Identifier
Created
Classification
Origin
09TIRANA346
2009-06-08 09:49:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tirana
Cable title:
ALBANIA COULD LOSE OVERFLIGHT FEES
how-toVZCZCXRO2872 OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG DE RUEHTI #0346 1590949 ZNR UUUUU ZZH O 080949Z JUN 09 FM AMEMBASSY TIRANA TO RUEHC/SECSTATE WASHDC IMMEDIATE 8175 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUEAIIA/CIA WASHDC PRIORITY RUEHVEN/USMISSION USOSCE PRIORITY 2498 RHEFDIA/DIA WASHINGTON DC PRIORITY RUCNDT/USMISSION USUN NEW YORK PRIORITY 0821 RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY RUEKJCS/SECDEF WASHINGTON DC PRIORITY
UNCLAS TIRANA 000346
SIPDIS
SENSITIVE
DEPT FOR EUR/SCE J.ISMAIL
TREASURY FOR V.ATUKORALA
E.O. 12958:N/A
TAGS: EFIN ECON EAIR PGOV AL
SUBJECT: ALBANIA COULD LOSE OVERFLIGHT FEES
UNCLAS TIRANA 000346
SIPDIS
SENSITIVE
DEPT FOR EUR/SCE J.ISMAIL
TREASURY FOR V.ATUKORALA
E.O. 12958:N/A
TAGS: EFIN ECON EAIR PGOV AL
SUBJECT: ALBANIA COULD LOSE OVERFLIGHT FEES
1. (SBU) According to General Electric, a Belgian court has awarded
GE some portion of overflight fees Eurocontrol pays to Albania for
providing air traffic control for high altitude flights crossing
Albanian airspace. Albania receives roughly USD 20 million per year
in overflight fees.
2. (SBU) In 2005, newly-elected PM Berisha decided that a USD 90
million contract his predecessor signed with GE for a light rail
system between Tirana, Durres, and the airport was illegal and
cancelled the contract. GE sought remedy under their contract
through binding arbitration and was awarded a 14 million euro
judgment last summer. GE executives tried repeatedly to negotiate a
win-win solution. Last September, a GE vice president met with
Berisha to discuss a proposal which could have meant future business
for GE while reducing the GOA's liability, all to no avail.
Finally, in December 2008, GE informed the GOA that it was taking
additional steps to collect, including domesticating the award in
the U.S.
3. (SBU) GE has not disclosed details of the award, but this will
put further pressure on the GOA's budget problems. With revenues
down due to global economic weakness, an unexpected loss of revenue
will hurt. The GOA will have to continue providing air traffic
services and making payments on a USD 30 million loan to Ex-Im Bank
and PNB Paribas. Depending on the judgment, some fraction, or
possibly all of the overflight fees will be diverted to GE.
Additionally, Eurocontrol policy requires profits to be reinvested
in infrastructure improvements or the country must reduce overflight
fees it charges the airlines the following year. This could cost
the GOA another ten million euro in lost revenues next year above
and beyond the GE award.
WITHERS
SIPDIS
SENSITIVE
DEPT FOR EUR/SCE J.ISMAIL
TREASURY FOR V.ATUKORALA
E.O. 12958:N/A
TAGS: EFIN ECON EAIR PGOV AL
SUBJECT: ALBANIA COULD LOSE OVERFLIGHT FEES
1. (SBU) According to General Electric, a Belgian court has awarded
GE some portion of overflight fees Eurocontrol pays to Albania for
providing air traffic control for high altitude flights crossing
Albanian airspace. Albania receives roughly USD 20 million per year
in overflight fees.
2. (SBU) In 2005, newly-elected PM Berisha decided that a USD 90
million contract his predecessor signed with GE for a light rail
system between Tirana, Durres, and the airport was illegal and
cancelled the contract. GE sought remedy under their contract
through binding arbitration and was awarded a 14 million euro
judgment last summer. GE executives tried repeatedly to negotiate a
win-win solution. Last September, a GE vice president met with
Berisha to discuss a proposal which could have meant future business
for GE while reducing the GOA's liability, all to no avail.
Finally, in December 2008, GE informed the GOA that it was taking
additional steps to collect, including domesticating the award in
the U.S.
3. (SBU) GE has not disclosed details of the award, but this will
put further pressure on the GOA's budget problems. With revenues
down due to global economic weakness, an unexpected loss of revenue
will hurt. The GOA will have to continue providing air traffic
services and making payments on a USD 30 million loan to Ex-Im Bank
and PNB Paribas. Depending on the judgment, some fraction, or
possibly all of the overflight fees will be diverted to GE.
Additionally, Eurocontrol policy requires profits to be reinvested
in infrastructure improvements or the country must reduce overflight
fees it charges the airlines the following year. This could cost
the GOA another ten million euro in lost revenues next year above
and beyond the GE award.
WITHERS