Q&A: 'Investment in Transport Infrastructure Is the Most Important'

TIRANA, Feb 26 (IPS) - Roads, railways, ports and airports are being upgraded in a country where in spite of the challenges posed by poverty, investment in infrastructure has been dramatically increased.

Albania's minister for transport explained to IPS Central-Eastern Europe correspondent Zoltán Dujisin why the country's ambitious bid to link itself with Europe's trade and tourism routes is so important to a previously isolated nation.

IPS: How important is transport infrastructure investment for Albania?

Sokol Olldashi (SO): It is the most important investment in the country. During the communist period our infrastructure was very poor, especially in the road and railway sector, and now we are trying to catch up. Comparing to 2004 we are investing six times more in road infrastructure. In 2004 we spent 65 million euro and in 2008 we will invest 470 million.

IPS: Isn't this is a huge strain for the budget? How do you find funds for this?

SO: We've had a very good fiscal performance in the last few years, incomes are increasing, we took important measures against corruption, and this has helped the state budget. We are privatising and we have a six percent GDP growth, and all this while lowering taxes. We have lowered the tax on labour; we are applying a 10 percent flat tax which is very attractive for investors. We also receive loans from several banks.

IPS: Which sectors are benefiting from these large investments?

SO: We have increased investments in all sectors of infrastructure: ports, aviation, railways. We are building the basic network of roads in the country starting from the north-south axis, which will soon be completed and connect Greece to Montenegro through Albania.

The road to Macedonia is already built, and the biggest project will connect us to the border with Kosovo. The highway is under construction right now and represents the greatest infrastructure project, because the terrain is very difficult, going through various mountains, and there will be 12 kilometres of tunnel and 25 bridges.

IPS: The section connecting to Kosovo has been highly controversial, your predecessor was accused of approving the project before the cost was known, and critics say the tender was not open, and costs could increase again.

SO: It was a fully transparent project. Everything was done in consultation with different foreign institutions, international bodies evaluated the offers, and five big companies from abroad were part of the tender, with none of them having even a single remark against the process.

IPS: Are you also developing smaller roads that will lead to so far inaccessible beaches deemed so important to making the most of the country's tourism potential?

SO: We are building several of them, connecting the north-south axis to the sea, such as the one connecting Vlora to Saranda along the coast, and which has only touristic purposes.

IPS: What do you expect to gain from all these improvements in infrastructure?

SO: It will serve many purposes; industry growth, to facilitate the movement of people and goods, boost tourism, and bring development to the most remote parts of the country. In April we will start a very important project for tourism and agriculture, which will consist of building 4,000km of rural roads; this will be a huge step forward in solving the problems of rural areas.

IPS: Will this stop the massive movement of the population from rural to urban centres?

SO: It will slow it down but not stop it. When in the early 1990s communism collapsed we had 73 percent of the population living in rural areas, now this number is down to 50. The tendency will be to come closer to the European average.

IPS: Albanian roads are considered very unsafe and constitute a big public health issue.

SO: This is a very complex problem. It's not enough to just take measures to make roads safer. If we look at statistics and compare ourselves to other countries in the region, our numbers are quite average. In my view our weakest point is the procedures for licensing new drivers. We have to improve the control and quality of driving schools. Almost 80 percent of road accidents occur during the day, in good weather conditions and on our best roads, so it's mostly a problem of speeding.

IPS: Driving is still quite a novelty for most Albanians.

SO: This can have an influence. We must consider that motorisation among Albanians is still low for European standards, but traffic will increase permanently in future years together with the rate of motorisation. We have 10 vehicles per 100 inhabitants, and I believe the European average to be at around 60 per 100 inhabitants.

IPS: But this increased rate of motorisation is catching some cities off guard and causing traffic congestion and environmental problems.

SO: We are also helping the local governments invest in city infrastructure. For example, in Tirana we are cooperating with the city authorities to financially assist them in important infrastructural projects, such as the building of a ring road.

IPS: The railway sector is not very developed in Albania, many cities cannot be reached by train and there are hardly any international connections, are you interested in improving this?

SO: There is only an international connection with Montenegro. It is true that the conditions of the railway system are very poor: The railway is not electrified and during the transition period investment in the sector has been negligible. But regarding our connection to Macedonia our lines, though in poor condition, go until three kilometres of the border; the problem is on their side. We are working with the European Commission to reform the sector aiming at investing and improving infrastructure after having a clear view of what will be done with the railway sector in this country.

We are evaluating some expressions of interest in reaching a concession agreement by companies from the Czech Republic, Switzerland and Italy, but this has to be carefully evaluated because Brussels is not pushing too much for a full concession of the railways. We need to find a balance between our obligations to the European Community standards and our need to accelerate investment in the railway infrastructure.

IPS: Are ports a more pressing priority?

SO: We are investing in ports, increasing their capacity, for instance by modernising our main port in Durres. We are even considering building a new port in the Durres area to prepare for the future needs of the country. This port only has capacity for 11 million tonnes per year and we estimate that in 20-25 years this won't be sufficient.

IPS: Are there any plans to build more airports?

SO: The Mother Theresa Tirana Airport is very successful, the number of passengers increased by 30 percent in one year, but we are studying the possibility for a new airport in the south, in Saranda, which would be a touristic one.

IPS: Developing tourism has been defined as a strategic goal for Albania, but poor infrastructure and long travel hours are not helping in attracting tourists to areas outside Tirana.

SO: In recent years tourism has been increasing, last year there was an increase of close to 40 percent. Obviously infrastructure is a very important factor in attracting tourists but not the only one. We have some problems but we are the cleanest country in the region if you look at coastlines. Industrial pollution is very low, 80 percent of the sea cost is fully virgin, as god made it, and in the south it is especially beautiful.

Moreover this is a very quiet country with very low criminality, there are no places where you cannot walk or drive at night, and I believe Albanians are the most hospitable people in the region. (END/2008)

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