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ATCI: Albanian Times, 96-12-17
Albanian Times
December 17, 1996
CONTENTS
[01] Government And Union Agree On Wages
[02] Daimler-Benz To Help Build Service Centers
[03] NEBEX Leading Western Mining Firms
[04] Albanian Banks Unripe For Privatisation
[05] Pyramid Schemes Worry IMF
[06] OXY To Drill Off Albania's Coast By Mid-97
[07] Preferential Tax Regime?
[08] Oil And Gas Deal With Croatian Company
[09] Bids for Radio Equipment And Excavators
[10] Greek Bank In Tirana
[11] EIB Lending Albania ECU 12 Million
[01] Government And Union Agree On Wages
Albania's government and the Independent Trade Union (ITU) agreed on Monday
to a complete overhaul of the former communist Balkan country's wage
system. Radio Tirana quoted Prime Minister Aleksander Meksi he had agreed
with the ITU -- the country's biggest trade union -- on inflation indexing,
gradual wage increases and guaranteeing the real minimal salary in the
private sector. "We shall renovate the agreement with the trade union,''
Meksi told radio. ``It was a successful meeting as all the trade union's
requests were realised,'' ITU president Valer Xheka said. He also said a
``significant hike'' of wages, currently around $65 a month, was planned
for next year. The trade union and a smaller fellow-unionist group held two
strikes in September and October to protest against rising inflation and
higher bread prices -- a sensitive issue since Albania toppled its hardline
communist regime in 1990. The conservative Democratic government of
President Sali Berisha liberalised prices in July after it almost swept the
board in a general election the opposition boycotted. Albania's consumer
prices rose 17.4 percent in November from the same month a year ago.
(Courtesy of Reuters)
[02] Daimler-Benz To Help Build Service Centers
Spurned by an increasing presence of shiny new Mercedes cars in Albania,
Daimler-Benz AG (DAIG.F), Germany's largest industrial company, now has
plans to help build service centers across the tiny nation. Albania's ASA
company has been licensed to build a $3.8 million shop outside the capital.
The project will be partly financed by the Commercial Bank of Albania with
Daimler-Benz providing training for the personnel at its Stuttgart
facility. The first center will be located in Kashar, half-way from Tirana
to the civilian airport and is expected to cover about 4.000 sq meters.
Dietrich Stopwasser of Daimler-Benz said in Tirana his company intends to
spread the service network across Albania. Press reports in sist most of
the Mercedes cars entering Albania are stolen in Germany, then brought into
the country with fake license plates.
[03] NEBEX Leading Western Mining Firms
Canadian mineral exploration company Nebex Resources Ltd (NBX.AL) which has
four concession areas in Albania, will be concentrating its 1997 efforts on
a belt of massive sulfide copper-zinc-gold deposits in Mirdita. The Mirdita
Concession, with approximately 400 square kilometers in area, is deemed to
be the area of greatest interest and promise for locating ore grade
reserves. Within Mirdita's area are two 'exclusion zones', known respectively
as Munella and Qaf Bari, which contain established reserves. The Albanian
state owns these and Nebex continues to work closely with the Government to
have them included in the overall Mirdita Concession. Efforts over the
past 8 months to conclude an agreement have been interrupted by delays
caused by general elections and the formalization of the privatization of
the Albanian copper industry. Other three concessions of the company are in
Kukes, Radomir and Kachinar. The Kukes Concession has known nickel
laterite deposits and is considered by Nebex of considerable interest as
well. The company is leading other Western mining companies in Albania.
[04] Albanian Banks Unripe For Privatisation
Albanian officials envisage bank privatization as a lengthy and step-by-
step restructuring process. Eduard Ypi, Director of Albania's Commercial
Bank, denied reports setting December 31 as the privatization deadline. He
said, the date would signal a restructuring of their assets while the
complete privatization is not expected before 2000. He predicted banks
will most likely pass into the hands of consolidated western financial
institutions rather than those of single local privates. The present
concern is to hold down costs while restructuring an inefficient money
lending system with branches and tellers spread all over the country, Ypi
said. The Commercial Bank hopes to save about $ 1 million through its
planned restructuring. Ypi said Germany's Deutsche Bank has agreed to help
in the process that would shape his bank into a western type institution.
"Besides receiving fees for its service, Deutsche Bank has the strategic
aim to become a major share holder down the road." Bank privatization in
Albania has been seriously hampered by the inability of a sizable share of
clients to pay back their loans.
[05] Pyramid Schemes Worry IMF
The International Monetary Fund has expressed concern over pyramid schemes
flourishing across Albania. An IMF delegation arrived in Tirana to
scrutinize the business, which appears to be shaking consumer spending and
distorting currency markets. Ranjid Teja, head of the IMF mission, said it
was not the fund's responsibility to close down such schemes, but warned
that they could endanger Albania's fragile economic recovery. Pyramid
schemes began springing up about three years ago as young companies sought
cash that the overstretched banking system could not supply. Today numerous
firms are prepared to offer interest rates of up to 50 percent a month on
short-term loans. Many Albanians have scrambled to hand over their hard-won
savings, even selling their homes and livestock in order to join the
goldrush. As a result, retail sales have plunged. Many Albanians working
abroad send their wages home so their families can buy leks to invest in
the schemes, adding to a dizzying rally by the lek against western
currencies this year. The government has said it is looking at ways of
controlling the schemes, but so far has taken little action to end the
queues of hopefuls outside the company offices. Albania's parliament has
set up an independent committee of economic experts to gather information
on the pyramid schemes and report their findings to parliament.
[06] OXY To Drill Off Albania's Coast By Mid-97
Occidental of Albania Inc, will start drilling off the Albanian coast by
mid-1997. Occidental planned to start the $15 million drilling operation
when a floating platform, currently working in West Africa, arrives in
Albania. It plans to drill a well that will be 4,000 to 4,500 meters deep
in block three near the dividing line of Albania's continental shelf with
Italy in the Adriatic. Occidental owns the full concession but it may take
on some minority partners. Once drilling starts it will take about 100 days
to determine whether oil or gas reserves are present. Occidental of Albania
Inc, a unit of U.S. Occidental Petroleum Corp, drilled in the same offshore
block without success in 1994. Occidental came to Albania five years ago
and is now in negotiations with the government to take an onshore
concession.
[07] Preferential Tax Regime?
Despite high growth, Albania has had less success in attracting imports and
foreign investments due to entrenched bureaucracy and preferential tax
regimes. The excise tax regime favors domestically-produced goods over
imports. Imported mineral water is subject to a 20% excise tax, whereas
Albanian mineral water is exempt. Imported soft drinks are subject to a 30%
excise tax, while Albanian producers pay just 5%. Land ownership
regulations have brought confusion to potential investors. Albanian
residents and entities have the right to buy and sell land; foreigners may
own property, as long as their committed investment amounts to around three
times the value of the land (as calculated by the government). This has
created confusion among potential investors, as Albanian law does not
define what constitutes a local or foreign entity.
[08] Oil And Gas Deal With Croatian Company
Croatia's Ina-Naftalin will invest $ 4.7 million dollars over 4 years to
explore for oil and gas in Albania's southern on-shore Panaja-Vlora Block.
According to a deal signed with Albania's state oil enterprise, Alpetrol,
if oil or gas are discovered, the Croatian company will invest 75 percent
of the costs needed to develop and exploit the reserves with Albpetrol
contributing the remaining 25 percent. Total investments in the block are
expected to reach $ 70 million under the 25 year deal.
[09] Bids for Radio Equipment And Excavators
Albanian government has announced 2 separate tenders to buy radio
communication equipment and 7 excavators as part of a loan from the
International Development Association (IDA) and Dutch Government toward the
cost of an Irrigation Rehabilitation Project. The Ministry of Agriculture
and Food is inviting bids for supplies of stationary and mobile radio
equipment, including their installation, and 7 long reach back hoe
excavators of 20-30 tons, for irrigation and drainage channels. Bidding
documents can be obtained by applying to: Project Management Unit,
Irrigation Rehabilitation Project, Ministry of Agriculture and Food,
Boulevard "Deshmoret e kombit" no 3, Tirana, Albania. A non-refundable
payment of US $ 200 or Lek 20.000 is required. (For courier delivery add $
50). All bids must be submitted on or before January 17, 1997 for the radio
communication equipment and on or before January 16, 1997, for the
excavators.
[10] Greek Bank In Tirana
The National Bank of Greece opened its first branch office in Tirana. The
branch will accept deposits in major currencies and in drachmas and is
expected to benefit customers with the security it would provide for
important and high-amount transactions and services. It will offer import
and export financial services, loans and letters of guarantee, thus
facilitating exchange and capital movement abroad. The license was issued
by Bank of Albania (the nation's central bank) based on a 1996 law which
allows foreign banks to operate in Albania. The National Bank of Greece is
expected to open soon a branch in Bucharest.
[11] EIB Lending Albania ECU 12 Million
The European Investment Bank (EIB) is lending ECU 12 million for the
improvement of the power transmission network in Albania. Investments
comprise three transmission sub-stations (Durres, Vlore and Babice) and
transmission lines totaling 140 km in the South and South-East of the
country. The loan will be made available to the Albanian Power Corporation
KESH. Investments should help improve the reliability of the power supply
network by increasing capacity at key locations and bottlenecks. The loan
is the EIB's fourth operation in Albania and brings total EIB lending in
the country to ECU 46 million. Previously granted loans were for the
expansion of the ferry terminal in the port of Durres, the rehabilitation
and improvement of the country's main east-west road, and a global loan to
Bank of Albania, channeled to Banca Italo-Albanese, for the financing of
small and medium-scale enterprises in industry, tourism and services, as
well as energy saving and environmental protection schemes.
This material was reprinted with permission of AlbAmerica Trade & Consulting
International. For more information on ATCI and the Albanian Times, please
write to AlbaTimes@aol.com
Copyright © ATCI, 1996
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