Port of Durrës. The first estimates from the leaders of the Port are that it will take at least 5 years for the relocation of the Port to begin and only after this period the construction of the project will be expanded to a wider area. The passenger terminal that is in the Port of Durres will remain there, but the works or steps for its resizing are thought to be carried out in the second phase of the project's implementation.

The relocation of the port of Durrës to Porto Romano will be gradual, as the development of the project in the existing port will be so. It is not yet known how much the New Port in Porto Romano will cost, which will take at least 15 years to build, and where the funding will come from.

At the moment, the only major strategic investment in the Port of Durrës seems to be nothing more than a tower construction project, which enables the introduction of money from unknown sources, just as is happening with the development of Tirana. The investment is minimal, the profits are guaranteed and fast, since the interest of buyers, both local and foreign, has not been lacking, due to the strategic position, unlike what would have happened if the project was given in an undeveloped area of coast./monitor