It was spring of 2007 when gathered around a table in Baku, Azerbaijan, high EU officials decided to take one of the biggest decisions that would change the fate of many countries, economic and political wise. They decided to cut the dependency with Russia over gas by opening the way for a multi-billion infrastructure project that would supply Europe with a new gas source. That spring the love affair with the Trans Adriatic Pipeline had just started and Albania was among the contenders, a bit shy but with lots of potential.
Now, 9 years down the line, like every respected long love story, the project had its ups and downs with discussions and a lot of lobbing, but we managed to put a tube on TAP.
Which is turning to be a blessing. These days, everyone is turning their eyes on Albania, as TAP is seen with great potential. Since this is a priority of the European Union, EU member states are signing agreements to have their part on the TAP construction. 200 million Euros from the Norwegians. French also are building part of the pipeline, while other countries have expressed interest in this investment.
By being part of this project, Albania might hold the key on resolving many problems at the same time. This way, we do not only become a bridge for Europe but also resolve our own problems.
Experts say that the energy crisis may come to an end only after the construction of the gas pipeline. The construction of new hydropower stations, which will operate with gas, will undoubtedly be a solution to the crisis, experts say.
The Trans Adriatic Pipeline (TAP) will transport natural gas from the Turkish-Greek border through Albania to its tie-in point near Lecce in Italy. In doing so, the project will enhance the security of Europe’s energy sector by increasing the diversity of supply.
But let’s talk numbers, and see if we have enough reasons to cheer up from this big investment.
An Oxford study tells us that we should have a huge grin on our face as the numbers of employment ratio and revenues go skyrocketing. While Albanian consumers will certainly benefit from it as gas is cheaper than electricity, which is used for heating and cooking as well as the industry.
“This is one of the biggest investment in the history of our country. In the next three years from the construction of TAP the GDP is expected to increase with about 160 million Euro a year and our economy in the next 20 years will benefit 1 billion Euros”, said Prime Minister Edi Rama, in June last year when the construction of the pipeline started to take place and is about will continue until 2018.
The direct impact of the project is projected to peak in 2017, at which point activity according to the Oxford study is expected to generate €57 million for Albanian GDP and create 4,200 jobs (part-time and full-time).
The report from Oxford Economics breaks the data on how TAP will impact the Albanian economy. Headline results are presented for three key metrics (contribution to GDP, headcount employment (including both part-time and full-time jobs) and tax revenue raised) and three channels of impact (direct activity by TAP AG, indirect activity stimulated by supply chain purchases, and activity induced by the spending of employees). Together with these benefits, a number of “catalytic” or “spillover” effects will have their say on the economic boost this project will have on the economy.
In total, the construction phase of the project is forecast to generate €157 million in GDP and support 2,900 jobs (part-time and full-time) per year. Moreover, further benefits will accrue via the spending of employees with a rise in the contribution to GDP and the support of almost 3,900 jobs (part-time and full-time) per year.
In all the time frame of the project, it will be created around 20.000 jobs, which is quite an impressive number for our small market. Moreover the operational effects are scheduled to continue past the period of the project for 50 years, providing a consistent boost to Albanian economic activity. In total, the project’s operational direct impact will contribute a cumulative €500 million to Albanian GDP over the operational horizon.
The Albanian government will be the main beneficiary with high revenues and extensive contributions to the treasury, but not only. So we can bid adieu to hardship in our economy.
The infrastructure, as part of the project, TAP AG intends to invest €60 million in Albania’s road infrastructure. And the value of “spillover” benefits from this investment is likely to fall between €237-€1,107 million over the proceeding 20 years. Evidence from other studies suggests that the true value is likely to be towards the higher end of this range.
But most importantly it will give our economy the boost it craves for so long. Even this year projection of 3.3% economic growth, according to EBRD will be attributed also to the construction of the pipeline, which is foreseen to boost the economy. Other International Financial Institutions like IMF or Moody, believe that TAP will increase the potential of growth for the Albanian Economy.
Albanian experts have described TAP as an opportunity that would benefit Albania both economically and politically, making the country an important hub of the international gas pipeline for the Western Balkans./AgroWeb.org/