Dear Minister Cani,
Dear Minister Haxhinasto,
Representatives of Ministry of Finance, Ministry of Transport and Infrastructure, and of Albania Road Authority,
Ladies and Gentlemen!
I am pleased to be here with you today at the signing ceremony for the Albania Results-based Road Maintenance and Safety Project, the second World Bank assisted project we signed with the Government of Albania during this year. I am grateful to the Minister of Transport and Infrastructure for his guidance during project preparation, and to the Minister of Finance for his continuous support.
The World Bank has over two decade long engagement in Albania’s transport sector with successful results in two transport and roads projects that closed in recent years. In fact, in several areas, these projects’ exceeded their original targets. This new project comes on the heels of this positive experience.
In the transport sector, roads and highways are the major mode of land transportation in Albania. Roads provide vital links for goods and population mobility and are a key public asset, supporting economic growth and job creation. The Government is committed to address the key challenges in the transport sector, and especially in the following three areas: first, moving away from ad hoc planning and budgeting to implementing public investment management programs in transport that are well prioritized and resourced, and contribute to macro-fiscal stability and growth; second, contributing to successful fiscal consolidation by ensuring no new arrears are accumulated in the roads sector – of the Lek 17 billion capital investment arrears accumulated in the past , about Lek 15 billion – or 85% of the total - were in the roads sector; and third, rebalancing resources between new investments and road asset management/maintenance.
Albania’s road asset value is estimated at around $6 billion. The budget for maintenance and management of this valuable national asset has, in the recent past, been as low as only 10 percent of total expenditures. We are encouraged by the Government’s efforts to initiate much needed reforms in the sector and especially in these areas. The approval of the Medium Term Budget Plan 2015-17 that prioritizes new investments is an important step in this direction. It will be equally important to ensure that new investments are adequately financed through the life of a project.
Improvement and maintenance of existing road networks benefits communities by providing better access to social and health services, education facilities, and markets. Road users all over the country benefit from improvements in road maintenance, through less travel times and vehicle operating costs. Moreover, another critical challenge is road safety, which remains a major social and public health issue in Albania.
Annual road accident fatality rates are at least double that of most neighboring countries, and ten times higher than several Western European countries. The Government has set an ambitious target and aims to reduce the number of fatalities by 50 per cent by 2020, promote implementation of the Road Safety Strategy and Action Plan and adoption of mandatory Road Safety audits for all new roads.
The Results-based Road Maintenance and Safety Project will assist Government in the areas noted above. It will support improvement and maintenance with over 1300 kilometers of national road networks through rolling out 5 year performance based maintenance contracts. We hope this contributes to a mind-set change in asset management and preserves Albania’s valuable assets. At the same time, it will support sector reforms including assisting Government in finalizing the Transport Sector Strategy, and supporting the shift to fiscally sound public investment programs in line with the medium-term budget framework.
As the Project’s name suggests, success will be measured through achievement of results. It supports improvement and maintenance of national roads network through performance-based maintenance contracts. Financing will be made available during implementation as and when the agreed performance targets and results are met. This is an innovative financing mechanism being used for the first time in any infrastructure project in Albania. We are optimistic that it will demonstrate results to the people of Albania.
In closing, let me acknowledge with deep appreciation the dedication and excellent cooperation of the teams at the Ministry of Transport and Infrastructure and the Albania Road Authority during the preparation of the project. I am confident that the teams will exhibit similar commitment and oversight during project implementation. I also thank the World Bank team for its hard work and technical support, and for its well-coordinated work with Government in preparing a project focused on results.
We look forward to successful project implementation and to our continued strong collaboration in the coming years. I hope that like the previous transport sector projects, this project also closes on a high note by outstripping its original targets!