A former submarine base is located at the northern end of the bay of Porto Palermo.

Porto Palermo was an important base for the Albanian navy during the reign of Enver Hoxha. After the Warsaw Pact was founded in 1955, the Soviet Union stationed twelve submarines there. When the Soviet Union ended its presence in Albania in 1960/61 at Hoxha's request, Hoxha appropriated four of the boats. With Chinese help, construction of the submarine tunnel in Porto Palermo began in the late 1960s. However, China soon withdrew from the joint venture, so Albania completed the construction alone at enormous cost. The tunnel is more than 650 metres long and provided space for four submarines.