World Bank critical of concessions: PPPs increase by 35%, government more transparent

The World Bank seems skeptical about concession contracts in Albania. The Manager of the World Bank Office for Albania, Emanuel Salinas said that according to the latest report on PPPs, the value of contract investments has increased to 35%. According to him, PPPs are in principle the best way to bring private sector practices like public services however he added that expectations for PPPs are sometimes higher than reality. The World Bank has warned the Albanian government about the risks of unclear liabilities created by Public-Private Partnership (PPP) projects. According to the latest Government PPP monitoring report published in November 2021, the value of PPP contract investments has increased to 35% of GDP in 2020. A few years ago, PPPs were considered a medicine. And why not like the idea of ??mobilizing private investment in undertaking activities that were traditionally considered the monopoly of governments? We all saw that PPPs were, in principle, good ways to bring private sector practices into elements such as public services. "This is a good thing, but I think sometimes the expectations for PPPs are higher than reality," he told Monitor.

WB calls on government for transparency

The World Bank Office Manager for Albania, Emanuel Salinas said that PPPs are an important tool when used well but when used poorly can lead to fiscal risks. He said the government should stimulate and strengthen performance controls while adding that it should carefully review the lessons learned from the existing PPP portfolio. According to the World Bank, PPP selection and monitoring processes need to be strengthened and conducted in a transparent and competitive manner. "PPPs, when used well, can be an important tool for governments to use private sector funding and expertise to achieve government objectives. However, when misused, contracts can perform poorly and create fiscal risks for the government. In short, what we have learned from PPPs around the world is that a) it is important to set performance indicators and structure incentives to enable these indicators to be achieved, and b) PPPs do not eliminate risks, none financial instrument does not eliminate risks, they simply pass them from one party to another. We recommend that the government carefully review the lessons learned from Albania's existing PPP portfolio. "To ensure that the PPP instrument is used well, the PPP selection and monitoring processes need to be strengthened and carried out in a very transparent and competitive manner," he said. Regarding the risks of the Albanian economy in 2022, the World Bank recommends preparation by increasing fiscal consolidation. According to BB, the government must create savings for the difficult days so that every money is spent wisely and transparently. "When we think about the risks, we should not have a fatalistic perspective or be demotivated by the scale. Rather, it is important to act to be prepared to face the dangers. Governments can do this, for example, by increasing fiscal consolidation, which basically means ensuring that they spend less than they collect on taxes, create savings for "hard days" and make it possible for any money "to be spent wisely and transparently," he said. it is important to act to be prepared to face risks. Governments can do this, for example, by increasing fiscal consolidation, which basically means ensuring that they spend less than they collect on taxes, create savings for "hard days" and make it possible for any money "to be spent wisely and transparently," he said. it is important to act to be prepared to face risks. Governments can do this, for example, by increasing fiscal consolidation, which basically means ensuring that they spend less than they collect on taxes, create savings for "hard days" and make it possible for any money "to be spent wisely and transparently," he said.