VZCZCXRO8158
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTI #0259 1141112
ZNR UUUUU ZZH
P 241112Z APR 09
FM AMEMBASSY TIRANA
TO RUEHC/SECSTATE WASHDC 8070
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEHVEN/USMISSION USOSCE PRIORITY 2482
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0808
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY

UNCLAS TIRANA 000259 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/SCE J.ISMAIL 
TREASURY FOR V.ATUKORALA 
 
E.O. 12958:N/A 
TAGS: ECON EFIN PGOV AL
SUBJECT:  SERIOUS QUESTIONS ABOUT ALBANIA'S FOURTH CELLULAR LICENSE 
 
Ref:  08 TIRANA 632 
 
SUMMARY 
------- 
 
¶1. (SBU) Parliament on April 23 passed a law awarding Albania's 
fourth cellular license to the PTK consortium, consisting of Kosovo 
Post and Telecommunications and a group of Albanian businesses.  The 
law bypassed Albania's tendering procedures and followed a decision 
by the Telecommunications Regulator (AKEP) to cancel the tender for 
lack of competition.  Before AKEP could announce a new tender, the 
Minister of Telecommunications suddenly initiated a procedure to 
award the license to one of the bidders.  The Council of Ministers 
drafted a law which was then rushed through the Parliamentary 
Commission on Law.  A number of business groups have called the 
GOA's procedures illegal while the opposition has remained generally 
quiet.  End summary. 
 
Tender For The Fourth Mobile License 
------------------------------------ 
 
¶2. (U) On December 8, 2008 the GOA announced an international tender 
for a fourth GSM license.  The decision was welcomed because 
cellular rates have remained among the highest in Europe (reftel) 
despite the entrance of a third mobile operator in March 2008 into a 
market dominated for almost seven years by a duopoly of AMC and 
Vodafone. 
 
¶3. (U) Three consortia expressed interest but only two submitted 
financial and technical offers by the February 20 opening:  Univers 
PG, bidding five million euro, and the consortium of Post and 
Telecommunication of Kosovo (PTK) with a group of Albanian 
investors, bidding 7.2 million euro.  The Bid Evaluation Commission 
of AKEP, however, informed bidders that it would suspend the 
evaluation process since Univers PG's bid did not meet the tender's 
requirements.  (Note:  A Council of Ministers decision requires at 
least two qualified bidders for all tenders.  End note.)  When 
neither bidder appealed the decision, AKEP terminated the tender. 
At this point, a new tender should have been announced. 
 
GOA Bypasses Its Own Procedures 
------------------------------- 
 
¶4. (SBU) To everyone's surprise, the GOA decided to award the fourth 
license by a direct decision of Parliament, or as PM Berisha prefers 
to call it, "a collective decision."  Minister of Telecommunications 
Olldashi sponsored Council of Ministers decision No. 319 on April 1, 
which proposed to Parliament the draft law "On granting the fourth 
mobile license to the consortium of PTK and Albanian Investors." 
Parliament approved the law on April 23 despite a boycott by the 
Socialist Party opposition.  (NOTE: The SP boycott was unrelated to 
the mobile license tender.  END NOTE).  The DP's motives could 
include a desire to show the electorate they are doing something 
about high cell phone bills, or that they are trying to buy the 
support of businessmen in the consortium.  SP reaction to the law 
has been surprisingly quiet.  The SP might fear negative voter 
reaction if they opposed measures that could reduce cell phone 
rates.  However, SP leader Rama threatened to unhook the award if 
his party wins. 
 
COMMENT 
------- 
 
¶5. (SBU) Corruption remains Albania's largest impediment to foreign 
investment and is most visible in land registration issues and 
high-margin monopolies such as telecommunications and petroleum 
production and import.  Mobile licenses provide corrupt politicians 
and powerful oligarchs opportunities to steal from the population 
since the government controls the regulator, sets telecom policy, 
and has now set a precedent for awarding a tender.  However, the 
blatancy of the Council of Ministers in pushing aside the GOA's 
established procurement laws and regulations, and simply awarding 
the license to a chosen company, is a new low for Albanian 
regulation (or lack thereof).  In the end, the decision to ignore 
established regulations might be nothing more than election year 
politics, but it sends a disturbing signal about Albania's 
commitment to rooting out high-level corruption. 
 
WITHERS