Lack of funds clouds Kosovo-Macedonia highway

13/08/2012

Kosovo is beginning preparations to construct a highway to Macedonia, but lacks the necessary funds to do it.

By Muhamet Brajshori for Southeast European Times in Pristina -- 13/08/12

A portion of Kosovo's first highway at Vrmica links it with Albania. [Reuters]

The Kosovo government has not finished building a highway connecting the country with Albania, but it is proceeding to build another to Macedonia amid uncertainty and public distrust about financing the project.

"[We have] already started the technical and administrative procedures for promulgating the expression of interest from interested companies and for a transaction advisor. The process is open, transparent, with equal opportunity to compete. We hope to have decent competition in the process," Lah Nitaj, political advisor to Kosovo's minister of infrastructure minister, told SETimes.

But before the construction can begin, Kosovo is obliged to implement the IMF standby agreement which requires the country, which seeks to first clear the cost of the first highway, to determine whether it can build a second one.

"There was an agreement that the government should enter into contractual obligations with respect to the planned highway R6 to Macedonia only after the privatization receipts ... had been received and the final costs for highway R7 [to Albania] were known, to be able to assess the space available to fit R6 into a sustainable fiscal framework," Jose Sulemane, resident IMF representative, told SETimes, quoting the Fund's staff report on Kosovo.

The high price tag of the highway to Albania and the fact the contract is not yet made publicly available is cause for concern, according to Nezir Sinani, senior analyst at the Pristina-based Institute for Development Policy, told SETimes.

"The project's budget equals the annual budget of the country -- a very high value. According to calculations, it appears to be higher than the value paid in neighbouring countries on similar projects," Sinani said.

Sinani also said investments need to be proportional to citizens' needs; the price of the second highway would limit investment in other vital economic sectors.

Given significant concerns about transparency, Sinani argued the public should be involved in deciding on whether to undertake such projects of major importance.

"Another more subtle issue that is following infrastructure projects in Kosovo is that of the total lack of public transparency about their development and implementation. This has somehow diminished their importance as the public opinion is focused on the unknown details related to the value of the project and the manner of its implementation," Sinani said.

Nitaj, however, said criticism notwithstanding, construction will begin in early 2013, and the related study on feasibility and environmental impact were completed in 2006.

"The commitment by the government, the ministry of infrastructure and ministerial steering committee is to continue the project. Finding the funds is a priority for the government and it is working to find sources. The project funding will be from the state budget," Nitaj said.

He said Macedonia has shown some interest to take part in the project.

The Macedonian government, however, has not made it clear yet whether it will continue building the portion of the highway on its territory.

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