Belgrade-Pristina dialogue to resume at end of this or start of next year (Beta)
European diplomats and analysts have assessed that the Belgrade-Pristina dialogue could be expected to resume only at the end of this or the start of next year, while the region’s European path will have to wait for fundamental changes within the EU. The sources assessed in statements to Beta that German Chancellor Angela Merkel and French President Emmanuel Macron had not sufficiently understood “the complexity of the situation in Kosovo” before their meeting with the leaders of Kosovo and Serbia in Berlin. This was why the meeting in Paris, scheduled for July 1, had been cancelled, because it turned out that the dialogue between Belgrade and Pristina cannot move from the standstill. Pristina’s refusal to abolish the import fees on goods from Serbia, its dismissal of key agreements from the Brussels accords and the demand for unconditional mutual recognition are a reflection of the fact that Kosovo Premier Ramush Haradinaj is convinced that this has secured him strong internal political support and that he has “nothing to lose”. On the other hand, diplomats and analysts believe, Belgrade also has to implement some important agreements with Pristina, especially those pertaining to energy. EU High Representative Federica Mogherini recently discussed the blockade of the dialogue with U.S. Secretary of State Mike Pompeo in Washington, who “reiterated the U.S. support for the EU’s mediation in the normalization of relations between Belgrade and Pristina.” The U.S. is not attempting to change the framework of the dialogue or impose itself as the chief mediator, but wants to assist the Union’s efforts in a more significant way, well-informed sources in Brussels told Beta.
German Ambassador: Dialogue isn’t dead (RTV)
Ambassador of Germany to Serbia Thomas Schieb said that the Brussels dialogue was not dead even after the cancellation of the Paris meeting scheduled for July 1 when the Belgrade and Pristina delegations should have met under the Germany – France auspices. “The dialogue is not dead, it is just not happening at the moment,” the ambassador said to RTV. “The idea and goal of the summit was not to replace the EU’s role and change the format, but to support the current format in which the talks take place.” When asked whose defeat or victory the postponing of the meeting in Paris was, he said that the goal was to restart the dialogue. “The result of the negotiations should be a comprehensive legally binding agreement that contributes to the stability of the region” Schieb concluded.
Stefanovic: Pristina claims regarding Interpol false (Tanjug)
Interior Minister Nebojsa Stefanovic said that the claims by Pristina officials that almost all participants in the debate at the session of the Executive Committee of Interpol had pledged that the membership request of the so-called Kosovo is considered at the General Assembly are absolute false and that they represent a pressure on the members of the Executive Committee while the Committee is in session.
In his statement to Tanjug, Stefanovic explained that the meeting was not the one where the final decision on the agenda for the upcoming General Assembly of Interpol is made. The purpose of the session is just to familiarize the members of the Executive Committee with the request. The final agenda, as well as the decision whether the so-called Kosovo application will be found at the General Assembly, will be known only two days before the session, which is in October, Stefanovic said.
“Despite such unacceptable pressures on the members of the Executive Committee, we will continue to fight hard to protect international law and our national interests. We will defend the sovereignty of Serbia, but also the integrity of Interpol” underlined the minister. Stefanovic pointed out that the defeat in Dubai was clearly not a signal for the Pristina officials, that the pressure cannot be stronger than international law and the rules of the Interpol.
“We are continuing a legal battle. We will once again remind all the members of the Interpola, why the politization of the organization is bad for her future work, but also for the overall security in the world” he said. Stefanovic said that Serbia will again remind all Interpol members that, in accordance with UNSCR 1244, Kosovo and Metohija, is the territory of Serbia and as such cannot be a part of the Interpol. We will also remind the member states of the resolution, adopted by the General Assembly of Interpol at a meeting in Beijing in 2017, which stipulates that only member states or observers in the UN can become members of Interpol, which the so-called Kosovo is certainly not” Stefanovic said.
Drecun: Pristina wants to create conflict with Serbs (Pink TV)
The head of the Serbian Parliament’s Committe for Kosovo warned on Thursday that the authorities in Pristina are trying to start conflicts between Serbs and Albanians. Milovan Drecun said that “the final stage of the plan called tariffs” is underway in order to cause a conflict with the Serbs and state of Serbia. “Pristina is working on causing conflicts” Pink TV. He accused the authorities in Pristina of causing a humanitarian catastrophe by leaving the Kosovo Serbs without basic needs to stop the Belgrade-Pristina dialogue and create conditions for a conflict with the state of Serbia. “We need to keep supplying the Serbs but we have to be very careful so that Prime Minister Ramush Haradinaj and the others in Pristina don’t trap us” Drecun said.
According to Drecun, the goal is to create a situation in northern Kosovo which would be intolerable for the Serbs and would jeopardize their survival and force Serbia to help them. The Albanians would then provoke conflicts with Serbia and the Serbs in northern Kosovo, he said, adding that Pristina wants to lay the blame on Serbia and go down the path of a union with Albania.
Food supplies for north Kosovo (Beta)
President Aleksandar Vucic said that Belgrade would do everything to ensure food supplies for the citizens in North Kosovo, but declined to present any further details. “We are going to do what we can, but I will not say what. We will not allow our people to starve, although many would wish this. And not only those in Pristina and in a part of the world but also here, in central Serbia,” Vucic said when asked to comment on a reported shortage of consumer goods in North Kosovo. Vucic also remarked on Kosovo Premier Ramush Haradinaj’s statement, saying that Pristina had banned goods from Serbia also because it feared Belgrade could ship arms or drugs together with food. “That is an example of the subconscious mind. It is unbelievable. I could be pondering that for one hundred years, but would never come up with such an idea, and it was the first thing that occurred to him. Shortages pose a serious problem and we will deal with it… And if you ask me whether I am expecting anything from the international community – I am not expecting anything. As for the West, we have always been the side to carry more blame, because we have not recognized Kosovo’s independence and everything else is only consequential to that fact. We have to consider the ways of how to help the Serbs and we will do that” Vucic said.
Meanwhile, Serbian Prime Minister Ana Brnabic said that Belgrade had been using “alternative routes” to deliver goods to Kosovo ever since Pristina had imposed 100 percent tariffs on Serbian goods in November last year. Brnabic told reporters in Belgrade that Serbia’s appeals to have the tariffs lifted had been ignored by the international community for seven months now. She added that during that period, Serbia had been trying to deliver goods to the Serb and Albanian population in Kosovo via “alternative routes,” but Pristina, together with the international community, had done everything possible to cut off the routes. Admitting that “alternative routes” could imply the grey economy and smuggling activities, Brnabic said: “Whatever, in the 21st century, we want the Serbs and other people in Kosovo and Metohija to have access to all the goods they wish to buy.” Brnabic called on the international community to facilitate the free flow of goods but stressed that she was not optimistic. “We will try to do everything in our power to enable the delivery of Serbian goods to all in the territory of Kosovo and Metohija” the prime minister noted.
Serbian Trade Minister Rasim Ljajic said that North Kosovo was facing shortages of milk, fruit and vegetables. “Those who have probably profited from this situation include smugglers and the countries in the neighborhood” Ljajic said. He added that the issue of tariffs had turned into an internal political matter in Kosovo, noting that the only “political profiteer” was Kosovo Premier Ramush Haradinaj, who was the one to impose the tariffs.
Bosnia and Herzegovina
B&H HoR discusses situation in judiciary and migrant crisis; SNSD and its coalition partners absent from session (N1)
The second, urgent session of the Bosnia and Herzegovina (B&H) House of Representatives (HoR) was held on Wednesday. Reporter reminded that there were two unsuccessful attempts earlier to hold this session. The agenda of this session consisted of two items: the current situation in judiciary institutions, and information of the B&H Council of Ministers about control and managing of the migrant crisis in B&H, with an accent on the current security and humanitarian situation in the Una-Sana Canton. Reporter noted that MPs from SNSD and its coalition partners failed to attend the session. However, necessary quorum was achieved because five MPs from Republika Srpska (RS) attended the session, including MP from SDA Adil Osmanovic.
B&H HoR adopted several conclusions. Among other things, they called on all members of the High Judicial and Prosecutorial Council (HJPC) of B&H to resign. They also adopted a conclusion requesting formation of a parliamentary investigation commission that will be tasked to interview holders of judicial offices in order to establish facts about the situation in B&H judiciary. On the other hand, the B&H HoR failed to support any conclusion concerning the migrant crisis in B&H proposed by MP Jasmin Emric (A-SDA). It was also concluded at the abovementioned session that amendments to the Law on HJPC of B&H stipulating new solutions concerning appointment of judges and prosecutors, as well as the system of control of judicial sector will be sent to the parliamentary procedure soon. MPs emphasized that the HJPC cannot be “untouchable” institution as it is the case now.
Deputy Speaker of B&H HoR Nebojsa Radmanovic (SNSD) stated that Wednesday’s work of the B&H HoR was completely illegitimate from the RS’ point of view and from the point of view of representatives of Serbs in the B&H Parliament. Radmanovic further said that “they are trying to secure legitimacy by force without two Serb Caucuses composed of nine representatives and with one Serb Caucus with four representatives in it of which two are already ministers.”
Chair of SNSD Caucus in B&H HoR Stasa Kosarac stated: “We demand the authorities to be formed immediately and without any preconditions based on democratically expressed will of citizens at the elections. We do not agree with the Parliament of B&H giving legitimacy in any way to those the Serb people in the RS did not elect as their representatives”. Kosarac also noted that “politicians from Sarajevo again managed to find some Serbs from the RS who announced they will sue representatives of SNSD because of alleged failure to work in the Parliament of B&H and failure to attend sessions” and he added that such announcements are nonsense because no law prevents representatives to express their political stances. According to Kosarac, “SDA leader Bakir Izetbegovic and his mentors in individual embassies in Sarajevo” should think about what kind of chaos they are producing and also about what will be the result of this chaos.
President of the B&H HJPC Milan Tegeltija reacted to the Wednesday’s conclusions of the B&H HoR according to which HJPC members have been called to submit their resignations. In his reaction, Tegeltija stated that the B&H HoR’s conclusions represent direct undermining of a democratic division of authorities on legislative, executive and judicial. Tegeltija assessed that calls for resignations are contrary to the principle of division of authorities and represents a classic example of populism. According to Tegeltija, the B&H HoR’s conclusions on formation of the inquiry commission to investigate the situation in judiciary, and particularly in the HJPC, does not fall under the jurisdiction of the B&H Parliament. The HJPC President warned that this represents serious interference of legislative authorities into the work of judicial authorities and, as such, it is completely absurd, impermissible, and explicitly undermines independence of judiciary. He concluded that, at that respect, the B&H HoR’s conclusions cannot be implemented.
Dodik: Republika Srpska will form gendarmerie (RTRS)
The chairman of the Presidency of Bosnia and Herzegovina (B&H), Milorad Dodik, said that Republika Srpska (RS) will form a gendarmerie force to provide safety for its citizens. Dodik said that a police reserve force could be useful, that is, that it could be engaged is certain ad hoc situations such as the migrant crisis. “However, an atmosphere was created as if RS is being militarized, which is not true. I am all for demilitarization and for certain police forces to remain operational” he added. The RS Interior Ministry has withdrawn from the Law on Police that is being deliberated by the RS Assembly the provisions envisaging the forming of a reserve police force. The international community had strongly criticized the initiative, leading the Interior Ministry to announce it was abandoning the idea, but that it would rename the Support Unit into Gendarmerie. The embassies of the U.S. and Great Britain have asked for an explanation of the move, adding that they are against the introduction of new armed components that have a form of military formations.
Zvizdic, Wigemark attend meeting in Brussels (FTV)
Chairman of the Council of Ministers (CoM) of Bosnia and Herzegovina (B&H) Denis Zvizdic attended a meeting of the EU member states’ Permanent Representatives Committee, formally known as the Coreper II in Brussels on Wednesday. Zvizdic emphasized that the road of the EU integration is the only foreign-policy goal that is unquestionable, as well as the European future of the country. In a statement given over phone, Zvizdic said that he informed attendees of the meeting about the current situation in B&H, reforms implemented so far on the road to the EU integration and the importance of obtaining the status of the EU candidate, as a very significant signal that could be sent to B&H and all its citizens at this moment and which would preserve “the positive EU momentum in B&H”. Head of the EU Delegation to BiH Lars-Gunnar Wigemark also attended the meeting.
“We expected that the European Commission’s (EC) recommendations would acknowledge the amount of reforms that were implemented in B&H so far, especially the progress made in the past four years, and that, in light of that, we would receive positive opinion on our candidate status for the EU membership. That did not happen and even though we are dissatisfied with such outcome we must now review things in a more objective way, use the given recommendations in the best possible way in the upcoming period” said Zvizdic.
Croatia’s Foreign Minister named Council of Europe Secretary-General (HRT)
The newly-elected Secretary-General of the Council of Europe, Croatian Foreign and European Affairs Minister Marija Pejcinovic Buric, said the organization’s role has never been more important and vowed to encourage more dialogue among member states to achieve its main goals – peace and prosperity in Europe. “I believe the Council of Europe is one of the most important European institutions, more important than ever” Pejcinovic Buric said in her first speech addressing the Parliamentary Assembly as the secretary-general-elect. She said the international organization must “encourage dialogue, not only within its main bodies, but among its member states” she said. “During my mandate we will work together to achieve the goals of this organization and they are peace and prosperity for European citizens” Pejcinovic Buric said as she concluded her speech and thanked members for their support. Pejcinovic Buric was elected on Wednesday evening, defeating rival candidate Didier Reynders, the foreign minister of Belgium, 159 votes to 105. She will begin her five-year term on October 15.
PM: Vucic hasn’t read, but comments on Religious Freedom Draft Law (TMN)
Montenegrin Prime Minister Dusko Markovic said that Serbian President Aleksandar Vucic had been making comments on the Religious Freedom Draft Law, which he had not even read. For weeks the draft law has been provoking comments by “Serbian top officials, including the president, while he has not even read the document” Markovic said at the Montenegrin parliament. Meantime, in Belgrade, Vucic said he would not make any comments on the draft law before he received an analysis of the opinion provided by the Venice Commission, an advisory body of the Council of Europe (CoE). In Podgorica, Markovic said he hoped that the Religious Freedom Draft Law would be forwarded to the parliament for adoption by the end of July. He reiterated that the law “has been drafted in compliance with the highest standards and in agreement with the CoE.” “It is a modern law, allowing freedom of religion and the right to the association of individuals based on religion, but within this, and not some other state,” Markovic noted. He further said that the Montenegrin government would endorse recommendations, made by the Venice Commission, which has backed the law in general, to improve the document. The Venice Commission’s main objection referred to the regulation about religious property, stating that religious property must only change ownership after an appropriate administrative or judicial decision. The Religious Freedom Draft Law adopted by the Montenegrin government states that all religious communities, including the Serbian Orthodox Church, have to prove the ownership of church property before 1918, otherwise the property will be seized.
Republic of North Macedonia
Zaev withdraws from the post of finance minister (Nezavisen vesnik)
Prime Minister of North Macedonia Zoran Zaev has withdrawn his proposal to act as finance minister. “The Constitution and the law do actually permit the prime minister to hold the minister post, but given the debates that this issue has sparked, we need to hear the state commission for the prevention of corruption, the opposition and experts on this” Zaev said, adding that this proposal will be withdrawn. However, debates on cabinet reshuffle continue in parliament, where the opposition has accused the government for failing in many areas. The PM has proposed a cabinet reshuffle and major changes in departments.
Berlin will make the “right decision” over the date (Nezavisen vesnik)
German government spokesman Stefan Zibert in a statement for Nezavisen Vesnik said that Germany’s Chancellor Angela Merkel will do everything in her power to make the Bundestag make the “right decision” over the European Commission’s recommendation to start accession negotiations with North Macedonia, but that he cannot specify which week or month of next fall this will happen. The decision of the German parliament was the main obstacle of “technical reasons” due to which EU foreign ministers postponed the decision on the date at their meeting in Luxembourg.
During last week’s Summit of European Leaders, Merkel urged North Macedonia to be patient. “I will do everything in my power to make that positive decision, because North Macedonia has done an exemplary work with the Prespa Agreement, a great job, and we talked about this yesterday. It’s really a matter of weeks, but our commitment stands and as far as I am concerned I will put all my political weight on this” Merkel replied when asked by reporters on the topic.
Borissov: I expect Bulgaria and North Macedonia to maintain good-neighborly relations (Nezavisen vesnik)
I expect Bulgaria and North Macedonia to maintain good-neighborly relations, said Bulgaria’s Prime Minister Boyko Borissov at the Plovdiv Economic Forum on Wednesday.
PM Borissov expressed hope that the coming meeting of the Berlin Process in Poznan will take a decision that North Macedonia and Bulgaria jointly host the next summit.
“We have been at war with all neighbors throughout history and the Balkans has fallen behind as a result. Now we have changed things. I hope all difficulties will be overcome” said PM Borissov. The Plovdiv Economic Forum brings together representatives of governments, businesses and NGOs from numerous European countries, focusing on the challenges related to economic growth and the competitiveness of Bulgaria and Southeast Europe.
Budapest court refuses to extradite Nikola Gruevski (Nezavisen vesnik)
Hungary decided not to extradite former Prime Minister, now fugitive, Nikola Gruevski, according to a Budapest court ruling on Thursday. The court said extradition requirements were not met and refused to fulfill the Ministry of Justice’s request for Gruevski’s extradition to North Macedonia. Earlier today, Hungarian media published courtroom photos and video of Gruevski wearing sunglasses and a baseball hat. Some reports said he had been arrested and taken to court, his hands covered with a jacket and accompanied by two people. Hungarian authorities notified the Ministry of Justice last week they had received the extradition request. Nikola Gruevski, who was convicted to two years in prison in the SPO’s Tank trial, fled to Hungary, where he received asylum. The Public Prosecution indicted Gruevski on allegations that he ordered the violence on April 27, 2017, in Parliament, and the Ministry of Justice sent another extradition request on that account, as well.
President invites Rama and Basha for talks; Rama refuses (ADN)
The Albanian President, Ilir Meta, has officially invited the Prime Minister Edi Rama and the leader of the opposition Lulzim Basha for talks to discuss the political crisis. The head of state sent letters to both Rama and Basha and asked them to join him in an effort to find a solution on the actual situation where the opposition boycotts the Parliament and the elections, while the majority is determined to hold the local elections despite the fact that the President cancelled the elections. Prime Minister, Edi Rama, has officially refused the invitation for dialogue. Rama said that he cannot be part of a round-table or have a meeting with the Head of State or the leader of the opposition because he is in electoral process and he is busy. Meanwhile, the leader of the opposition, Lulzim Basha has accepted the invitation of the President for a meeting. Their meeting will be held today and the main topic of the meeting is the political crisis and how to find ways to solve it.
Mayor Veliaj: Hundreds of OSCE observers in Tirana for the June 30 local elections (Radio Tirana)
The candidate of the Socialist Party for the Mayor of Tirana, Erion Veliaj shed light over the meeting he had with the chief of the mission of OSCE-ODIHR, Audrey Glover, underlining that for the internationals the June 30 local elections are important. Talking for the journalist Lutfi Dervishi in RTSH, he said that despite the debate created by the opposition, the internationals are convicted that the elections will be held on June 30.
“I was informed regarding the process in Tirana and the fact that we have hundreds of international observers in Tirana for the short term and long-term mission, and without a doubt the date 30 for the international community is sacred” said Veliaj. He noted that the meeting was informative, while today are expected to arrive more observers for the short-term mission of the electoral process.
Illumination of Serbia, Hungarian Style (BIRN)
As ties between Belgrade and Budapest flourish, so too do the fortunes of a group of connected companies that have come to dominate the business of Serbian street lighting.
Relations between Serbia and Hungary could hardly be better, flourishing on the basis of what critics say are the shared authoritarian tendencies of Serbian President Aleksandar Vucic and Hungarian Prime Minister Viktor Orban. But behind the politics, business deals are thriving too.
Since 2016, a group of Hungarian, Serbian and Slovenian companies have won public contracts worth more than 25 million euros to refurbish the street lighting in a number of Serbian towns and municipalities where the country’s ruling Progressive Party, SNS, was or still is in power.
An investigation by BIRN and Direkt36 shows that the companies that led the process are connected to businesspeople close to the inner circles of Orban, Vucic and Serbian Prime Minister Ana Brnabic.
The group includes Balint Erdei, a friend and former business partner of Orban’s son-in-law, Istvan Tiborcz, as well as Radovan Đumić, whose company Keep Light is prospering thanks to the public contracts it is winning, Dragoljub Zbiljić and Nenad Kovač, businessmen with links to SNS, and Mark Crandall, a former boss of Brnabic.
The arrangement has echoes of a scheme investigated by the European Union’s anti-corruption arm, OLAF, in which Hungarian public lighting was refurbished by Elios Innovativ, a company once run by Tiborcz and Erdei.
‘No crime took place’
Hungary’s street lighting upgrade, which the EU had planned to help finance, began in the early 2010s. Since then, dozens of Hungarian towns have started to switch to LED lighting, with the rationale that electricity costs would be reduced. The project didn’t live up to expectations, as Direkt36 reported, but this was not the only concern. A lead role in the refurbishment was played by a Hungarian company called ELIOS Innovativ Zrt, established in 2009 and originally run by Istvan Tiborcz – the 33-year-old husband of Orban’s eldest daughter, Rahel – and his friend Balint Erdei.
OLAF investigated 35 projects carried out by the company, and concluded that there had been “serious irregularities” and “conflicts of interests” in all of them, with “mechanisms of organised fraud” in almost half of them.
Hungarian authorities launched an investigation into the ELIOS case, but police said last year that they “had uncovered no crime.” The government, nevertheless, decided against invoicing the EU for funds originally earmarked to support the upgrade. One of the irregularities OLAF uncovered was that the technical requirements and prior experience required under the tender “were often unnecessarily high and/or not related to the subject of the contract”. ELIOS was also often the only bidder, and when it did face competition, those companies often later appeared as subcontractors to ELIOS, raising further questions about the competitiveness of the bidding process.
Tiborcz cut his ties to ELIOS in April 2015 after OLAF began probing the lighting projects, but that did not stop him from debuting this year on a list of the 100 wealthiest Hungarians.
In 32nd place, Tiborcz is the youngest, with a fortune estimated at 35 billion forints (108 million euros).
Before Tiborcz and ELIOS parted ways, the company opened a Serbian branch in December 2014, a matter of months after Orban and Vucic, then Serbian prime minister, held their first joint government session.
BIRN/Direkt36 asked both Vucic and Orban whether their warm political relationship had helped smooth cooperation between companies close to them and their political parties.
Vucic’s press chief replied that the president “does not decide on tenders, does not deal with lighting. There are legal procedures that need to be followed during the tender so if there are any suspicions about that, I ask that you address the questions to the institution that issued the tender call.”
Orban’s cabinet responded that “the Prime Minister does not deal with business issues.”
Soon after Hungarian ELIOS established ELIOS SRB, Tiborcz left the company, followed by Erdei seven months later. However, in February 2016, ELIOS SRB was taken over by another of Erdei’s companies – Woody Holding, later renamed to Redwood Holding. Besides ELIOS SRB, an array of businesses was established in Serbia to channel the public funds being spent on the lighting projects.
The BIRN/Direkt36 investigation found close links between the original ELIOS and four other companies – ELIOS SRB, ESCO ELIOS, ENEF-Energetska Efikasnost, and U Light, a Serbian branch of the Hungarian company of the same name.
Almost every Public-Private Partnership street lighting tender in Serbian towns since 2016 has been won by one of these companies, starting with Ada, a town in the north of Vojvodina. There, a consortium created to bid for the contract in July 2016 included ELIOS SRB, Hungarian U Light Kft, ENEF Energetska efikasnost, a private company called Energoinvest 023 and a 100 percent state-owned company, Odrzavanje i usluge. A second bidder was rejected.
Odrzavanje i usluge declined to answer how, as a state-owned firm, it came to cooperate with the group of companies linked to Elios Inovativ and people whose businesses were under OLAF investigation.
Arpad Kosh, who was in charge of the LED project in the Ada municipality, told BIRN/Direkt36: “Serbian and Hungarian companies appeared as a group in the tender in Ada. As a new company, ELIOS SRB could not have its own experience, so a Hungarian company submitted its experience from Hungary.”
Ruling party connection
Following Ada, these companies signed a string of contracts backed by Serbian companies close to the ruling SNS and, in the case of one company, with a connection to Brnabic. They were Energotehnika Juzna Backa, Resalta, Keep Light, Elektromontaza Kraljevo and Somborelektro.
Energotehnika – Juzna Backa is owned by Maneks, a company of Dragoljub Zbiljic, who was the guarantor of a bank loan SNS took for its election campaign in 2012. Zbiljic has been investigated for business related crimes in the cities of Novi Sad and Kragujevac. The Novi Sad prosecutor dropped the case, while Zbiljic remains on trial in Kragujevac.
The Slovenian company Resalta, previously called GGE Družba za izvajanje energetskih storitev, is co-owned by PostScriptum, an investment fund of American businessman Mark Crandall.
Brnabic was a director at Crandall’s company Continental Wind Serbia until she became minister of public administration and local government in August 2016 and then, in June 2017, prime minister. Six weeks after she took office as PM, companies now linked to her previous boss won a PPP contract along with companies owned by Hungarian partners in the eastern Serbian town of Petrovac na Mlavi. Resalta won three more contracts and will be in charge of another two, previously won by ENEF Energetska efikasnost, which Resalta took over in late 2016.
Asked about Resalta’s involvement and her connection to Crandall, Brnabic told BIRN/Direkt36 she knew nothing about the tenders: “This is the first time I’m hearing about this, and that has nothing to do with me,” Brnabic said. “I cannot tell local governments what to do and how to do it, I don’t have that kind of power, so I cannot speak about specific cases. The only thing is, I think it’s good that local governments are considering energy efficiency. That’s what’s positive. I have worked with Mark Crandall and that’s no secret […] I really don’t understand, does that mean that Mark Crandall cannot work in Serbia anymore?”
Crandall, likewise, told BIRN/Direkt36 he had no knowledge of Resalta’s work in LED lighting:
“My only involvement in the LED lighting market is very indirect, through the shareholding that Postscriptum Ventures SARL has in the Slovenian company called Resalta (originally called GGE),” he said. “I am not even a member of the Board at Resalta although Postscriptum has nominated one member of the Board. PostScriptum does not own much of Resalta – something like 17 percent or thereabouts. And on the subject of LED lights I know absolutely nothing about what Resalta does, really nothing.”
Keep Light joined the group in September 2017. Keep Light shot to notoriety last winter when it sold an 18-metre plastic Christmas tree to the SNS-run City of Belgrade for 83,000 euros. Vucic justified the outlay.
Elektromontaza Kraljevo, that partnered with Somborelektro and ELIOS SRB in Bor, is fully owned by Nenad Kovac, a business partner of Nikola Petrovic, the former director of the Serbian Electric Power Company and one of Vucic’s closest friends. In a written answer, Elektromontaza said they won the contract because they “offered the best price in a lawful, transparent procedure.” “But, you’ll continue to believe whatever you believe in, while we’ll continue to do what we do” they added.
Somborelektro, meanwhile, according to its financial reports, loaned around 577,000 euros in 2017 to Prointer IT, a SNS-linked business that, as BIRN previously reported, provided SNS with the infrastructure for election campaign phone calls to voters. Somborelektro didn’t respond to BIRN/Direkt36 questions.
In a written response, Mayor’s office of the city of Bor said: “service providers were selected in an open public procurement procedure and there was no political influence.”
Questionable tenders specifications
Most of the Serbian towns and municipalities concerned did not respond to BIRN/Direkt36 questions about whether private partners for their lighting projects were chosen because of their political connections.
Boban Miličić, who runs Lapovo municipality, said in a written response: “No one had any influence over the choice of firms, nor did anyone contact me regarding this. The public procurement was carried out according to the law” “I was not informed about the ELIOS investigation in Hungary,” he said.
Similar to the Hungarian projects criticised by OLAF, the Serbian tender conditions were very narrow, attracting little competition. Tenders either did not have any other bidders, or the competition was rejected for formal reasons. Project requirements in some cases insisted on a multi-million euro annual income or several years of experience in a type of contract that is new to Serbia.
In Krusevac, for example, a tender for the replacement of 12,545 bulbs required applicants to have changed double that number in the previous three years.
“It is difficult to say that in a certain case what conditions are considered as ‘too narrow’, but it certainly seems excessive to ask for a reference which is double the amount of the planned investment,” said Gabriella Nagy, head of Public Funds Programs of Transparency International Hungary, which has closely followed ELIOS operations in Hungary.
The press office of the City of Krusevac told BIRN/Direkt36 that the law on public procurement allows for tenders to stipulate a requirement of double the amount of the planned investment.
“As we were among the first cities which started reconstruction of public lighting in this way, the requirement of experience of changing double the number of bulbs was one part of the evidence of the seriousness of the offer,” the press office said by email.
Zoran Stipanovic, a private contractor hired as a consultant and who wrote the tender requirements for Krusevac and for a number of other LED lighting tenders in Serbia, said the documents were written according to European standards and the information supplied by the municipalities “Krusevac was one big and serious project that cost more than 5 million euros, so it was important that the private partner knows how to do it – to replace and maintain more than 12,000 lights,” Stipanovic explained. “I don’t have any contact with the private partners because that wouldn’t be professional as I am engaged by the local side,” he said, and denied having any political connections.
Given that in Serbia 80 per cent of PPP projects in public lighting were won by the same group of companies, in several cases without any other bidders, Nagy said “it indicates a distorted competition if only 1 or 2 companies bid for the tender, and it can be supposed that it is due to the overly strict tender requirements.” Nagy cautioned it was difficult to say to what extent the Serbian tenders mirrored the problematic Hungarian tenders, but that, “with regards to the lack of competition and the strict tender requirements, they are similar.”