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The reconstruction program, where did 730 million euros go? Where do the families affected by the earthquake live today?

2023-12-02 09:24:03Biznes SHKRUAR NGA REDAKSIA VOX

The reconstruction program, where did 730 million euros go? Where do the

The actual expenses until November of this year for the Reconstruction Program amounted to 80 billion ALL, or about 730 million euros. As the fourth year of implementation draws to a close, no one can say exactly when it will end. Tirana and Durres continue to be open construction sites in several directions. The procrastination of the housing completion process has caused thousands of families to remain hostage to rented houses. The bonus paid to them from the state budget from the beginning of the program to the end of this year is calculated at around 80 million euros. Beyond the social drama, what raises more questions is the lack of a balance sheet of what happened to the hundreds of millions of euros spent. The negotiation at the reconstruction table, the lack of transparency from the municipalities and the government about the progress, as well as the fragmentation of the program in some institutions, has made it difficult to understand what has been completed, what is in the process and what still remains to be done.

 

From the beginning of 2020 until November 2023, the actual expenses for reconstruction, the largest program ever implemented by a government in our country, were about 80 billion lek (730 million euros), according to official data of the Ministry of Finance.

This program was launched in order to recover the consequences caused by the devastating earthquake of November 26, 2019 and is still ongoing with open construction sites. When four years have passed and we are entering the fifth, it has become more and more difficult to understand why thousands of families are still on the streets without receiving the promised housing.

In the beginning, the project started at a fast pace and focused most of its weight on the years 2021 and 2022, when the first new apartments began to be distributed.

This year, even the representatives of the government or affected local units seem to have lost the pace of statements for a program whose completion is constantly postponed.

Reconstruction also had contrasts in implementation, where donor-managed projects ended while budget-supported projects continue.

In this context, the comparison is simple. Turkey, which engaged in a large project in Laç, completed in record time the construction of over 500 apartments that were then handed over to the citizens.

Thumana was completed sooner, where 278 apartments and 155 individual units were built. A little more than 500 individual residential units have been completed since last year also in the surroundings of Tirana in areas such as Vaqarri, Zall Herri, Ndroqi.

The two new neighborhoods that are being built in the capital in connection with the reconstruction, such as "5 Maji" and "KombinArt" are still in the process and thousands of families remain in rented houses awaiting completion.

In Durrës, so far, 331 families have received a new apartment, but the majority are those who have not yet received one and are expected to move to Spitalle, where the works continue.

When the lion's share of the Reconstruction program has already been consumed with more than 3/4 of the estimated cost spent, the questions that arise are numerous, related to the transparency of the project, the efficient use of public money, the negative financial and social consequences from the delay in the implementation, the problems in the development of the procurement procedures and the monitoring of the implementation.

Reconstruction, until the end of 2023, total expenses reach 92 billion

The amended 2023 budget reallocated funds to a number of items, including reconstruction. In this item, the government predicted that the funds would be increased by 12 billion ALL.

This figure remains to be spent until the end of the year, while currently up to November, the actual expenses according to the Ministry of Finance were 80 billion ALL.

"Within the implementation of the programs of the Reconstruction process, the 2020-2023 budget law sanctioned the creation and administration of the Reconstruction Fund, which provided funds for financing the needs related to the reconstruction.

The actual expenses from the moment of the creation of this fund until November 2023 are: 28.5 billion ALL for the central government units, 52 billion ALL for the local self-government units, in total 80 billion ALL.

With Normative Act no. 5, dated 18.10.2023 "For some amendments and additions to law no. 84/2022, 'On the budget of 2023', the reconstruction fund for 2023 was increased by 12 billion lek for full financing of all the works performed and their advancement" confirmed Finance for "Monitor".

This means that in total, at the end of 2023, the funds spent on reconstruction will reach 92 billion ALL, or about 840 million euros.

For 2024, the government has foreseen in the Budget already approved by the Parliament, a fund of 7 billion lek, or about 65 million euros, but no one can say whether the program will go beyond this year or mark its closure.

Durrësi and Tirana, still open construction sites, there is no deadline for completion

Durrës and Tirana are the municipalities with the most families waiting for a new apartment or house, after the earthquake four years ago and whose houses were classified with damage level DS5 (totally destroyed).

In the Municipality of Durres, 1098 individual dwellings were categorized as DS5 with the approval of the Municipal Council. As for the buildings for reconstruction, there were 12 in Durrës, 7 in the Sukthi administrative unit and 1 building in the Katund i Ri administrative unit in the same place where they were before.

For Durrës, two new ones were approved for development such as Manza and Spitalla. The first one, already completed long ago and planned to house 226 families, while the second one, designed for 996 apartments in 85 4-room buildings, has been completed for the most part, but the apartments have not yet been delivered.

Such a procedure is not expected to be easy, since the families who had an apartment in Durrës have expressed resistance to moving to this new area. Although some have accepted, there are still those who do not agree. Such a fact is confirmed by the Municipality itself.

"Regarding the individual apartments, the citizens have expressed their will to move to the new areas for development, while regarding the residents who lived in the apartments, difficulties were encountered at the beginning, but with the work and commitment of the units, it became it was possible to raise the awareness of families and understanding was obtained and many families agreed to be transferred", - says the Municipality to "Monitor".

Regarding the buildings that were classified as DS4, where reinforcements must be made to return the safety parameters, the Municipality of Durrës underlines that there is still work to be done, even though the funds have been approved.

"Regarding buildings with damage level DS4, there are a total of 96 buildings with damage level DS4 buildings and 101 individual houses, for which funds have been approved for their reinforcement, some of them have been completed, some others are in the process of implementation reinforcement works", confirms the Municipality.

Tirana, on the other hand, has two new development areas with several thousand families who are still in rented apartments, something that has made housing funds have a higher weight in the municipal budget in recent years.

In the May 5 area, it is intended to accommodate 11 thousand residents, while 3,500 apartments are planned, while in Kombinat, baptized as "KomninArt", the Municipality declared that it would be extended in several phases. In the first phase, about 3,000 apartments would be built.

The promises of the Municipality that the residents would be in a new house change from time to time, but the fact is that today these new neighborhoods are still unfinished. This was confirmed by Mayor Veliaj himself, during the presentation of the 2024 draft budget of the Municipality that he leads.

"In the neighborhood '5 Maji' we are nearing the end of the apartments there, meanwhile the 7 buildings in Kombinat are finishing, but it would be a sin to leave it without infrastructure.

We do not want to make dormitories for the people who were found by the disaster of the earthquake. Government and municipal institutions will also be transferred there, but above all, we will build infrastructure. That we are leaving them only as housing, without infrastructure, without good roads, without parks, without parking, does not work.

A part of the budget will go to the supporting infrastructure of these neighborhoods", said Veliaj.

The deadlines for closing the reconstruction in both municipalities, such as Durrës and Tirana, are unpredictable. The latter, since the beginning, are constantly changing, adding to the social ordeal of families waiting to have a roof over their heads after the disaster of 2019.

The delay burdens housing budgets, over 80 million euros as rent bonus

As the reconstruction program started in 2020, the expectation was that the number of citizens who were entitled to a rental bonus would gradually decrease year after year with the progress of the implementation of the projects and the handover of housing. But even today, Municipalities such as Durrës and Tirana pay rent bonuses for thousands of families.

The High State Control, in its actual 2022 budget report, reported that only the Municipality of Tirana has paid several tens of millions of euros in several years for the rent bonus.

The social drama becomes even greater if we consider that the Municipalities have not in all cases paid this obligation, leaving the families to make these payments.

"Progress in the absence of the appropriate rates of housing construction for those damaged by the 2019 earthquake, is continuously bringing additional costs to the budget, in the context of housing.

At the beginning of 2022, 1 billion lek was provided for the rent of accommodation for 11,300 families made homeless by the earthquake, with the assumption that a part of the families would be accommodated in the facilities started during 2020-2021", - it is stated in the KLSH report .

The latter underlines that the number of families benefiting from the rent subsidy continued to be high, resulting in the revision and approval of the additional budget for the value of 1.69 billion lek and in December 2022, it decreased by 350 million, because the Municipality of Tirana covered the payments for two months with its own funds. Finally, the plan for rent expenditure was in the amount of 2.3 billion ALL and it turns out that the fund used for 2022 is 2.19 billion ALL, or 95%.

From the above, it can be concluded that the lack of achievement of planned expenditures for reconstruction, in addition to social problems for housing and public infrastructure, continues to bring additional costs to the budget, which for 2022 is at least 1.3 billion ALL" - underlines KLSH.

In an interpellation this year, the former Minister of Finance, Delina Ibrahimaj, admitted that only for 2023, 500 million Lek were foreseen as an item for the rent bonus, making the cumulative in several years paid by the state budget to 8.8 billion lek or about 80 million euros.

KLSH estimates that, in some cases, the municipalities have not paid the rent obligations, financially burdening the affected families.

"From the audit in the MFE, it is established that there are some municipalities that have not made rent subsidies every month, such as: Tirana Municipality has not made rent payments in the months of February, June, July, August, November; The municipality of Mirdita has not made payments for the months of January, February, May, and November; The municipality of Rrogozhina has not made payments for the months of January, February, April, June, July, etc.

The non-realization of the expenses programmed for the reconstruction, brings additional costs to the budget also in terms of extending the lease term for residents whose buildings were damaged by the earthquake and were expected to finish their construction, in addition to other social problems of housing", - it is stated in the report of the actual budget of 2022 of the KLSH.

The reconstruction is criticized for transparency and negotiation instead of competition

 

The reconstruction program has been constantly criticized for various aspects, but above all for the way it was coordinated. The involvement of a number of institutions and the failure to maintain a reporting standard by all made it difficult to draw up phase-by-phase balances. Another criticized element was the way procurement procedures were developed.

Instead of an open competition, where competition would increase participation, and therefore have an impact on financial offers, negotiation and a special law were chosen under the argument of emergency.

This form was recently criticized in the European Commission's report on Albania, which underlined that "the reconstruction expenses after the earthquake lacked transparency, as they were not integrated into the regular public finance procedures".

The preference to negotiate at the table with business has been seen as a risk for clientelism and corruption. At least this is what Aranita Brahaj, executive director of the Albanian Institute of Science (AIS), who has closely followed almost every link of this program, thinks.

"Procedures for contracting for the works that are part of the reconstruction program are not transparent, they were made with a limited procedure (limited, not open), the offers were accepted and evaluated outside the electronic system at the business and state table.

This is because of the Corrupt Law that was applied to this Program. As a result, the risk of clientelism and corruption is very high", asserts Mrs. Brahaj.

According to her, there is a significant problem with the follow-up of the program in other links and all this has to do with the followed formula of procurement and announcing the winners when the money is still missing since the budgets are not allocated directly.

"After the announcement of the winner, whether the contracting authority is the municipality or the winning business, they should wait for the Ministry of Reconstruction (now merged) and the Government to allocate funds through VKM.

This form of competition without a budget and waiting for a budget without a predetermined deadline has damaged the progress of work in some municipalities and in the end marked a not very transparent and costly form of misuse of contracting and financing with public money.

I think that the budgeting so far for reconstruction projects needs another 10 to 15 billion lek to close all the procedures where a Winning Business has been announced", Mrs. Brahaj.


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