The organization AIS wishes to express its concerns regarding several critical aspects of the rule of law in Albania, with a focus on the State-Owned Enterprises (SOEs) sector and legislation affecting Public Procurement, Public-Private Partnerships (PPPs), and the privatization of state assets.
1. The SOE Sector as a High-Risk Area
The SOE sector is increasingly becoming a high-risk area for corruption, lack of transparency, and mismanagement of public resources. Recent laws and amendments have created mechanisms that circumvent or bypass the general Public Procurement, Privatization Legislative Framework, and PPP legislation
2. Problematic Specific (Ad-Hoc) Laws
The laws creating opportunities for clientelism and favoritism include:
- Law on the Establishment and Operation of the Albanian Investment Corporation (Pursuant to Law No. 71/2019 “On the Albanian Investment Corporation”, the Albanian Investment Corporation (AIC) was established. AIC has also established two subsidiary companies under its ownership. At the same time, it has announced contracting for several public works through partnerships with the private sector, such as: the State Cadaster Building; the National Library Building; the Orphanage Building; the Sports Palace; the Niko Dovana Stadium in Durrës; and the Government Residences in Vlorë. The projects involving public‑private collaboration resemble PPP arrangements or public contracting for state buildings. However, in no case is the Public Procurement Law or the Law on Public‑Private Partnerships applied, even though these laws are largely aligned with EU Legislation.
[Link to the dashboard with data on the Albanian Investment Corporation and Link to the list of projects contracted in circumvention of the PPP/Public Procurement Legislation]
- Law on the Establishment of the KAYO Enterprise in the defense and military production sector Law No. 88/2024 “On the Establishment of the State Company for the Production and Trade of Weapons, Ammunition, Equipment, and Military Technologies” establishes the legal form, purpose, and corporate object of the state-owned company known as KAYO, JSC. KAYO is authorized to negotiate and establish joint entities with private companies, including at least a minimum equity participation by KAYO and rights to appoint members to the governing bodies of the newly formed entities. In accordance with this framework, four companies were created with 20% ownership by KAYO and 80% by private partners. The Council of Ministers, through specific decisions (VKM), has authorized the production and trade of military products through entities owned by KAYO. In this process, the Public Procurement Law has been circumvented, as these mixed-ownership companies are awarded contracts directly, without applying the standard public procurement procedures. [Link to the dashboard with data on companies owned by Kayo and Privat entities]
- Law enabling the transformation of the National Agency for Information Society (NAIS) into a joint-stock company and the transfer of SOE shares to entities with mixed ownership (mix/joint-venture) public-private (February 2026 amendments). Amendments to Law No. 43/2023 “On Electronic Governance” — This law was amended and republished with official adoption in February 2026, enabling the transition of certain procurement functions of the National Agency for the Information Society (AKSHI) to state‑majority “ICT operator companies” (joint stock companies where the state owns at least 51 % of shares). Under the new framework, AKSHI retains regulatory and oversight roles but no longer conducts competitive public procurement for core state digital systems such as GovTech infrastructure and the e‑Albania platform. (The amended text was approved and published in the Fletore Zyrtare in February 2026 as a formal legislative act modifying Law Nr. 43/2023.). Amendments to the Law on Technological and Scientific Parks (Law Nr. 58/2022) — Parliament has considered and progressed a draft bill proposing additions and changes to Law Nr. 58/2022 “On the Creation, Organization and Functioning of Technological and Scientific Parks.” These proposed amendments aim to allow share purchase arrangements and mixed‑ownership structures between public entities and private companies within technology parks. In addition, the draft provides that newly created state-owned enterprises (SOEs) may contract for public products and services with preferential pricing, bypassing standard competitive public procurement procedures. These laws grant the Council of Ministers (executive branch) expanded powers that undermine the separation and balance of powers, weaken the oversight role of Parliament, and create a parallel decision-making system with a high risk of clientelism and favoritism toward selected actors.
3. Increased Risks of Corruption and Opaque Influence
The current laws and practices allow contracts and investments to be awarded under hidden or opaque influence in critical public sectors. This undermines transparency, fair competition, and the efficient use of public resources.
This process is directly linked to heightened corruption risks, the potential for contracts to be awarded under undisclosed or opaque influence in critical public sectors and ultimately results in the weakening of parliamentary oversight and the concentration of decision-making power in the executive branch.
4. Incompatibility with the Stabilization and Association Agreement (SAA)
The legislation and practices applied in the SOE sector conflict with the requirements of the SAA, particularly regarding transparency and competition in the privatization of state assets and public contracting. Specifically:
- Article 70 of the SAA – Approximation of laws and enforcement of competition rules: Special legislation and amendments that circumvent or bypass standard rules, allowing mixed-ownership/joint-venture companies to obtain contracts without competitive procedures, violate this provision.
- Article 72 of the SAA – Public undertakings: Legal exemptions granting the Council of Ministers expanded powers over SOEs and the privatization of state assets conflict with the requirements for fair and transparent management of public enterprises.
- Article 74 of the SAA – Public contracts: Awarding contracts without tender or competitive procedures, particularly to mixed-ownership companies, undermines the principles of open competition and procurement transparency.
This situation increases the risk of corruption and clientelism, weakens parliamentary oversight, and favors the centralization of decision-making within the executive branch, contrary to EU standards and Albania’s legal obligations under the SAA.
Over the past four years, approximately 51 new states owned or joint-venture companies have been established in Albania.
5. Recommendations for the Upcoming Rule of Law Report
AIS recommends that the upcoming Rule of Law Report should:
- Identify the SOE sector as a high-risk area for corruption and clientelism.
- Express concern regarding laws and amendments that circumvent or bypass Public Procurement and PPP legislation, and that expand executive powers over public assets.
- Assess the impact of these laws on the separation of powers and the weakening of parliamentary oversight.
- Call for full alignment of legislation and practices with EU standards and the Stabilization and Association Agreement.
- Recommend strengthening transparency, accountability, and parliamentary oversight mechanisms over the privatization, awarding of contracts, and management of SOEs.
- Monitor the impact of these laws on increasing corruption and clientelism risks, particularly in strategic public sectors.