Municipalities went into collapse, Tirana incinerator profits 7.4 million euros, with a record rate of 47%

2025-02-03 07:50:00, Aktualitet CNA

Municipalities went into collapse, Tirana incinerator profits 7.4 million euros,

Several months late, Integrated Energy BV SPV, the company that has the concession for the Tirana incinerator, has submitted its 2023 balance sheet, which shows that the company achieved a pre-tax profit of 7.4 million euros, with a record profit rate (profit before taxes/revenue) of 47%, or almost half of the money it collected, processing municipal waste and depositing inert soil from private entities.

Since July 31, 2023, the incinerator has been under seizure by the Sequestered and Confiscated Assets Administration Agency, as an investigation by SPAK for abuse and money laundering began.

The balance sheet shows that the company generated total revenues of 1.57 billion lek (15.7 million euros) in 2023, a decrease of 43% compared to the previous year, when total revenues were 2.7 billion lek. The decrease is due to the fact that the company did not report revenues from the performance of investment works under the concession contract, which in 2022 had been 1 billion lek. According to the description in the balance sheet, the latter are revenues from the auto-invoicing process[1] of investments in implementation of the parent concession contract.

In 2023, this item was only 109 million lek. According to the financial statement report, the low level of realized investments is related to the fact that the entity had outstanding liabilities that have created financing blocking situations both from realized profits but also from other financing sources, as the current status of "Preventive Sequestration" has frozen relations with banks as potential financiers of the project.

The incinerator generated its main income in 2023 from "urban waste, soil and inert processing services" for the municipalities of Tirana, Durrës, Vora, Kavaja, which reached a value of 1.16 billion lek (almost 12 million euros), followed by "urban waste, soil and inert processing services for private entities", with a value of 257 million lek (2.6 million euros).

Municipalities went into collapse, incinerator profit rate 47%

In 2023, the municipalities of Kavaja and Durrës accounted for 27 percent of total waste disposal expenditures, and had the highest share of expenditures for this item among all other municipalities, according to their respective budget reports. The municipalities were put in difficulty due to the high amount they had to pay for waste removal, forcing them to seek assistance from the central government.

In other municipalities, environmental spending does not account for more than 10% of the total, with Tirana having this indicator at 10% and Elbasan, at 3.3%, according to data from Co-Plan.

The increase in environmental protection spending came after the closure of the Porto Romano landfill and the transfer of waste to the Sharra incinerator in Tirana. The Municipality of Durrës, according to its sources, generates about 200 tons of waste every day, or about 70 thousand tons per year. According to the contract that the government has with the garbage concessionaire in Sharra, the cost of waste disposal is 29.05 euros/ton for the entire duration of the concession. So every year, the Municipality of Durrës will need at least 2 million euros per year just to pay the concessionaire.

In contrast to the difficulties of the municipalities, the Tinana incinerator, through deposit fees, manages to generate a high profit rate from the “service of processing urban waste, soil and inert”, which in 2023 brought 74% of the incinerator's total income. Profit before taxes in 2023 was 741 million lek, with a profit rate of 47%, which is the highest ever declared, since the beginning of the activity.

Since 2018, the company has generated pre-tax profits totaling 3.2 billion lek (32 million euros) and revenues of 12 billion lek (about 120 million euros).

According to the decision to approve the financial statements, in 2023, this year's profit (610 million lek net) has been decided to remain in the retained earnings account due to the state of the company's administration according to decision No. 95 dated 28.07.2023 of the Special Court of First Instance for Corruption and Organized Crime.

The incinerator has almost 9 million euros in loans, debt problems

According to the financial statement report, in 2023 the situation with banks for loans received improved, as the overdue loan installments were repaid and there are no unliquidated installments. However, the high level of loans, specifically in the amount of 887.5 million lek, exposes the entity to credit and cash flow risk, the report states. The entity also has an agreement deed for the repayment of overdue tax liabilities.

The company, for the works and investments it carries out in implementation of the concession contract and its relevant annexes regarding the respective volumes and prices, performs self-invoicing of the works and investments which are taken into income and expenses for their respective cost./ Monitor Magazine