The Albanian state has so far activated the PPP project for the construction, rehabilitation and maintenance of the Milot-Fier road axis. This segment is part of the Adriatic Ionian Road Corridor, a strategic project for Southeast Europe, part of the expansion of the Trans-European Transportation Network in the Western Balkans. The corridor stretches from the Croatian border, in Tivar, to the Albanian border with Montenegro, Route 1 and the North-South Albanian Road Corridor connecting the Montenegrin border with the Greek border through Albania, Route 2.
This corridor aims to connect Central Europe and Northern Italy with the Ionian peninsula through Slovenia, Croatia, Bosnia-Herzegovina, Montenegro, Albania and Greece. The AIC, from Italy to Greece, will extend for about 1 500 km, whereas in Albania the corridor runs approximately 300 km or 20% of its total length.
On the Albanian side, the project consists of 6 main road axis:
- The Milot – Thumane axis – 13.5 km long;
- The Thumane – Kashar axis – 20 km;
- Kashar – Peze Helmes axis – 9 km; Peze Helmes – Luzi i Vogël/Lekaj axis – 24 km long;
- Luzi i Vogël Lekaj – Rrogozhinë axis – 8 km long;
- Rrogozhine – the beginning of the Fier Bypass axis – 38 km long.
The Albanian Government carried out the international bid for the selection of the winner concerning this project, a competition announced in 2020 to pave a total of 115 km long road. The tender was canceled because the submitted offers did not comply with the established criteria.
In August 2022, the Government decided to announce the bid for the Corridor’s 3 road segments for a combined 86.1 km in length and a total investment value of about Euro 839.5 million. More specifically:
- The Concession/PPP project “Design, construction, operation, maintenance, rehabilitation and transfer of the Milot-Thumanë road segment”, stretching over 13.5 km and holding an estimated investment value of Euro 44,620,189. The winner for the implementation of this project has yet to be announced.
- The Concession/PPP project “Design, construction, operation, maintenance, rehabilitation and transfer of the Kashar-Pezë-Lekaj 26.6 km long road axis and an estimated investment value of Euro 474,869,965. The project has yet to be tendered.
- The Concession/PPP project “Design, construction, operation, maintenance, rehabilitation and transfer of the Lekaj-Konjat-Fier road segment with a length of 46 km and an investment value of Euro 320,000,000. This project will be implemented by a Union of eight economic operators, headed by the company Fusha l.l.c.
- The Thumane Kashar road axis is also part of the Corridor, a PPP contract approved in September 2022 after several years of tendering, cancellation and a court decision reconfirming the Winner of the Procedure. This procedure’s passport is well documented in our Database for Transparent Concession Procurement.
Source: Open Procurement, List of Concessions
Comments and Analyses: Open Data Albania
Table: Investment value for PPP “Design, construction, operation, maintenance, rehabilitation and transfer of the road segments Adriatic Ionian Corridor, Milot-Thumanë – Kashar-Fier”
Source: Open Procurement, List of Concessions
Comments and Analyses: Open Data Albania
The average cost per km is calculated in the amount of Euro 10,050,110, VAT excluded. The Thumane- Kashar and Kashar-Pezë- Lekaj segments likewise are deemed to carry the highest cost per kilometer of road construction.
The average cost per km is calculated in the amount of Euro 10,050,110, VAT excluded. The Thumane- Kashar and Kashar-Pezë- Lekaj segments likewise are deemed to carry the highest cost per kilometer of road construction.
The Concession/PPP project “Design, construction, operation, maintenance, rehabilitation and transfer of the Lekaj-Konjat-Fier road segment will be implemented by a Union of the following Albanian Economic Operators: “Fusha” l.l.c &“Agbes Construksion” l.l.c & “Albavia” l.l.c & “Kupa” sh.p.k & “Ante-Group” l.l.c& “Klodioda” l.l.c & “A.L.T.E.A. and Geostudio 2000” & “Sphaera” l.l.c, announced as winners on 14.11.2022. Although an open international tendering competition, no foreign competitor appeared in the procedure, with only the above mentioned union of operators taking part and being declared winner. The axis will be build upon an existing road trail and foresees its rehabilitation, not construction from the ground.
This segment’s footprint starts near the Little Luz area (Lekaj) at the end of the Kashar – Lekaj axis and ends at the beginning of the Fier Bypass (near the Mbrostar area), on a length of 46 km and an investment value of Euro 320,000,000. The duration of the Concession/PPP contract is foreseen for 35 years.
From the moment the winner was announced on October 14, 2022, the parties have a 60 day deadline to draft the final PPP Concession contract. Based on the Standard Procedure Documents, this road segment will be paid by road users, with a maximum estimated value of 0.04065 Euro/km. In total during its years of operation, the company will collect about Euro 1.29 billion from basic revenues. At the same time, for this project, a guarantee from the State on the level of revenue, at about Euro 32.5 million, has been issued. If in the first 17 years of operation the Concessionaire fails to meet the initial targeted revenue from the road user toll, the State will cover the deficit with money from the budget (otherwise called Traffic Guarantee).
Source: DST “”For the design, construction, operation, maintenance and transfer of the road axis Lekaj-Fier””, https://www.app.gov.al/GetData/DownloadDocument?documentId=4bec3762-58ae-4ae9-92ba-0aac113297bb&docType= Call%20Document,
https://www.app.gov.al/njoftimi-i-kontrat%C3%ABs-s%C3%AB-shpallur/
Comments and Analyses: Open Data Albania
The Concession/PPP project “Design, construction, operation, maintenance, rehabilitation and transfer of the Kashar-Pezë-Lekaj road axis. This road segment stretches over a length of 26.6 km and holds an estimated investment value of Euro474,869,965. It will also be subject to direct payment by road users with an estimated toll of around 0.02555 Euro/km. In the published standard tender documents, it is clear that the State will be the guarantor for the Concessionaire, if the latter fails to meet the level of the initial targeted revenue. The total value of the Guarantee is estimated at Euro48.5 million, for the entire duration, while the revenue for this concession is estimated to reach Euro 2.23 billion. Starting from the first year of operation until 2042, if the Concessionaire’s revenue levels falls below the initial plan, the State will compensate it from the Budget.
Source: DST “For the design, construction, operation, maintenance and transfer of the road axis Lekaj-Fier”, https://www.app.gov.al/GetData/DownloadDocument?documentId=4bec3762-58ae-4ae9-92ba-0aac113297bb&docType= Call%20Document,
https://www.app.gov.al/njoftimi-i-kontrat%C3%ABs-s%C3%AB-shpallur/
Comments and Analyses: Open Data Albania
The Concession/PPP project “Design, construction, operation, maintenance, rehabilitation and transfer of the Milot-Thumanë road segment”. This segment includes the improvement of the existing road in order to bring it back within the road category standard (category A). It was likewise planned to be tolled by users, with an anticipated maximum upfront fee of 0.04148 Euro/km. The total anticipated revenue from toll collection is estimated around Euro 291.6 million throughout the entire duration. Again, for this road segment as well, a guarantee from the State on the level of income of the highest value of about Euro 4.57 million is foreseen, from its first year of operation until 2040.
Source: Concession/PPP contract “For the design, construction, operation, maintenance and transfer of the Thumane-Vorë-Kashar road axis, approved by DCM no. 360, dated 26.05.2022”
Comments and Analyses: Open Data Albania
The Concession Contract “For the design, construction, operation, maintenance and transfer of the Thumanë -Vorë- Kashar road axis” is a new construction footprint. Through DCM no. 360, dated 26.05.2022, the Concession contract with the implementing company G2 Infra l.l.c was approved. This contract provides for a Traffic Guarantee of Euro22.81 millionif the Concessionaire fails to collect the targeted revenues in the first 8 years of operation. The value of the road investment is not defined in the approved contract, but the value of the winning bid was Euro 225,821,553, VAT excluded. Although tendered, this contracting procedure started as an unsolicited proposal approved with bonds in 2018. Based on the information contained in the approved contract, the construction of the road will be done with the Concessionaire’s funds, while in the operation phase, the latter will benefit from toll revenues of road users. In total, during the years of operation, the company will collect about Euro 1.3 billion from basic revenue. If in the first 8 years of operation the Concessionaire faces a decrease in the level of targeted Basic Income from the road user toll, the State will once again cover the deficit. For the first eight years of operation, the State has planned an overall guarantee of Euro 22.81 million.
Source: Concession/PPP contract “For the design, construction, operation, maintenance and transfer of the Thumane-Vorë-Kashar road axis, approved by DCM no. 360, dated 26.05.2022”
Comments and Analyses: Open Data Albania
The duration of this contract is 35 years, in which the first two years comprise the construction period and the other 33 years are the operation and maintenance period, during which the Concessionaire will collect a fee from road users of 2.1 Euros per vehicle (according to article 73.1)VAT excluded, adapted as the case may be depending on the classification of vehicles. Depending on the vehicle classification, the vehicle tax is also calculated with the class/tariff coefficient. Starting from the second year of operation, the toll will be indexed every year with the inflation rate. Also, the company is allowed to use the Road to generate additional revenues, apart from toll collection (Article 78). These revenues will be divided equally between the Concessionaire company and the Contracting Authority, after deducting the Expenses related to the realization of additional revenues.
The term of use for this road segment is around 35 years and the Guarantee foresees risks for investment return which is borne by the Taxpayers. The PPP tendering procedure for Milot-Fier axis was carried out by the Ministry of Infrastructure.
The Concessionaires Revenue collection against the PPP ‘s Initial Investment Value Ratio for the Milot-Fier Road Segment shows a situation where the first are expected in 35 years to collect up to 564% of the Initial Investment value, determined with a per-calculated flow of movement. In any case, the Concession company was issued a Guarantee and in case it does not collect revenue on the targeted levels, it will be paid with money from the State Budget.
Source: Open Procurement, List of Concessions
Comments and Analyses: Open Data Albania
The information present in this Article were retrieved from the Standard Tender Documents, which are present and can be accessed at OpenProcurement.al and OpenCorporates.al platforms for each of the projects. Open Data has routinely published data and information on Concessionary Contracts/PPP in the road transport sector (click here).
Download excel: If you want to access the excel or dataset that accompanies this article, please write to us at [email protected]Comments and Analyses: Open Data Albania
Contributed by: Open Data Albania
Translated by: Rezarta Cushaj
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