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Speeches & Transcripts

Interview of Orsalia Kalanzopulos, World Bank Country Director and Regional Coordinator for Southeast Europe to the Voice of America

December 26, 2007

Orsalia Kalanzopulos, World Bank Country Director and Regional Coordinator for Southeast Europe Voice of America Albania

Transcript

The World Bank Director for Albania, Orsalie Kalanzopulos is quite optimistic when speaking about the country’s achievements as far as development, reforms and poverty reduction is concerned. The Bank’s projects have had a fast implementation rate in all sectors, including infrastructure and energy. In spite of the World Bank’s investments in such strategic sectors, the challenges are still great.

Orsalia Kalanzopulos: “Power sector will continue to be part of the agenda. It is important that Albania diversifies its electricity sources. 99% of the energy domestically consumed comes from the hydro powers. Power is a critical area in which Bank’s investments should continue. Reformation of the power sector is not an easy process. Political will and managerial skills are necessary. The Government is putting a lot of efforts, but a lot remains to be done.”

The Bank Director accepts that the big losses of KESH should be somehow covered through the price increase, but she warns that this should be done with a lot of caution.

Orsalia Kalanzopulos: “The prices should be raised but this needs a lot of carefulness. Undoubtedly, lack of effectiveness in the system has been and is present. The ones, who pay, pay also due to the lack of system effectiveness. There exists no magic formula for the solution to KESH problems. The unpaid bills are a real obstacle. There is a category which does not pay the bills because they are poor, but a subsidy system should be in place for them. The related data and information for defining the poor classes although improved are not complete. The price should get increased, but this should not be an isolated measure. It should be accompanied by other measures, which would contribute to the system effectiveness increase and will improve the billing and cashing process.”

Voice of America: World Bank and IMF have recommended KESH privatization. How long will this process be?

Orsalia Kalanzopulos: “Privatization of power companies takes a long time. It starts out with that part which brings more changes, which is the distribution. This sector should have a positive situation that would attract the private investors. On the other hand, there should exist a convenient international financial market. The process is absolutely crucial. It should be open, transparent and competitive so as to get the highest price. The process has started, but I can not have an answer on its duration.

Voice of America: The most debatable issue this year has been the project of Durres-Kukes road. The selection process of the construction company has been also quite arguable. Can you please clarify us on your attitude on this project?

Orsalia Kalanzopulos: “The process has a quite clear impact on development. It constitutes a possibility to better use the already made investment in Durresi port. It is really good to connect that part of Europe, starting from Durres to Kukes, Morine to the 10-th corridor. From the development point of view the project is quite reasonable. The winning company did not go through the competition process. This is not the contracting way we advise to the governments. Our recommendation has always been for an open, transparent and competitive process, I stress competitive. The decision was made for contracting a certain company. This was not decided by us, but when looking at the economic effects, these were quite positive. There are related risks on which we have called the attention of the Government. For example, the engineering study should not have been made by the construction company. It was very important that Government decided some control points in the system for avoiding cost increase, delays or other surprises. So the project is good, but the company selection process is not the one recommended by the World Bank.”

Voice of America:  Minister Basha mentions always the recommendation received from the Bank about the selection of the company that prepared this project study.

Orsalia Kalanzopulos: Minister Basha asked the Bank about names of engineering companies which would help to keep the project price under control, so that the engineering work is properly carried, so they assist in the project supervision, while the contract was already given. Our team simply provided them with a list of companies used by the Bank in case of related contracts competition. But it was the Albanian Government that selected one of them.”

Voice of America: Can you tell something about your new assignment?  What would be your recommendations for countries like Albania, so that they reach the required standards of the category of average income countries?

Orsalia Kalanzopulos: I feel sorry that am leaving. It is a wonderful region full of challenges and great prosperity. My opinion is that with the solution of political uncertainties around Kosovo, there will be greater possibilities. It is a very dynamic region, undergoing rapid growth and having a wonderful nature, especially I want to mention the entrepreneur spirit found in Albania. Albania is now in its way to EC membership and meeting of standards is the right way. The Bank’s role in the Western Balkan countries is assisting them to meet those standards the quickest way possible so as to become EC members.

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