Identifier
Created
Classification
Origin
09TIRANA259
2009-04-24 11:12:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tirana
Cable title:
SERIOUS QUESTIONS ABOUT ALBANIA'S FOURTH CELLULAR LICENSE
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UNCLAS TIRANA 000259
SIPDIS
SENSITIVE
DEPT FOR EUR/SCE J.ISMAIL
TREASURY FOR V.ATUKORALA
E.O. 12958:N/A
TAGS: ECON EFIN PGOV AL
SUBJECT: SERIOUS QUESTIONS ABOUT ALBANIA'S FOURTH CELLULAR LICENSE
Ref: 08 TIRANA 632
SUMMARY
-------
UNCLAS TIRANA 000259
SIPDIS
SENSITIVE
DEPT FOR EUR/SCE J.ISMAIL
TREASURY FOR V.ATUKORALA
E.O. 12958:N/A
TAGS: ECON EFIN PGOV AL
SUBJECT: SERIOUS QUESTIONS ABOUT ALBANIA'S FOURTH CELLULAR LICENSE
Ref: 08 TIRANA 632
SUMMARY
--------------
1. (SBU) Parliament on April 23 passed a law awarding Albania's
fourth cellular license to the PTK consortium, consisting of Kosovo
Post and Telecommunications and a group of Albanian businesses. The
law bypassed Albania's tendering procedures and followed a decision
by the Telecommunications Regulator (AKEP) to cancel the tender for
lack of competition. Before AKEP could announce a new tender, the
Minister of Telecommunications suddenly initiated a procedure to
award the license to one of the bidders. The Council of Ministers
drafted a law which was then rushed through the Parliamentary
Commission on Law. A number of business groups have called the
GOA's procedures illegal while the opposition has remained generally
quiet. End summary.
Tender For The Fourth Mobile License
--------------
2. (U) On December 8, 2008 the GOA announced an international tender
for a fourth GSM license. The decision was welcomed because
cellular rates have remained among the highest in Europe (reftel)
despite the entrance of a third mobile operator in March 2008 into a
market dominated for almost seven years by a duopoly of AMC and
Vodafone.
3. (U) Three consortia expressed interest but only two submitted
financial and technical offers by the February 20 opening: Univers
PG, bidding five million euro, and the consortium of Post and
Telecommunication of Kosovo (PTK) with a group of Albanian
investors, bidding 7.2 million euro. The Bid Evaluation Commission
of AKEP, however, informed bidders that it would suspend the
evaluation process since Univers PG's bid did not meet the tender's
requirements. (Note: A Council of Ministers decision requires at
least two qualified bidders for all tenders. End note.) When
neither bidder appealed the decision, AKEP terminated the tender.
At this point, a new tender should have been announced.
GOA Bypasses Its Own Procedures
--------------
4. (SBU) To everyone's surprise, the GOA decided to award the fourth
license by a direct decision of Parliament, or as PM Berisha prefers
to call it, "a collective decision." Minister of Telecommunications
Olldashi sponsored Council of Ministers decision No. 319 on April 1,
which proposed to Parliament the draft law "On granting the fourth
mobile license to the consortium of PTK and Albanian Investors."
Parliament approved the law on April 23 despite a boycott by the
Socialist Party opposition. (NOTE: The SP boycott was unrelated to
the mobile license tender. END NOTE). The DP's motives could
include a desire to show the electorate they are doing something
about high cell phone bills, or that they are trying to buy the
support of businessmen in the consortium. SP reaction to the law
has been surprisingly quiet. The SP might fear negative voter
reaction if they opposed measures that could reduce cell phone
rates. However, SP leader Rama threatened to unhook the award if
his party wins.
COMMENT
--------------
5. (SBU) Corruption remains Albania's largest impediment to foreign
investment and is most visible in land registration issues and
high-margin monopolies such as telecommunications and petroleum
production and import. Mobile licenses provide corrupt politicians
and powerful oligarchs opportunities to steal from the population
since the government controls the regulator, sets telecom policy,
and has now set a precedent for awarding a tender. However, the
blatancy of the Council of Ministers in pushing aside the GOA's
established procurement laws and regulations, and simply awarding
the license to a chosen company, is a new low for Albanian
regulation (or lack thereof). In the end, the decision to ignore
established regulations might be nothing more than election year
politics, but it sends a disturbing signal about Albania's
commitment to rooting out high-level corruption.
WITHERS
SIPDIS
SENSITIVE
DEPT FOR EUR/SCE J.ISMAIL
TREASURY FOR V.ATUKORALA
E.O. 12958:N/A
TAGS: ECON EFIN PGOV AL
SUBJECT: SERIOUS QUESTIONS ABOUT ALBANIA'S FOURTH CELLULAR LICENSE
Ref: 08 TIRANA 632
SUMMARY
--------------
1. (SBU) Parliament on April 23 passed a law awarding Albania's
fourth cellular license to the PTK consortium, consisting of Kosovo
Post and Telecommunications and a group of Albanian businesses. The
law bypassed Albania's tendering procedures and followed a decision
by the Telecommunications Regulator (AKEP) to cancel the tender for
lack of competition. Before AKEP could announce a new tender, the
Minister of Telecommunications suddenly initiated a procedure to
award the license to one of the bidders. The Council of Ministers
drafted a law which was then rushed through the Parliamentary
Commission on Law. A number of business groups have called the
GOA's procedures illegal while the opposition has remained generally
quiet. End summary.
Tender For The Fourth Mobile License
--------------
2. (U) On December 8, 2008 the GOA announced an international tender
for a fourth GSM license. The decision was welcomed because
cellular rates have remained among the highest in Europe (reftel)
despite the entrance of a third mobile operator in March 2008 into a
market dominated for almost seven years by a duopoly of AMC and
Vodafone.
3. (U) Three consortia expressed interest but only two submitted
financial and technical offers by the February 20 opening: Univers
PG, bidding five million euro, and the consortium of Post and
Telecommunication of Kosovo (PTK) with a group of Albanian
investors, bidding 7.2 million euro. The Bid Evaluation Commission
of AKEP, however, informed bidders that it would suspend the
evaluation process since Univers PG's bid did not meet the tender's
requirements. (Note: A Council of Ministers decision requires at
least two qualified bidders for all tenders. End note.) When
neither bidder appealed the decision, AKEP terminated the tender.
At this point, a new tender should have been announced.
GOA Bypasses Its Own Procedures
--------------
4. (SBU) To everyone's surprise, the GOA decided to award the fourth
license by a direct decision of Parliament, or as PM Berisha prefers
to call it, "a collective decision." Minister of Telecommunications
Olldashi sponsored Council of Ministers decision No. 319 on April 1,
which proposed to Parliament the draft law "On granting the fourth
mobile license to the consortium of PTK and Albanian Investors."
Parliament approved the law on April 23 despite a boycott by the
Socialist Party opposition. (NOTE: The SP boycott was unrelated to
the mobile license tender. END NOTE). The DP's motives could
include a desire to show the electorate they are doing something
about high cell phone bills, or that they are trying to buy the
support of businessmen in the consortium. SP reaction to the law
has been surprisingly quiet. The SP might fear negative voter
reaction if they opposed measures that could reduce cell phone
rates. However, SP leader Rama threatened to unhook the award if
his party wins.
COMMENT
--------------
5. (SBU) Corruption remains Albania's largest impediment to foreign
investment and is most visible in land registration issues and
high-margin monopolies such as telecommunications and petroleum
production and import. Mobile licenses provide corrupt politicians
and powerful oligarchs opportunities to steal from the population
since the government controls the regulator, sets telecom policy,
and has now set a precedent for awarding a tender. However, the
blatancy of the Council of Ministers in pushing aside the GOA's
established procurement laws and regulations, and simply awarding
the license to a chosen company, is a new low for Albanian
regulation (or lack thereof). In the end, the decision to ignore
established regulations might be nothing more than election year
politics, but it sends a disturbing signal about Albania's
commitment to rooting out high-level corruption.
WITHERS