Tirana Impressions

UNCLAS SECTION 01 OF 02 TIRANA 000646 SIPDIS STATE FOR EUR/SCE E.O. 12958: N/A TAGS: PGOV PREL EAID EFIN PHUM AL SUBJECT: Tirana Impressions Tirana Airport Partners Surpass Expectations -------------- ¶1. Tirana Airport Partners, the consortium that won a 20 year concession to manage the Tirana International Airport (TIA), finalized last week stage B of the modernization and expansion of the airport. The 20 million euro stage B investment, which was preceded by a 50 million euro stage A investment, will enable the airport to serve to 1.5 -1.8 million passengers annually. The Albanian-American Enterprise Fund is part of the TIA consortium that led the airport's performance to new heights. ¶2. The number of passengers going through TIA has increased steadily, reaching 1.26 million passengers by the end of 2008, surpassing the 1 million passenger target three years ahead of projections. This allowed TIA to start stage B of expansion earlier than planned. The positive trend continued even during 2009, despite the global economic slowdown, with the number of passengers 9% higher for the period January-July 2009 compared with the same period of last year. Thanks to greatly improved infrastructure and services and higher security standards, the number of airline companies has increased in quantity and quality with British Airways and Lufthansa entering the market in 2008 and with summer direct flights to and from New York for the second year. This makes TIA administration optimistic for the future of the airport. ¶3. The consortium, lead by German company Hochtief, signed a 20 year concession contact with the Nano government in April 2005 (right before the 2005 general elections.) The contract stipulates that during the contract's lifetime TIA has exclusive rights to all international flights into and out of Albania. Considering the Kukes Airport has been ready since 2006, and is sitting there as a useless asset and the need to have another airport in South Albania for tourism purposes, the consortium's monopoly on international flights has been the subject of much discussion. Rumor has it that the government has attempted to negotiate a deal with the Hochtief consortium, and it remains to be seen if TIA might allow another international airport to open in exchange for extending its TIA concession. Tourism development -------------- ¶4. A recent initiative launched by PM Berisha during a meeting of the Council of Ministers has fueled heated discussions about the already chaotic process of property restitution and registration. The PM called on the government to draft a law that will allow the privatization of land by those who have built residential resorts in tourist areas. So far, resort developers have lease contracts for 99 years. Berisha said that privatization revenues will be used to compensate the original land owners. ¶5. Since 1994, 32 licenses have been issued for the construction of tourist resorts under the law for the promotion of tourism. Almost all of these resorts are located in the area near Durres, since it provides easy access to the capital Tirana and many of them are built in privately owned land. The law granted tax cuts to the developers, but required developers build tourist resorts. However, out of the 32 developers which received tax breaks, only two have observed the law while the rest have been transformed into residential resorts developments. ¶6. A strong opposition to the PM's initiative came from the so-called "Former Owners Association", which represents people whose land was confiscated by the communist regime. Owners' representatives said that this initiative will further increases confusion and the potential for corruption, since land is very valuable in these areas. They ask that they be entitled to deal directly with the current occupants of their properties. ¶7. Unclear property titles remain a major hassle for the economic/social development of the country. Over the course of years, politics has not been able to play a constructive role in achieving a transparent, fast and sustainable process with property restitution and registration. This new initiative might imply a constructive goal, but there are already accusations that the government wants to favor individuals close to it and raise some additional revenues. In the event this initiative succeeds it is very likely that, as in the previous process of the legalization of squatters, will create new tensions and raise new accusations against the government. Pre-school classes offered for the first time -------------- -- ¶8. Against the backdrop of 100th year of the National Congress of Elbasan, the Ministry of Education and Sciences has given the green light to a pilot project to open 100 public pre-schools throughout the country. Students attending these classes will be between five TIRANA 00000646 002 OF 002 and six years old. Classes will be taught by very experienced teachers, and most of these classes will be held in Tirana, due to the higher demand. Although pre-schools and daycare centers have existed for some time in Albania, none of them were part of the public school system. ¶9. The National Congress of Elbasan was held September 2-9, 1909 with a purpose of establishing a school, the Normal School of Elbasan, which would train teachers for careers in education. These teachers served as educational pioneers for the country.