June 23. 2024. 2:23

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Germany company sues Albania over controversial port project

A German company, EMS Shipping and Trading, has filed a lawsuit against the Albanian state in the ICSID Court of Arbitration in Washington, US, over a concession to operate a terminal at the Port of Durres, which is set for a multi-billion euro facelift.

The company filed the suit on 7 April after previously sending a letter of complaint to the Albanian government, the diplomatic representation of Germany in Albania, and the EU delegation.

Since 2013, the company has owned the right to operate the East Terminal of the port for loading and unloading ships. But current plans to develop the port means the company has to move to the new port, which will be built in Porto Romano. However, as the new port is not built yet, the German company says the continuation of business activities is not certain.

As there are 25 years left of the 35-year contract, this led them to arbitration. Based on the company’s earnings in 2021, totalling €1.3 million, a ruling in their favour could cost the Albanian state tens of millions.

Albania has lost several high-profile arbitration cases in recent years, notably a €110 million lawsuit with Italian businessman Francesco Bechetti who had interests in waste, hydropower, media and football. He was accused of money laundering in 2014, and his assets, including a television station, were seized. Bechetti was then sentenced to 17 years in prison in absentia in 2022 but maintained the action against him is politically motivated.

Another ruling totals $44 million to a road construction company called Aktor, relating to delays in project completion.

Earlier this week, Rama stated he is considering withdrawing Albania from a treaty which protects foreign investors from the arbitrariness of governments, an agreement signed by 160 countries.

When asked by journalists earlier this week, he said, “We are analysing the possibility of leaving the jurisdiction [of arbitration courts] altogether because what has happened is scandalous.”

The treaty he refers to is bound to the ICSID, the same court with which the German company filed its complaint. Departure from the treaty would mean that foreign investors are at risk of arbitrary seizure of assets by a state and would lack recourse in the court.

The project earmarked for the Port of Durres is controversial in itself. Dubai-based Emaar Group are set to develop the area over five years at the cost of €2 million. The plans, which include turning the area into a luxury yacht marina with high-end shops and apartments, raised eyebrows over fears of a lack of transparency and competition.

In November 2022, the EU cancelled a grant of €28 million as a part of the Investment Fund for the Western Balkans, which was set to be used for the Western Terminal of the port.

“As a result of the modification of the project and the change of use of the current port, the EU has cancelled the remaining WBIF investment grant for the previous port project. The EU has followed the discussions in the Parliament about the draft law for the redevelopment of the port of Durrës and is awaiting clarifications from the government,” they stated at the time.

The statement continued: “As for the trade agreement between Albania and the United Arab Emirates, the EU will continue to monitor the importance of the SAA and compliance with it, in dialogue with the Albanian institutions. We are also consulting with government representatives about investment priorities.”

The Albanian opposition parties maintain the project is an abuse by the government, while the government maintains it is an important investment in the country’s future.

(Alice Taylor | Exit.al)