The 30-year concession agreement regarding water supply & wastewater disposal, serving the approx. 100,000 inhabitants of Elbasan, Albania, was the first one of its kind in the country, promoted and supported by the German Development Bank KfW.

The implementation of the agreement was initially significantly delayed. Finally, after five years of operation, in 2007 the contract was suspended in mutual agreement. The Albanian institutional and legal framework, provided still for too many obstacles and financial threads in terms by tariff approval or tax regulations, to allow a private concessionaire Elber shpk to generate neccessary income.

The KfW-financed capital investment programme remained under the supervision of BWI until its final conclusion, although the municipality had resumed operation responsibility, using the concessionaire’s staff, systems and equipment.

Scope of services
The scope of services provided by BWI und KfW contract and through Elber shpk included, but was not limited to:

• Rational planning, tendering of works, and supervising refurbishment and expansion of efficient to operate water supply & sanitation facilities and networks;
• Establishment of a efficient private utility operation company including setting up a lean organisation structure, planning HRD, define and implement appropriate systems, organise training and education of staff and coach staff members-on-the-job.

The measures resulted in:

• Improved customer satisfaction through better service quality and better customer care;
• Increase of revenue by expansion of the service areas, by better billing and collection control systems and, last but not least, by coaching middle management in revenue collection enforcement;
• Cost reduction by increasing the efficiency of water production, transmission and distribution through rational planning, combined with targeted investments and coaching / human resources development.

However, it was not possible for the concessionaire to exercise the contractual right to adapt the tariffs as required to cover the costs.