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Economically, the Llogora tunnel turns out to be an unprofitable project

2024-08-24 22:24:28Pikëpamje SHKRUAR NGA SHEREFEDIN SHEHU
Economically, the Llogora tunnel turns out to be an unprofitable project
Llogara tunnel

By Sherefedin Shehu*

Completion of infrastructure projects such as highways and especially tunnels is an event for Albania. Albanians traveled for the first time on the Tirana-Vorë highway completed in the late 90s and then on real highways after 2009.

This is one reason why the citizens do not even think of worrying about the efficiency of budget forecasting, design and implementation of these projects.

But, unfortunately, they do not even react against the repeated inaugurations of unfinished projects and agree with their use, despite the risks and problems they encounter, such as the case of the "Arbër Road" and the "Ditch Tunnel".

Among the infrastructural projects under implementation, the inauguration of the Llogora tunnel without completion and the problems in its design and implementation clearly show the ignorance of the standards and rules approved for the management of public investments.

The analysis of the process of approval, design, tendering and implementation of this project clearly shows that the decision and all procedures related to the implementation of this project are dominated by political motives and interests.

The Ditch Tunnel was not defined as a priority project in the National Strategy for Development and Integration nor in the Transport Sector Strategy, but it was suddenly chosen by the Prime Minister.

Referring to these documents and the practice of developed countries, it follows that each country must first design the most important corridors, which are generally the North-South and East-West corridors.

Next, the most important connections with these corridors are designed.

The strategy of the transport sector in Albania defines as a priority the road corridor Elbasan-Berat-Përmet-Tepelene-Ura e Kardhiqit-Saranda as a continuation of the north-south corridor of Albania and the East-West corridor or the Korçë-Durrës road.

These projects would promote faster economic development and pave the way for the completion of other supporting corridors which, according to the road transport strategy, include the Arbër road, the Milot-Shkodër road, the Lushnjë-Skrapar road, the Tepelenë-Korçë road and the Vlorë road -Saranda, part of which is also the Tunnel of Llogora.

The construction of the Llogora Tunnel postponed the implementation of ongoing projects, which were the Rrogozhinë-Korçë road and the Arbri road.

On both the projects, the work had started before 2013 and now in 2024 or after more than 11 years, they are still far from completion despite the many inaugurations done from time to time for starts and restarts of their segments.

In addition to ignoring the priorities, attention should also be drawn to the increased cost due to the time factor after the extension of the implementation of the projects, especially during this period of the Covid-19 crisis and the economic-financial crisis that followed, which significantly increases their costs, in addition to the time value of money.

Economically, the Llogora tunnel turns out to be an unprofitable project.

Despite what they say, this does not cut 35 or 40 minutes, but less than 15 minutes. Even if this time were true, it is not enough to justify the construction of such a high-cost work as a mini-segment of a corridor called the Blue Corridor, which is still on paper.

Another fact against the usefulness of this project is its seasonal use.

Tourism in Albania is still in its infancy and lasts 2-3 months and unfortunately the area is depopulated and very few people live in it during the rest of the year.

Like many other projects, this project did not escape the costs of mismanagement and abuse. The implementation of this project has gone through some dubious bargains and agreements.

The first tender for its construction was announced in December 2020, while the opening of bids was scheduled for February 12, 2021.

But, a few days before the bid opening date, the tender deadline was postponed to March 12.

Further, the Ministry of Infrastructure, against the laws and tendering standards, changed the special qualification criteria, reducing the criterion of profit realized in the last 5 years by 2.5 times and the volume of similar works from 70% to 50% of the limit fund, as and cutting construction time from 5 to 3 years.

Although the conditions of the competition were formatted for a "default" contractor and although 6 offers were presented in the tender, the tender was canceled with a public statement without concrete arguments that "no offer was suitable".

Thus, the tender was re-announced in June 2021 to be held on July 28 of this year.

And the result was an increased cost of about 40 million euros compared to the best offer of the first tender and the winner was a Turkish businessman who, based on documents and photos made public, had met with Prime Minister Edi Rama and Minister Belinda Balluku 4 months before the development of the tender.

The higher cost of the Trench Tunnel is not related to the difficulty of the project, but to the mismanagement of its design and implementation. This is a tunnel of the lowest standards in terms of size and difficulty of its realization.

However, the cost of its tunnel construction is approximately 35 million euros per 1 (one) Kilometer (km).

The most recent studies on the costs of highway construction in the European Union show that for the period 1990-2020, they are on average about 11 million euros/km.

This cost is relatively higher in mountainous countries such as Austria with 12.87 million euros/km, Slovakia with 9.56 million euros/km and the Czech Republic with 8.86 million euros/km. While in other EU countries, the cost is even lower such as Denmark 5.89 million euros/km, Croatia 6.682 million euros/km, Slovenia 7.29 million euros/km and Germany 8.24 million euros/km.

The cost of abuses in this work is very obvious. In addition to the contracting and re-contracting of project design companies and the tendering and re-tendering of its implementation, the relevant processes have resulted in increased costs.

Thus, the winner of the tender was the offer of 170 million euros or about 205 million euros (including VAT, since the announcement of offers without including VAT is speculative and deliberate) when in the first canceled tender there were also offers of 110 million euros and in the second tender, the best offer was 158 million euros (without VAT).

But the shadows of doubt go further if we take into account the fact that the companies that gave the lowest bid in the first canceled tender ended up as subcontractors in the second tender.

Ultimately what increased is only the cost of the citizens. In addition to the cost of the abuse, which is around 40 million euros, they will also pay 5 euros for each passage through the tunnel.

*Independent consultant, special for Monitor


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