Albanian railways - beyond a basket case

It was another lecture that underlines why there is hostility to transnational organisations such as EU and the World Bank. This was the story of Albanian railways, a classic example of a country’s state-owned rail system being allowed to wither and almost die while continuing to suck up huge amounts of subsidy.

Albania was the last country in Europe to get a standard gauge rail network, as it was built after the Communist regime took over in 1947. Long-serving dictator Enver Hoxha invested considerably in the network, given that car ownership was very low and there was little alternative given the poor state of the roads. After the fall of Communism, the railway was neglected and passenger numbers have fallen from 10,000 per day to barely 200 - enough for four bus loads.

The World Bank was asked to analyse the situation and provide solutions. In his lecture, Antonio Nunez painted a bleak picture of the 265 miles of mostly single-track railway which also now carries barely any freight. The extent of neglect is such that in the capital, Tirana, the station has been demolished to make way for a new road project and passengers have to take a rail replacement to the suburbs to catch onward rail connections. There are five return train services per day, and yet more than 1,000 people work for the railway company (Hekurudha Shqiptare).

Nunez set out a series of possible solutions, from total closure to a massive investment scheme to modernise the network. However, and here is the maddest part: the whole thrust of his recommendations had to fit in with EU rules about running a rail network, and therefore his plans all contained recommendations to split the infrastructure from the operations in order to attract competition for running services.

The poor fellow was a bit put out when I pointed out that trying to separate out such a tiny and underused railway into separate entities was nothing short of insane, as was trying to attract private investment into a dying network. But he said that the Bank had to work within the framework set by the EU.

Of course, if it is to survive, the railway needs investment and reform. But that could really only come from the state, and such a small business would be much better run as an integrated entity.

It is that sort of dogmatic approach that has led to much of the dislike of the EU and other transnational organisations. Perhaps Nunez will go back to the Bank and advise them differently, but sadly I suspect not.