PPP/ Albania third in the world, after Brazil and Peru, for fiscal risks

Albania ranks third in the world after Brazil and Peru for fiscal risks, which stem from the termination of concession contracts with Public-Private Partnerships (PPP), analyzes a recent World Bank study "Mitigating risks from accounts outside of fiscal indicators".

The bank points out that of the countries under study, the fiscal risks from the early termination of active PPPs are the highest in Brazil, Peru and Albania with reference to 2020.

Fiscal risks from the PPP portfolio are estimated at 0.87-2.78 percent of GDP in Brazil, 0.44-1.19 percent in Peru, and 0.44-1.17 percent in Albania (see bottom chart).

The World Bank advises that these figures represent the amount, as a percentage of 2020 GDP, that governments should set aside today as an emergency fund to cover the maximum expected loss over the entire contract period.

Premature terminations of PPPs are rarer than renegotiations, but their fiscal costs tend to be greater. In Mexico, the cancellation of toll roads created a significant cost to the treasury and contributed to the increase in debt by 1.6 percent of GDP in 1997.

That's how the government in India paid $2.4 billion for the canceled Dabhol power project in 2001.

The World Bank assessed the risk of PPP concession contracts through three scenarios, low, medium and high.

Në skenarin e ulët, qeveria mbulon 79.3 për qind të borxhit të PPP-së rast përfundimi të parakohshëm. Në këtë rast qeveria nuk mbulon humbjen e kapitalit të privatit, por vetëm kapitalin e vet në PPP.

Në skenarin e mesëm, qeveria mbulon të gjithë borxhin dhe kapitalin privat, duke garantuar kështu financimin total të projektit. Vlera është e barabartë shumën e investimit të akumuluar në PPP.

Në skenarin e rrezikut të lartë qeveria e kompenson privatin për 150 për qind e kapitalit që investoi në projekt, në përputhje me kushtet e kontratës të përdorura në disa vende, si India.

Banka botërore sugjeron se Shqipëria duhet të ruajë një kontigjencë në buxhet me vlerë 1.1 të PBB-së për të mbuluar problemet që mund të vijnë nga ndërprerjet e parakohshme të kontratave koncensionare me PPP.

The contingency fund must be reviewed every year also depending on the end of the contracts./ Monitor

Happening now...

19:44 SPORT

Manchester City make almost 74 million euros and goalkeeper for Newcastle defender

19:36 POLITICS

"The general of the army is imprisoned!", Together Movement protests in front of the Parliament against Balluk and Rama

19:24 SPORT

Bologna on the verge, Chivu: We go onto the field with great desire, we aim for trophies

19:14 HAPPENING NOW

For the first time, direct flights between Albania and Canada

19:10 HAPPENING NOW

Drug gang busted in Greece, including 22-year-old singer from Tepelena

19:07 HAPPENING NOW

AKSHI, nothing before it/ Journalist warns of mega-scandal with properties after the digitalization of the Cadastre

18:57 SPORT

Poland challenges Albania, Piszczek: I expect an open game, we must be careful with them

18:43 POLITICS

The Special Court confirms "house arrest" for the head of the AKSHI and her deputy

18:34 POLITICS

Berisha removes Salianji as political leader in Unit 6

18:32 SPORT

Yamal dethrones Messi and Ronaldo, sets record in jersey sales

18:23 HAPPENING NOW

Gjenden mbetje njerëzore në Rahovec, dyshohet se mund t’iu përkasin viktimave të luftës në Kosovë

18:21 SPORT

He was fired from Serbia after the loss to Albania, he could become a coach in the red and black striker's team.

18:15 POLITICS

Berisha mbërrin në Kavajë, nis ceremonia e 35-vjetorit të themelimit të degës së PD

18:12 SPORT

The 17th week of the Superiore is played on Friday & Saturday, the classic stands out

Want to read more news