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Energy, tourism, infrastructure best prospects for foreign investment in Albania - US State Dept.

Energy, tourism, infrastructure best prospects for foreign investment in Albania - US State Dept. Skanderbeg square, Tirana, Albania

TIRANA (Albania), July 12 (SeeNews) – Energy and power, tourism, water supply and sewerage, road and rail, mining, and information communication technology represent the best prospects for foreign direct investment in Albania over the next several years, the US Department of State said.

However, foreign investors cite corruption, particularly in the judiciary, a lack of transparency in public procurement, and poor enforcement of contracts as continuing problems in Albania, the State Department said on Thursday in its annual Investment Climate Statements for 2019.

“While numerous judges and prosecutors have been dismissed by a vetting commission for unexplained wealth or organized crime ties, foreign investors perceive the investment climate as problematic and say Albania remains a difficult place to do business,” it added.

According to the State Department, investors report ongoing concerns that regulators use difficult-to-interpret or inconsistent legislation and regulations as tools to dissuade foreign investors and favor politically connected companies.

“Regulations and laws governing business activity change frequently and without meaningful consultation with the business community; business owners and business associations frequently note they did not receive enough notice, time, or opportunity for engagement on regulatory and legislative changes,” the State Department said, adding that major foreign investors report pressure to hire specific, politically connected subcontractors and express concern about compliance with the Foreign Corrupt Practices Act while operating in Albania.

The increasing use of public private partnership (PPP) contracts has narrowed the opportunities for competition, including by foreign investors, in infrastructure and other sectors, while poor cost-benefit analyses and a lack of technical expertise in drafting and monitoring PPP contracts are ongoing concerns. The government had signed more than 200 PPP contracts by the end of 2018.

Property rights remain another challenge in Albania, as clear title is difficult to obtain, the US Department of State said, adding that there have been instances of individuals manipulating the court system to obtain illegal land titles.

“Compensation for land confiscated by the former communist regime is difficult to obtain and inadequate.  The agency charged with removing illegally constructed buildings often acts without full consultation and fails to follow procedures.”

Transparency International’s 2018 Corruption Perceptions Index ranked Albania 99th of 180 countries, a drop of eight places from 2017, making Albania to be perceived as the most corrupt country in the Western Balkans.

“While it improved by two spots, to 63rd, in the World Bank’s 2019 Doing Business survey, Albania continued to score poorly in the areas of enforcing contracts, registering property, granting construction permits, and obtaining electricity," the State Department added.