The epilogue to a story that has been rumored for a few months now has further developed these past days in the most unfortunate circumstances. This is the story of Fier and Vlora bypasses, two contracts that started together and have both ended in a complicated mess of financial misconduct.
The contracts were signed in the beginning of 2000s and were financed by the European Bank for Reconstruction and Developement (EBRD) to build Tirana–Orikum highway, so that the Ionian coast would be more accessible for the development of tourism.
The first contract to build Fier bypass was granted to Serenissima Construzioni spa in 2013. Serenissima is a company founded by a public group, the owners of Italian Milan–Venice highway, to assure the maintenance and improvement of the highway by an Italian company.
Many debates ensued amongst Albanian developers after Serenissima was granted this contract, because the company won the competition with an offer many times lower than the initial value presented at the auction. The price offered by the company was, in fact, much lower than the real cost of the work.
Serenissima has a “nominated general subcontractor” in Albania, C.A.E. shpk, which is able to open all doors of politics and public administration. After a long negotiation process and higher guarantees demanded by EBRD, the contract was signed.
Meanwhile, the preliminary work for the Vlora bypass continued slowly. There was a continuous debate about the traffic deviation on the road that leads to Vlora Lungomare. Several problems were created at the port entrance during the last few years.
After many discussions and evaluations, the change of governments and official functionaries, a project is designed and put up for competition. Surprisingly, Serenissima wins it again with a price that is once again much lower than that of its competitors.
Serenissima Construzioni, the same company that doesn’t produce the expected results in Fier.
Works of Fier bypass are proceeding only slowly. Initially, excuses were used such as the lack of expropriations. Later, the company tried to renegotiate technical conditions of the project make some profit from a really low price presented at the competition, and finally the whole issue ended up in court.
In Fier, meanwhile, problems have cropped between the Italian company and its Albanian subcontractor. Reasons are again the low prices and issues related with payments to Albanian subcontractors.
The work site was blocked and the whole case has ended up in court. Italians wanted to oust the subcontractor but they have a signed contract with them which locks them in and blocks their legal case.
For a higher security, the Albanian subcontractor has forced a seizure of Serenissima bank accounts; as a result the latter cannot conduct or arrange any payments.
The legal battle continues with a constant change of attorneys, while the Italian company reopens the site with new subcontractors. Same thing happened at the Vlora bypass. The company cannot pay the new subcontractors because the bank account has been blocked in Albania and the institutions that can make payments to Italy are not able to do so.
In September 2016, the ownership of the company in Italy changed. The powerful company A4 Holding spa, the sole owner of Serenissima Construzioni, was acquired by Albertis from Spain, which is the biggest private group in Europe for highway management. The Spanish company starts to puts order to the investment methods conducted by Serenissima.
The presence of a public road construction company is not considered strategic, and the presence of internationals even less so; the company is losing money. The sites it owns around the world are few and far between and produce no profit, therefore the Spanish decided to sell off some of the sites. But selling isn’t so simple because the situation at different sites is complicated.
Because of bank guarantees, legal disagreements, changes during work, delays, criminal issues, and the inability to fire the old workers the situation in Albania has become increasingly complicated and so all sites have stopped working.
The situation is a perennial complication of events. Serenissima cannot pay the old subcontractors because the legal case has not been settled. Due to the legal matters, the bank accounts of the company have been seized. Even though Serenissima has concluded the majority of the work, it cannot acquire payments from government while the new subcontractors remain unpaid.
One of the subcontractors, an Italian supplier of work material for Serenissima, has little experience in Albania and trusting the country’s development, decides to purchase shares of Serenissima Construzioni spa, on March 23.
This doesn’t sit well with the creditors of the company, who on their part own large debts and with the old subcontractors that still are in court for months asking for payments.
All creditors, one way or another, gave credit to Serenisisma, believing that it was controlled 100 percent by a highly powerful financial company with and estimated turnover at €600 million and yearly revenue of €40 million. So they all thought they were protected from the aforementioned facts.
This doesn’t sit well with the Albanian government either, which demands cancellation of the contract a few days before the shares were to be transferred to the new owner. The company is advised that if all sites are not reopened by April 6, 2017, then the contract will be cancelled indefinitely.
It is not certain whether the new owner had been informed about government’s decision at the time it signed the company’s acquisition.
Serenissima’s attorney and its new owner, made also as the delegated administrator of Serenissima at the latest creditors’ meeting, have done everything to not be notified of the government’s decision. Only the final intervention of the Directorate of Employment, which is a government department, has forced workers to sign that they were notified of government’s decision.
The attorney’s actions show his disregard for the government’s decisions and his desire for it not to become official.
Now that creditors are confused, discussions go on, time goes by, and the work on site is on hold because the subcontractors are not ready to restart their work if they are not paid the late payments worth at several million euros.
The new owner demands patience and time from the creditors and the government since he wasn’t aware of the real situation, while he is looking for necessary liquidity to pay the money owed to creditors and to restart work on site.
The creditors demand cancellation of the sales contract because they want to get paid by A4 Holding, which is certainly more secure, but harder to attack in court.
The government should demand a solution of the situation without cancelling the contract, because otherwise the site wouldn’t work for at least twenty straight months. Two other touristic seasons will pass without a finished road, which was an electoral promise and now risks becoming a political cost.
The middleman between Serenissima and Prime Minister Rama is Maurizio Pagani, General Director of A4 Holding (the one who sold), with a past connection to Serenissima in Albania together with Favio Tosi, Mayor of Verona, shareholder of A4 Holding at 4.6%.
The municipality of Verona is also the prime shareholder of AGSM spa. This company is owned by the municipality and it manages waste collection in Verona. It has also entered into a joint venture with the municipality of Tirana for waste collection and processing.
Maurizio Pagani is a banker. Intesa San Paolo Bank had appointed him to lead A4 Holding many years ago. At that time the company of Verona A4 Holding as a result of a series of unsuccessful financial moves.
Flavio Tosi was a prominent face of Lega Nord Party. He became mayor of Verona and later went against the Lega Nord, and unsuccessfully ran for the Presidency of the Veneto region.
Now he is out of national politics but is looking to get a place in finance, leading these impossible actions in Albania, which are hard to explain even to the citizens of Verona because of their triviality and weak economic practices.
Maybe A4 Holding has sold its shares to the new owner of Serenissima Construzioni because it wants the general director to interfere with the Albanian government again. If it wanted to confirm financial guarantees given at the time, an attorney or an official of low level would have served him better.
The hypothesis entertained by several Italian and Albanian sources show that unlucky investments of Serenissima outside of Italy were part of an older management practices (Pagani included) in order to cover or facilitate shady and in most cases disagreeable business (harming old shareholders, Intesa Bank, Ansladi, etc.). These would then be later sold off to transfer the responsibility and especially the documents, in order to cancel financial problems discovered by the Spanish company. This practice has been often followed by companies owned from public institutions in Italy.
And now, according to the same sources, Tosi and Pagani “must” politically interfere in the Albanian government to delay the process of contract cancellation (on April 7) and to trick a careless buyer while calming the Albanian and Italian creditors and tourists that have to wait still longer.
If this interpretation is correct the Albanian government once again (this and the one preceding it) has put a bet on a fake economic operator that arrived in Albania only to get fake papers.