Press statement of Camille Nuamah, Country Manager of the World Bank Office in Albania

April 8, 2010

Thank you for joining us here in the World Bank Office to listen to our prepared statement.  I will take a few questions at the end.

I would like to address several issues that have been raised in the media over the last week.

  • The first pertains to investments in the Porto Romano area.
  • The second relates to the forthcoming restructuring of the Land Administration and Management Project. 
  • Finally, I would like to make a few remarks on the forthcoming Country Partnership Strategy which is still under preparation.

Porto Romano 

It has been alleged that the Porto Romano site has been recently added to the Integrated Coastal Zone Management and Clean-Up Project under the project’s recent restructuring. This is not correct.

In 2003, the United Nations Environment Program (UNEP) commissioned an environmental assessment which identified five (5) priority environmental hot spots for clean-up in Albania.  The former chemical plant in Porto Romano, Durres was ranked the first because of the grave risks the sites posed to human health, groundwater, and marine habitats. The study recommended urgent action and called upon the international community to immediately provide emergency assistance to these priority areas.

In 2004, the Government requested World Bank support for the remediation of the Porto Romano site.  Meanwhile, the Netherlands Government expressed its interest in supporting the clean-up.  A Japanese PHRD grant of US$250,000 financed the preparation of the feasibility study for the remediation.  Then later in 2004, the Bank agreed to combine the two separate projects for integrated coastal zone management and the clean-up of Porto Romano into one operation − the Integrated Coastal Zone Management and Clean-Up Project.  The Netherlands Government generously committed US$5 million for this clean-up and later in 2006 a parallel €1 million for repackaging and safe disposal of the highly chemical waste stored in Bishti i Pallës to a specialized facility in Germany.

In the meantime, several families who were living on the site have been resettled by the Ministry of Environment and Municipality of Durres, and the Environmental Impact Assessment (EIA) and remediation designs have been completed.  A permit for the works was recently issued and works are expected to start shortly

Land Administration and Management Project (LAMP)

The Land Administration and Management Project (LAMP) is the largest and perhaps the most complex project that the Bank has financed in Albania, at US$56 million (US$35 million from the World Bank) with three ministries – Justice, Public Works and Interior;  and 10 municipalities – Berat, Durres, Elbasan, Fier, Gjirokaster, Kamez, Korca, Lushnja, Shkodra and Vlora.   This project is also co-financed by Swedish SIDA and the Japanese Government.  It has three distinct, but related components.

Component A finances the modernization of Immovable Properties Registration Office (IPRO) and the first-time registration of over 400,000 urban land parcels in some of these cities.  Component A is managed by IPRO under the Ministry of Justice. 

Component B has supported the development of the new urban planning law, GIS technologies, and the preparation of urban plans in eight of these municipalities and is managed by the Ministry of Public Works. 

Both Components A and B faced initial delays, but have recovered and are well underway.

Component C was to have financed two tranches of municipal infrastructure investments.  It is managed by the Ministry of Interior in collaboration with the beneficiary municipalities, and has been, by far, the most problematic.   From project effectiveness in July 2007 through January 2010, Component C has not awarded any civil works contracts, despite consistent efforts and support by the World Bank during its supervision of the project.   Last year, the Bank approached the Government urging them to make the necessary changes to speed up implementation, but without significant improvements.

Idle Bank funds have a cost to the country − by tying up resources that might be better used elsewhere.  Indeed much of our routine dialogue with Government is on measures to accelerate project implementation so that the intended developments are achieved.  In problematic cases, the Bank generally recommends to the Government to cancel un-utilized financing.  In this case, it was becoming evident that these funds would not be able to be utilized before the project’s closing date.

Following the January floods in Northern Albania, the Government made an appeal to the donor community for resources to urgently rebuild damaged infrastructure, in particular drainage and flood protection in the areas which were most affected.  The World Bank does not provide relief/compensation resources as this is not within our mandate, but the Bank’s Emergency Response Policy does allows the Bank to consider reallocation from existing underutilized projects to help finance emergency reconstruction.   The Bank suggested to the Government that they might consider the unused resources in LAMP in this regard.  On April 1, 2010, the Bank received the formal request from the Government to consider such a reallocation within the LAMP project.

The authorities have indicated that they would try to find additional resources from the general budget to cover the four municipalities – Berat, Elbasan, Shkodra, and Kamez – whose projects had finally being tendered or were in the process of tendering to the amount of $1.6 million.    However, if this is not the case, it may still be possible to accommodate these investments under the project, although it may complicate the restructuring process and will require new and different implementation arrangements. 

We understand the frustration of those municipalities whose projects are at an advanced stage of readiness, and encourage a dialogue on these issues between all parties.

Indeed, a team from Washington is joining us in Tirana this coming weekend to continue discussions with the authorities on the restructuring and the procedures for the emergency rehabilitation works. 

Country Partnership Strategy (CPS)

I would like to take this opportunity to comment on the forthcoming World Bank Country Partnership Strategy (CPS) for Albania, for the period from June 2010 to June 2014.  Following discussions with the authorities the Bank is currently undertaking internal reviews, after which the draft strategy will be consulted with Government and other stakeholders.  The CPS will thenbepresented to the World Bank Board of Executive Directors in the early summer.

As part of this process, the Bank has undertaken a review of its investments in Albania over time.  Since 1991, the Bank has invested over almost $1 billion in interest free credits , all across the country.  Even now with $265 million of resources under implementation, Bank-financed investments are present in over 230 communes and 43 municipalities. 

A recent media article raised the importance of considering the impact of this financing on the country’s debt levels and the burden for future tax payers.   In the past, the Bank’s interest-free credits from IDA were essentially 70 percent grant.  Today, Albania has graduated to accessing the Bank’s commercial financing.   This means that under the new CPS, there is a need to be more selective in the number and scope of projects, but also to pay close attention to their implementation rates.

The World Bank remains committed to improving the lives of people in Albania, and working with the Government to ensure it is done in partnership and in the best interests of the country.

Thank you.