US Mafia Bechtel: Albania-Kosovo Highway Costs Soar To 2 Billion Euros (137 km)

US ambassador to Kosovo hired by construction firm he lobbied for

EU diplomat criticises way Christopher Dell pushed through deal for Bechtel Corporation to build controversial highway to Albania

  • in Washington, Lawrence Marzouk and Petrit Collaku in Pristina, and Erjona Rusi in Tirana

23 Apr 14
>Albania-Kosovo Highway Costs Soar To 2 Billion Euros

Cache of official documents detail for first time how lobbying, poor-planning, “uncompetitive tenders”, failure to set cost caps and “inflated” prices left Albanian and Kosovan taxpayers with a two billion euro bill for just 137km of road.

Petrit Collaku, Erjona Rusi, Besar Likmeta, Lawrence Marzouk

Pristina, Tirana, London

Albania-Kosovo Highway during construction in 2009 | Photo by : Besar Likmeta

The ‘Patriotic Highway’ slices its way through one of the poorest and most remote corners of Europe, where many villagers still live on the breadline, struggling to make ends meet.

This four-lane, 137km stretch of asphalt connecting the Albanian and Kosovan capitals has drained in the region of two billion euros from the state coffers of both nations – diverting funds from other much-needed infrastructure projects, such as the building of schools, hospitals and minor roads, many of which remain unpaved.

Following a six-month investigation, BIRN is now publishing previously unreleased documents from Kosovo and Albania that detail the scale of mismanagement and spiralling costs that have so far sparked three investigations into alleged corruption, abuse of office and wrongdoing linked to the contract.

Built on the premise of creating wealth from increased trade and tourism, the final price tags for the road at least doubled in both countries from those initially quoted.

Trade between Albania and Kosovo has seen only a modest increase since the road opened last year, but it has not led to the queues of trucks commonly seen at other Balkan borders. Experts estimate the road is being used at just 10 per cent of its capacity.

On the other hand, construction firm Bechtel-Enka pocketed profits running into hundreds of millions of euros thanks in part, critics argue, to a contract “heavily weighted” in their favour, high pricing and tax rebates.

Fast-track tender

The contract to build the first stage of the highway – connecting Tirana with the Kosovo border – was awarded in 2006 in a fast-track procurement process, which the World Bank and others argued was uncompetitive and unlawful.

US construction giant Bechtel and its Turkish partner, Enka, won the contract to build a 60km mountainous section for 418 million euros.

The US Embassy helped override World Bank and IMF concerns over the handling of the Albanian tender process, arguing the road would boost the economies of both Kosovo and Albania.

In the end, costs escalated with Tirana eventually shelling out 950m euros for the road, according to a leaked email from the then Minister of Finance, Ridvan Bode.

The contract to build the Kosovo section was awarded in April 2010 to the same partnership, following lobbying by the then US ambassador to Kosovo, Christopher Dell.

Dell has since been hired by Bechtel as a country director in Africa, raising questions among observers about the probity of the deal.

A Bechtel spokeswoman Michael Michelle strongly denied any impropriety and insisted Dell had followed US State Department rules as soon as the company approached him with a potential job offer as he prepared to leave Kosovo, including recusing himself from any matters related to the firm.

But a senior diplomat, Andrea Capussela, who had been charged with supervising Kosovo’s economy, called for the State Department to review Dell’s support for the scheme in light of the former ambassador’s new job.

There is no suggestion Dell did not comply with US “revolving door” regulations. While there is a one-year “cooling off” period before former ambassadors can lobby the US government on behalf of a private firm, they are not prevented from taking a job in the private sector with a company they helped secure a contract for.

Costs in Kosovo escalated too after the government failed to heed its own legal advice and set a fixed price for the road. The cost rose from 400 million for 102km of highway to 838 millon euros for 77km.

Bechtel-Enka received more from the Kosovan public purse in 2011, 2012, and 2013 than any other ministry. At the same time, other infrastructure projects, including new schools, were put on hold.

BIRN has obtained key material gathered for the aborted prosecution of Lulzim Basha – the Albanian politician who signed the deal in Tirana – on charges of abuse of office related to the contract.

The documents reveal that Bechtel-Enka’s prices were known to be more than double that of local contractors, costing Albanian taxpayers an extra 191 million euros.

According to the prosecution papers, “all the prices submitted by the winning company are many times higher than the Albanian prices”. The figures were compiled by two state auditors who produced a 158-page report, until now unpublished, detailing problems with the highway contract.

The findings formed the basis of the prosecution’s case against Basha and two of his advisers, Andi Toma and Armand Telti. All denied any wrongdoing and the case was dropped in 2009 on a legal technicality.

Signing of the contract Front row: Mike Adams, president, Bechtel Civil; Fatmir Limaj, Kosovo Minister of Transport and Communications; Sinan Tara, Chairman, Enka. Back row: Christopher Dell, ex-U.S. Ambassador to Kosovo; Hasim Thaci, Kosovo Prime Minister; Metin Husrev Unler, Turkish Ambassador to Kosovo; Andrew Sparkes, British Ambassador to Kosovo.Photo courtesy of Kosovo Ministry of Transport and Communications

‘No price limit, no plan’

The prosecution team argues that because the contract was signed off without an agreed cost limit or detailed construction plan, the price spiralled seemingly out of control.

Prosecutors also criticised the appointment of Ecorys, the Dutch consultancy firm hired to pick the winning bid, as “unlawful” because the firm’s role was announced before the council of ministers even approved the decision to appoint a consultant.

The fast-track tender process – in which four shortlisted firms were evaluated on their ability to do the job without having to provide a price – was described by prosecution investigators as contrary to national and international law. …………


13 Jul 15

Ex-Bridge Watcher Helped Build Kosovo’s “Patriotic Highway”

A ringleader of the 2011 violent uprising against the Pristina government worked for public figures close to the ruling Kosovo Albanian party to cash in on construction of the country’s €1bn ‘patriotic highway’.

Minister Schreiben an den Vorgänger Finanzminister Ridvan Bode: über die Kosten u.a. der Strassen. Aber die EU und USA können ja auch keine Auskunft geben, wo die Gelder im Irak, Kosovo, Afrika verbleiben sind. Von den Banditen haben die Albaner auch diesen Profi Murks gelernt, wie man hohe Geldsummen stiehlt, Ausschreibungen manipuliert.

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