design of a ppp strategy for korça and capital investment ... - LGPA

DESIGN OF A PPP STRATEGY FOR KORÇA AND
CAPITAL INVESTMENT PLANNING IN POGRADEC
October 2009
This publication was financed by United States Agency for International
Development (USAID). It was prepared by Urban Research Institute for the Local
Governance Program in Albania (LGPA).
Bashkia
Korçë
Bashkia
Pogradec

This work is performed under the USAID contract: DFD-I-00-05-05-00121-00, Local
Governance Program in Albania (LGPA).
Services are provided by Urban Research Institute (URI) under a subcontract no. LGPA –
09 – 008 with ARD, Inc. This document is prepared by:
Edlir Vokopola / Asset Management Expert / URI
Enea Hoti / Lawyer / URI
Sokol Ngjelina / Architect / URI
Fabjola Zeqiri / Finance Expert / URI
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DESIGN OF A PPP STRATEGY FOR KORCA
AND CAPITAL INVESTMENT PLANNING IN
POGRADEC
October 2009
The author’s views expressed in this publication do not necessarily
reflect the views of United States Agency for International Development
or the United States Government.
3

Acknowledgement
Design of the Public Private Partnership Project (DP4) in the municipality of Korca and
the Capital Investment Plan (CIP in Pogradec was financed by USAID in the framework
of the Local Governing Program in Albania (LGPA).
DP 4 and CIP were prepared by Urban Research Institute in collaboration with Working
Groups of respective municipalities of Korca and POgradec. For the preparation of this
study were involved Edlir Vokpola, Fabjola Zeqiri, Ene Hoti, Sokol Ngjelina, Lindita
Oshafi dhe Zana Vokopola.
This project was developed under continuous attention and support of the Mayor of
Korca Mr Niko Peleshi and the Mayor of Pogradec, Mr. Artan Shkembi
For more information about to DP 4 and PIK you can contact Mr. Edlir Vokopola at
(evokopola@uri.org.al) at Urban Research Institute at (www.uri.org.al).
4

Table of Contents
Abbreviations ...................................................................................................................... 6
Background ......................................................................................................................... 7
Component 1: Design a Feasible PPP Strategy for Korca ............................................ 8
1. The Context.............................................................................................................. 8
2. Implementation of Tasks and Description of Activities .......................................... 9
3. Immediate next activities ....................................................................................... 16
4. Legislation consulted for the preparation of LDMP & SHP in Korca................... 18
Component 2: Capital Investment Planning in Pogradec ............................................ 20
1. The context............................................................................................................. 20
2. Implementation of tasks and Description of activities........................................... 20
3. Immediate next steps.............................................................................................. 25
List of legislation consulted .............................................................................................. 26
5

Abbreviations
CIP Capital Investment Program
CEB European Council Development Bank
DCM Decision of Council of Ministers
IPRO Immovable Property Registration Office
LDMP&SHP Land Development for Marked Purpose and Social Housing
Program
LGPA Local Governance Program in Albania
PPP Public Private Partnership
SIDA Swedish Agency for International Development
TAC Territory Adjustment Council
URI Urban Research Institute
USAID United States Agency for International Development
WG Working Group
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DESIGN OF A PPP STRATEGY FOR KORÇA AND
CAPITAL INVESTMENT PLANNING IN POGRADEC
Background
USAID’s Local Governance Program in Albania (LGPA) is working with ten
municipalities throughout Albania to foster local economic growth, improve local
governance, and strengthening civic and private sector engagement in local development.
LGPA aims at encouraging and facilitating local economic growth in target
municipalities through increase in investment, employment and income, ultimately
expanding the local tax base. LGPA provides technical assistance and on-the job training
to staff in these municipalities.
USAID’s Local Governance Program in Albania (LGPA) is assisting the Municipalities
of Korca and Pogradec to strengthen capacities to improve management of their own
assets, and to enhance specific public services throughout a participatory process.
The Municipality of Korca has chosen to increase public assets value for the purpose of
market development and improve housing conditions of families in need, through
developing a Private – Public Partnership based Land Development for Marked Purpose
and Social Housing Program, by using properly municipal assets that were recently
transferred from the state to the ownership of the city.
Pogradec has chosen to better address the needs for a Capital Investment Planning in
infrastructure which will facilitate economic, tourism development and public services
enhancement.
Both components of the project have been identified as of high priority for each
respective municipality. These projects were selected following intensive discussion that
took place between the participating Municipalities and the combined team of ARD and
Urban Research Institute (URI).
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Component 1: Design a Feasible PPP Strategy for Korca
1. The Context
The city of Korca has selected to develop a Public – Private - Partners hip (PPP) on
Land Development for M arket Purpose and Social Housing (LDM PSHP) as part of
an overall program that aims to address housing problems for some 738 homeless
families which have been identified and registered as such by the municipality.
The city has dedicated to the project a parcel of public land, with a surface estimated at
approximately 40,000 m2. This Parcel was recently transferred to the Municipality’s
ownership under a special decree of the Council of Ministers.
A partial urban development plan has also been designed and approved by the municipal
Territory Adjustment Council. With the assistance of URI, for the purpose of the project,
some changes of the plan have been introduced and infrastructure cost estimates have
also been re-evaluated and revised as well.
Location of Project
Parcel
Fig 1: Zoning map of the City of Korca and the location of Project Land Parcel
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The parcel of land dedicated to the project is located in the northern part of the city that is
shown in the zoning map as above indicated. The proposed project area is situated along
boulevard “Rilindja” one of the most important areas of the city, being this way very
attractive to developers and future potential buyers of apartments and commercial space.
The City has asked for URI expertise to help develop a Public – Private – Partnership
project for the Land Development for M arket Purposes and Social Housing Program.
The project in broad terms consists of an assessment and analysis of legal, technical
financial viability and market analysis. It also provides assistance to the city of Korca for
the preparation of standard bidding documents for the selection of a private partner under
an open and competitive bidding process.
The whole process for the preparation of the feasibility study was developed through:
1. Legal analysis, to ensure for the acceptability of the project;
2. Financial study in terms of cost and benefit analysis;
3. Engineering analysis in terms of layout assessment and definition of development
conditions, infrastructure needs and related costs;
4. Evaluate demand and supply of apartment needs in the local market;
5. Stakeholder consultations;
6. Preparation of Terms of Reference and bidding documents, and
7. Assistance to the decision making process of municipal council.
URI team involved with the implementation of the project includes three staff and one
Peace Corp Volunteer who is based in Korca, each one of them assigned with a specific
task of the overall project consistence. The URI team cooperates closely with a selected
team of the municipality, which main task is to ensure information needed and prepare
for endorsing the implementation of the project.
2. Implementation of Tasks and Description of Activities
URI has completed all tasks that are defined by the Scope of Work under a Subcontract
No. LGPA – 09 – 008 with ARD, Inc. A few activities under the second and fifth tasks
may need to be updated should final information to be provided from the municipal staff
and the decision of the municipal council be different from the one which is contained in
the final draft of the feasibility study. However, URI will assist the city to update the
document, as needed, following the Council decision.
Description of activities, achievements and referring documents are provided in the
following paragraphs.
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2.1 Establish and cooperation with a Municipal Working Group
As an initial step, URI introduced the project to the relevant city officials. The project
presentation contained an introduction to the list of activities, timing and a brief
introduction to the principles of PPP, including similar experiences in other countries.
A joint Working Group (WG) was immediately established composed of specialized staff
of the Municipality and URI Consultants. Since the initial stage of project development,
the WG has been an effective and active squad by providing insights and information to
URI experts involved with project implementation.
Working Group continuo to play an active role in the project implementation; its
members have assisted with the preparation of an open discussion of the initial version of
the study in a meeting with representatives of local groups of interest and civic
representatives. They have provided information about several aspects of the study and
finally, in a close cooperation with URI consultants, they are preparing the study for the
approval of the Municipal Council.
2.2 Assemble and analyze available engineering and financial data for the
selected PPP demonstration site
URI has facilitated meetings with directors of other institutions, including, respectively
the Immovable Property Registration Office and the Regional Property Restitution and
Compensation Agency, to collect information on the local market for housing and land
for construction that are located near to the designated project site. In addition, official
letters that were drafted by URI were sent from the municipality to each respective
institution, so that the information collected is official and supports project
implementation.
With the active participation of the Municipal WG members, URI collected all available
information regarding the proposed project site, including former and existing uses;
planned future uses; and infrastructure services needed to support the future uses, housing
needs etc..
URI also verified that the property which is designated to be used for the project has a
secure ownership title. Although there are some families occupying some old buildings
erected within the project land parcel, URI has verified that there are no ownership
claims from any third party. With the encouragement of URI, the city has already
achieved an agreement with all tenants of the existing buildings and has ensured them
that they will be receiving shelter once buildings that are under construction as part of the
CEB project, will be finished.
At the same time, to ensure full rights of ownership over the property, URI has helped the
city to initiate the property registration process. For this purpose, several meetings were
held with the Registrar of Korca, the Head of the Agency for Inventory and Transfer of
Properties, and officials at the Ministry of Interior in Tirana to help complete necessary
documentation required for formal registration of the property, which is finally carried
out successfully.
10

URI developed an Excel spreadsheet based housing needs methodology to calculate and
forecast population, household formation, and housing needs for homeless families over a
10 year period. Calculations include an assessment of the number and structure of
apartments needed based on the structure of homeless family groups. All registered
homeless families have been analyzed and classified based on their incomes and on the
number of family members, as part of project justification chapter. In completing this
task, URI was assisted by WG members who possess required information and skills for
collecting the data in an appropriate reporting format.
Fig. 2: Picture of the designated area for the proposed project
The housing needs spreadsheet contains various project parameters such as: plot surface,
construction surface split into construction surface for housing purpose, and space
dedicated to commercial and social services, roads, parking lots, greening space and play
grounds. The assessment includes calculation of infrastructure costs, investment costs,
allocation of construction and infrastructure costs over a phased out implementation
approach for the project, and a cost - benefit analysis from the municipal point of view. A
conceptual land parceling plan and disposition schedule for the site was also prepared.
URI has set up a successful working communication with the Ministry of Public Works,
Transportation and Telecommunication. In cooperation with Ministry staff, URI assisted
the drafting of an official Instruction 1 that helped shape the relevant legal framework
which constitutes the bases for implementation of the PPP project.
1 Instruction no. 6, dated on 14.05.2009, “On some orientation methods for the calculation of the
construction surface in regard with the selling of the land parcels equipped with infrastructure”.
11

The Instruction defines how to calculate the minimum or base percentage of construction
surface that the municipality can receive in exchange for the land surface it will
contribute as part of a joint investment with the private investor to develop the project.
In addition, URI has taken into consideration, official documents 2 , as well as comments
provided by participants during an open meeting that was held with representatives of
local groups of interest, and suggestions and specific requirements that were put forward
by the mayor and his close staff.
Fig. 3: Partial urban development plan of land parcel proposed for the project
Based on the above inputs, URI has finalized the calculation of the exchange rate of
construction surface with the surface of land designated by the city in developing the
Public – Private – Partnership project for the Land Development for Market
Purposes and Social Housing Program.
This final version of the report contains a complete and detailed legal analysis that
addresses three basic questions that need to be answered in order to proceed with project
development:
2 The Map of Land Value approved with the DCM no. ___, date ________, “On the _________”.
12

1. Does the Municipality have full and clear ownership of the land that they have
dedicated to the project?
2. Are there any legal obstacles that would impede the municipality to develop a
PPP based social housing program?
3. Are there any legal path and procedures identified for implementation of the
project, and has it been confirmed that there are no other obstacles to impede the
municipality on the way of project development?
Following requirements of the Council of Minister’s Decision (DCM) no. 35, which
constitutes the legal bases for the development of the project, upon a special request, the
city has received already an official respond from the local Immovable Property
Registration Office (IPRO), which certifies the land value per square meter. The respond
of IPRO confirms the value of land at the price per square meter equal the one which is
used in the final version of the feasibility study prepared by URI. Under these conditions,
the mayor can now take the study for the consideration of the municipal council, which
approval shall open the green light to the implementation of the project.
All above delineated is assembled in a final Project Study document that is already
submitted for being consideration and comment by the municipal team. The comments of
the municipal staff are taken into consideration and integrated in a final draft Project
Study and the document is submitted for approval of the Municipal Council.
Nevertheless, URI shall continue to assist the city, if changes of the project data will
occur, because of any potential municipal council decision.
2.3 Prepare a set of documents that can be used by the city to conduct a
competition-based PPP selection and disposition process
URI has prepared a set of concession standard documents based on a model used by the
Ministry of Economy, Trade and Energy for the concession of Hydro Power Plant of
ASHTA (Bushat) in Shkoder district.
In addition, URI has prepared a set of public auction standard documents that shall be
used by the city to conduct a competition based PPP selection and disposition process.
The set of documents contains:
- Draft decision of the Municipal Council that approves the:
o Project Study,
o Public auction standard documents,
o Technical specifications, and
o Authorizes the mayor to go on with public bid opening;
- Model of work orders, authorizations and instructions for the preparation of a
concession and/or a public auction case;
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- Standard documents, to include: the form of call for proposal to the general
conditions of a concession contract and selling of public assets under public
auction procedures.
A full package of the standard documents is prepared and become available to the city of
Korca both, in electronic and a hard copy.
2.4 Presentation of an implementable model of PPP for the selected
demonstration site
Based on the engineering, financial and legal analysis, URI has prepared a model of a
PPP for implementation of the municipal Land Development for Market Purposes and
Social Housing Program in Korca. The model shows how the city can use and improve
the management of its own assets for social purpose to address housing needs of
homeless families living in the municipality of Korca. The following flowchart shows
how the PPP model is designed
The proposed project shall ensure construction of 437 apartment units for a total cost of
around 15 million EURO. The city will receive title to some 97 apartment units of
different size, which constitute 13 % of housing needs as compared to a total of 738
families registered as homeless based on some strict legal requirements. Project data are
summarized in the following table:
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Table 1: General data
Nr. General data Uni t Amount
1 Project land surfa ce
m2 35.000
2 Total cons tructi on surfa ce over whi ch % of exchange is applied m2 53.200
3 Basement cons tructi on surface m2 8.535
4 Total cons truci ton cos t Leke 1.489.600.000
5 Total infras tructure cos t financied with pri vate funds Leke 44.600.000
6 Total infras tructure cos t financed wi th muni cipal funds
Leke 17.145.800
7 Infa rstructure cos t financed with municipal and donor funds Leke 38.700.000
8 Cos t of the pa rtial urban study to be financed with pri va te funds Leke 43.844.488
9
Cos t of supervision to be financed wi th municipal funds
Leke 5.000.000
10 Pri ce per m2 of the land as of the official 2008 map of land value
Leke/m2 14.500
11 Total land value Leke 123.757.500
11 Pri ce of construction per m2 Leke/m2 28.000
12 Total inves tment cost Leke 1.762.647.788
12 Average pri ce per m2 of appa rtments in the ma rket leke/m2 45.000
Table 2: Method for calculation of % of exchange, based on the Instruction nr. 6
as of 14.05.2009
II.1 Municipal investment 184.603.300
Land value based on the uni t pri ce per squa re meter as i t is defined by the
2008 land map value
123.757.500
Value of municipal inves tments including supervision and infras tructure 60.845.800
II.2 Private Investment 1.578.044.488
II.3
II.4
Cons truction cos t
1.489.600.000
Infras tructure cos t
Cos t for urban study and
44.600.000
implementa tion desi gn
Total investment (muncipality +
5.000.000
private) 1.762.647.788
Minimum % of exchange rate as the ratio among municipal invet, to the
total invest. 11%
Table 3: Summary of PPP Land Development for Market Purpose and Social Housing Project
Project
Sip of
Land
Nr. of
buildings
Phases baze Construction
Base sip of
Nr. Nr.
construction Total Sip of Allocation of construction surface
apart apart
Municipality Municip private private
housing commercial housing commercial munic Private
(m2) (nr) (m2) (m2) (m2) (m2) (m2) (m2) (nr) (nr)
Phase 1 2.290 6,0 2.290 13.930,0 1.288 484 8.528 3.846 20 75
Commercial block 755 3 755 2525 0 280 0 2.245 0 0
Phase 2 2.456 9,0 2.456,0 16.102 1.669 129 13.277 1027 33 117
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Phase 3 3.034 11 3.034 20.643 2.112 193,6 16.797 1540 44 148
Summary 8.535 29 8.535 53.200 5.068 1.086 38.602 8.659 97 340
Total no. of appartaments
437
% land use (coverage ) 25%
2.5 Assist in structuring the administrative/institutional parameters of a
Competition-based PPP selection and disposition process
Under this task, URI has prepared a set of draft standard bidding documents to facilitate
the city for conducting a competition-based PPP selection and disposition process. The
procurement of the project will be based on the Public Auction law 3 that regulates the
activity of local government entities to sell out pieces of property they own for the
purpose of addressing community social needs and improving delivery of public services.
The set of documents also includes draft decision formats that the city can use for
establishing:
- The Commission for Land Evaluation, and
- The Evaluation Commission for a competition-based PPP implementation.
All documents are provided to the municipality of Korca in both electronic and a hard
copy.
3. Immediate next activities
Further development of the project requires some actions to be carried out by the
municipality of Korca. These actions are stipulated by DCM no 35, dated 24.01.2007,
“On the procedures and forms for selling of construction plots equipped with
infrastructure, for market purpose”, and the related Instruction nr. 6 as of 14.05.2009.
Both documents facilitate implementation of the law no. 9232 as of 13.05.2004. Now that
the municipality has registered the property, has received a ownership certificate and
confirmation about the land price per square meter, the following needs to be carried out
by the city as soon as practicable:
1. Municipal Council approval of the study and the permit for selling the land parcel
in exchange of a construction surface as defined in the study, and along with it,
the approval of standard public auction documents and the authorization of the
mayor to start with public auction procedures;
3 Law no. 9874, date 14.2.2008 “On public auction” and DCM no.1719, date 17.12.2008 “On the
approval of the regulation of public auction”.
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2. Establishment of a Public Auction Unit and Evaluation Commission for the
assessment of proposals and selection of the PPP implementation company.
Approval of the Council is an essential step that must be completed before a public
procurement process can be started.
All steps delineated above are the main responsibilities of the Municipality to conduct.
To facilitate these actions, URI has prepared all necessary paper work for an easy
approval of the council and procurement process that the municipality can conduct at any
appropriate time.
3. Once all above is accomplished, the mayor of Korca will have the green light and
full authority to issue a call for “Expression of Interest”. The city would allow for
not less than 20 days up to a time span as it is judged by the municipal Public
Auction Unit, to all interested firms for preparing and submitting their proposals;
4. Meanwhile, as it is above indicated, an Evaluation Commission (Public Auction
Unit) should have been established at the city level. The commission will be in
charge to short list interested companies and chose the best proposal based on
some general and specific qualification criteria as set forth in the Terms of
Reference that are already drafted by URI and previously approved by the
council.
The fourth step shall be carried out according to the procedures as set forth by the law on
Public Auction, and shall develop within the time span of at least equal the time of
proposal’s eligibility time period (150 days). Selection of the best proposal will allow the
mayor to organize and conduct negotiation and define terms and conditions of the
contract with the awarded company or companies in a potential consortium.
5. Contract negotiation and approval will be the final step of the project preparation
phase.
Once contractual terms and conditions among the city and the winner company have been
set, the mayor will ask for the final approval of the municipal council, which by its
decision will authorize the mayor to sign the contract, and therefore, open the way to
project implementation.
Other steps that follow the signature of the contract shall involve:
6. Revision of the urban planning layout, issuance of the construction plot permit
and the approval of the city Territory Adjustment Council (TAC). The city might
involve the private investor into an international competitive bidding for the
revision of the urban planning layout and the preparation of the detailed technical
implementation design of the project.
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Fig. 4: A preliminary 3 D layout of the LDMP $ SHP in Korca.
7. Following completion of the above step, the private investor shall prepare and ask
for the construction permit from TAC. Once this permit is issued, the private
investor can start with preparation of working site and commence of project
implementation.
8. Project implementation is phased out in three main time sections:
a. 24 to 30 months for Phase 1, including construction of commercial block;
b. 30 to 36 months for Phase 2, and
c. 30 to 36 months for Phase 3.
Implementation of all phases of the Project for Development of Land for Marked
Purpose and Social Housing Program is estimated to take up to 8 years including
project preparation phase.
4. Legislation consulted for the preparation of LDMP & SHP in
Korca
1. Constitution of the Republic of Albania
2. Civil Code of the Republic of Albania
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3. Law no. 8652, date 31.07.2000, “On the organization and functioning of local
government in Albania”
4. Law no. 8744 dated 22.2.2001 “On the transfer of state immovable properties to
local government units ”
5. DCM no. 726, dated 28.05.2008, ”On the transfer from the Ministry of Interior to
the ownership of the Municipality of Korca of the premises of Former Army
Buildings no. 741”.
6. DCM no. 1532, dated 19.11.2008, “On the approval of the final list of the state
public immovable properties that transfers under the ownership of the
municipality of Korca, of the Korca region”.
7. Law no.9232 _2004 “On the housing social programs for homeless habitant of
urban areas”
8. DCM no. 35, date 24.1.2007 “On the procedures and forms of selling of land
parcels equiped with infrastructure for market purpose ”
9. Instruction no. 6, dated on 14.05.2009, “On some orientation methods for the
calculation of the construction surface in regard with the selling of the land
parcels equipped with infrastructure”.
10. Map of Land Value, approved with the DCM no. ___, …
11. Law no. 9874, date 14.2.2008, “On public auction” and DCM no.1719, date 17.12.2008,
“On the approval of the regulation of public auction”.
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Component 2: Capital Investment Planning in Pogradec
1. The context
Pogradec Municipality has asked engineering and financial expertise for preparing a 4
years period Capital Investment Plan (CIP) using as a baseline document the Local
Action Plan for Environment Protection, prepared in 2005 with the SIDA support. CIP
process ensures participation of the public so that the plan gains broad consensus.
Main objective of the project is to prepare a capital plan for investments, that will
coordinate the local investment plan with the central one, resulting thus in a better
management of financial sources with the final aim of improving local infrastructure and
related public services.
CIP identifies all public local assets that will be rehabilitated, upgraded or reconstructed,
schedule for the year in which they will be implemented and the amount of money
needed for each project/intervention. Differently from other experiences in the country
CIP in Pogradec contains a financial analysis, which identifies fiscal potential of the
municipality for funding of CIP implementation, as well as the way this financing will be
generated from.
URI team involved with the implementation of the project includes 3 URI staff and 1
Peace Corp Volunteer who is based in Pogradec. Since the start up of Project, URI has
conducted several and continuous field and office activates which have led to a
satisfactory level of project progress and timely completion of all tasks, thus producing a
qualitative final output, the Capital Improvement Plan of the Municipality of Pogradec. .
2. Implementation of tasks and Description of activities
For the implementation of this component URI has carried out all 4 steps that are defined
as such by the subcontract no. LGPA – 09 – 008 with ARD, Inc., under USAID Local
Government Project in Albania.
2.1 Establishing the Working Group
URI introduced the project in an initially meeting that was held in Pogradec with a broad
participation of city officials. The project presentation contains an introduction to the list
of activities, timing and brief content of the principles and the benefits from CIP for
better management of city assets and improving infrastructure.
A city Working Group (WG) compound of representatives from various departments of
the municipality was established and remains functional since the beginning to the end of
the project development.
20

A city Discussion Working Group (WG) with a broad participation of heads of main city
departments and representatives of various groups of interest, including civil society,
business and citizens was also established and has remained functional until the end of
the project development in contributing to a successful CIP analysis.
Representatives of main municipal departments have actively provided insight and
information to URI experts involved with project implementation.
2.2 Revaluate and Restate the Municipality’s Capital Investment Plans
In addition of what was evidenced by the former Local Action Plan for Environment
Protection that was prepared in 2005, and an initial structure of the local urban plan that
seems to be underway, URI has collected and consulted all available documents that
contains various lists of priority infrastructure projects, list of capital investments planned
for financing under 2009 budget, the list of inventory of all local assets, all
complemented with site seeing and meetings with all departments of the municipality, so
that other information was ensured for the formulation of a broad list of a Capital
Investments.
Several meetings with the municipal WG have been conducted to consider a preliminary
list of capital investments, so that an initial broad list is created. URI has designed and
provided the WG with an assessment system that is used from them to prioritize the
needs, so that an initial broad inventory of priority capital investments is also prepared.
2.3 Prepare and Review Draft CIP
URI has designed and provided a template and has guided the WG to conducting a more
thorough physical inventory and evaluation of various indicators of each one of the
proposed infrastructure projects as part of the capital investment plan.
While a broad list that constitutes a capital inventory is formulated and discussed with the
Working Group, URI has provide guidance to city departments in defining rehabilitation
costs, physical parameters of each project and expected outcomes that would derive from
their implementation.
To ensure a broad public participation in the preparation of CIP, under continuous URI
suggestion and guidance, the municipality has printed out over 100 copies of the initial
Capital Inventory and disseminated it to the citizen’s using the municipal Information
Center as a distribution point. Citizens are required to provide comments and point out
their priorities for infrastructure and public service they mostly need.
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Fig. 4: Preparation process of Capital Investment Planning
The initial broad inventory of priority capital investments was discussed in two open
meetings with the Discussion Working Group that involved the participation of city
officials, members of civil society, business representatives and selected citizens.
Fig 5: Pictures showing the open public discussion of the CIP in Pogradec
Following the first two meetings, a preliminary final list of capital improvements was
discussed in a third open meeting that took place in the movie theater of the city. Over
100 citizens and representatives of various groups of interest from Pogradec participated
in the CIP open meeting. Assisted by URI staff, the deputy mayor of the municipality
introduced to a broad public the proposed 2010 – 2014 capital improvement plan for the
city of Pogradec. Discussions and comments that were generated from the participants to
the open meeting were collected by URI experts and reflected to the final draft of CIP
document.
22

URI has also conducted an assessment of municipal fiscal capacity for financing of the
CIP, as well as the identification of other current and future financial sources necessary
for implementing the project.
Fig 6: Selection of some particular projects as part of the 2010 – 2014 CIP.
The initial draft of 2010 – 2014 CIP document, includes 71 projects out of which 15 %
represent improvement of roads and sidewalks, 14 % compound tourism development
projects, culture and sport related projects, and the rest represents various other priorities.
2.4 Prepare and review Draft CIP
Following a step by step CIP development process, URI and municipal WG have
prepared a Final Draft Capital Improvement Plan for the municipality of Pogradec. The
CIP document is verified as compared to expectations and policies of the Mayor before it
was sent for the final approval of the municipal council.
The final CIP document contains 57 projects that are expected to be financed under
various financial resources such as:
- Own municipal revenues;
- State budget transfers, and
- Donor funding.
The final CIP document represents the capital improvement path guidance to the city
officials and citizens that have taken an active role in the preparation process. For each
one of the projects that are included in the CIP, one will find the following information:
- Layout of project localtion;
- Phots showing location and exicting consditions;
- Name of the project, desription of expected imrpovements;
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- Total cost
- Field of development program
Fig 7: Illustration of proposed projects as shown in the final CIP document
A description of the implementation schedule follows the above information. This section
aims at matching costs versus resources for funding implementation of the projects.
Fig 8: Demonstration of project description and implementation phasing out
Information contained in this section details main construction items of projects, costs
and allocation of financing, i.e., whether it is financed from own or other resources.
The document is completed with a financial analysis that shall allow the city to assess
revenue and expenses forecast along the same time span of CIP implementation, in order
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to calculate the surplus for capital financing and identify other financial resources need at
the right time and for a specific projects, therefore to make the CIP implementable.
Tab. 1: Allocation of capital costs and funding resources for the CIP 2010 - 2014
Item Total 2010 2011 2012 2013 2014
Es timated total capital
cost 855.600.000 183.500.000 182.100.000 164.000.000 150.000.000 176.000.000
Total financing of
capital cost s plit
according to resource 842.700.000 170.600.000 182.100.000 164.000.000 150.000.000 176.000.000
Own mun icipal budget 121.600.000 110.000.000 120.000.000 119.000.000 134.000.000
State conditional budget 48.000.000 71.100.000 25.000.000 20.000.000 26.000.000
Partnership
1.000.000 1.000.000 19.000.000 11.000.000 16.000.000
Capital surplus/deficit 12.900.000 12.900.000 0 0 0 0
The above table shows that total capital investment cost for the duration of the CIP is
estimated at approximately 855, 6 million Leke, 70% of which shall be financed by own
municipal budget, while the rest from other sources. The above table does not count for
an ongoing KfW funded project for the reconstruction of water and wastewater system at
the amount of 12,9 million Euro.
3. Immediate next steps
At the end of the process, in a meeting that took place in the city hall of Pogradec on
August 7, 2009, the municipal council approved the Capital Improvement Plan for 2010 -
2014.
Actually the city of Pogradec is preparing to print out the document at B5 format
appropriate for printing from a specialized printing house. As such, the CIP book shall be
distributed to donor organizations and other potential financial resources. City
departments will also use it for planning purpose, while the municipal council will have it
as an indicator to measure the performance of the mayor and his staff.
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List of legislation consulted
1. DMC nr. 726, date 28.05.2008,
2. DMC nr. 1532, date 19.11.2008,
3. Law Nr. 8652 dt. 31.7.2000 “Functioning and organization of local government”,
4. Law Nr. 9232 dt.13.5.2004 ‘”Social programs for housing of people in urban
areas”.
a. DMC nr. 35, date 24.012007, “For procedures and forms of selling the
land equipped with infrastructure for market purposes”;
b. Instruction nr. 6, date 14.05.2009, “Orienting methods for calculation of
living areas for effect of selling the land equipped with infrastructure”.
5. Law Nr. 8744 dt. 22.2.2001 “Transferring the ownership of immovable properties
from state to LGUs”.
6. Civil Code of RA.
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