Showpiece Factory That Cost Millions is Still Not Operating

More than 10 million euros have been invested in a factory to process animal waste that, years later, is still not working.

In 2010, the EU office in Kosovo and the Kosovo government agreed to co-finance a factory that would be the first one in the region to process animal waste. 

With an initial plan of investment of 7.7 million euros, the factory has so far cost Kosovar and European taxpayers 10 million euros. 

Five years after the first feasibility study was done, in 2010, construction of the factory finished in 2018. 

But an investigation by BIRN shows that the money invested in the new factory has still not resulted in a functional enterprise, mostly due to unfinished work that is the responsibility of the Kosovo government. 

Failures to test the wastewater impiant and government indecisiveness over ownership of the factory – and the lack of a gas tank – are among several reasons why the factory is not yet generating any money for Kosovar citizens. 

In 2018, when the project was inaugurated, it was said that the factory would be a great development for Kosovo, as animal waste would be recycled and generate money.

Although it was hailed as the only factory in the region for the treatment of this type of waste, in fact, a factory of this type was built in Lezhë, Albania in 2020, and is already recycling animal waste into raw material for farming.

The plan was that the bones, skin waste, waste from the organs of animal entrails would be processed to create food products for animals or even be used for cosmetic products.

EU fulfilled its obligations, government did not

The factory is partly a project of the European Union and was initially costed at 7.7 million euros. 

Of this, 5.7 million would come from the European Commission through IPA funds, while another 2 million would come from the government of Kosovo. 

Financial reports show that much more money was paid for this factory in the end, while funds were also paid even for contractors who did not complete the work.

BIRN has requested information from the government, the Food and Veterinary Agency, FVA, and the EU Office in Kosovo to find out whether in the meantime there was a change in the way of financing the project, including the exact amount of funds that have been invested. But the EU and the government have been silent so far. 

The FVA forwarded to BIRN a document stating that the total amount paid by the agency was worth close to 5 million euros, in other words, twice as much money as was estimated at the beginning. 

In total, the factory has cost the Kosovar and European taxpayers over 10 million euros. 

According to files that BIRN has investigated, the works financed by the EU have been completed. The problems arise on the part of the government, as the pledger of the funds, which has not fulfilled its obligations. 

Data show that the EU financed the construction of the administrative and industrial facility and these works were finished according to the pledge and contract as early as December 2017. 

In the first lot of the tender, it was foreseen that construction of the external infrastructure, including the facility for the treatment of wastewater, would be financed by the government.

Before full functionalization, the government was also obliged to approve the legal acts to regulate the operation of this factory as well as decide on the way of its operation: as a public service, a private one, or a mixed form of public-private partnership.

The government has not yet fulfilled these obligations.

The European Union Office in Kosovo told BIRN that it fulfilled its obligations as a partial donor of the project.

“Construction works related to the administrative and industrial facility have been completed and the acceptance-handover certificate was signed on December 29, 2017,” the office said.

However, it added that some more prerequisites are needed to operationalize the factory, and that these are obligations of the Kosovo government.

According to the EU Office, some infrastructure works related to Lot 1 have not yet been completed, such as the wastewater tank and its pipeline infrastructure. 

“Appropriate testing and approval is also needed for the wastewater treatment plant. The plant for the treatment of organic waste will [only] be functional once the prerequisites for sustainable operation and maintenance are met,” the EU Office said.

It explained that the parts financed by the government of Kosovo within the Lot 1 were: the external infrastructure, including the facility for the treatment of waste water as well as the supply of equipment to the plant for the treatment of organic waste.


Silence bout reasons for delay

BIRN has not received answers to requests sent to the government to clarify the reasons for the delay in the work of the project that was financed by them. 

However, the Food Agency stated that while the wastewater plant is located already inside the factory, its testing has yet to be carried out.

According to the agency, the final acceptance of Lot 2 of the construction was carried out in November 2020, whereas final acceptance for Lot 1 of the construction will be realized after testing the wastewater plant inside the factory.

“Meanwhile, the supply and installation of the equipment has been carried out and accepted by the relevant commissions,”  the FVA told BIRN. 

The FVA has indicated that there is also still no decision on how to operate the factory – whether it will be public, private or a public-private partnership.

 “The Ministry of Finance advised us to draw up a feasibility study to assess how attractive the entire activity of handling animal by-products would be and then to choose the possibility of operation,” the FVA noted.

But no feasibility study has yet been launched, and the FVA does not yet have an estimated cost for one. As with the whole project, for the feasibility study as well, the FVA has said it will seek the help of the European Union. 

The EU Office has told BIRN that Kosovo has not fulfilled the condition of having a gas tank. But the FVA said that this tank was not foreseen in the technical projects drawn up by the engineers contracted by the EU.

 “The gas tank was not foreseen in the technical projects drawn up by the engineers contracted by the EU, and only after the establishment of equipment, from the contracting company were we recommended to place a tank sufficient for the operation of the factory,” said the FVA.

BIRN on June 2 asked the the Food and Veterinary Agency for an interview about the entire process of this factory – but it said that it was in the midst of an audit procedure and cannot comment.

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