Construction works on Corridor 5C near Tešanj and Žepče could be halted, Klix.ba has learned from three independent sources. The reason is that the Government of the Federation of Bosnia and Herzegovina is unwilling to appoint new leadership at Motorways of the Federation of Bosnia and Herzegovina, while European creditors do not want to continue projects that are under certain types of investigation.
In short, the situation surrounding the potential suspension of highway construction in Bosnia and Herzegovina, at least in the section near Tešanj and Žepče, can be explained by financial disputes. The investor, Motorways of the Federation of Bosnia and Herzegovina, reportedly owes hundreds of millions of BAM to contractors and subcontractors.
The investor reportedly owes money to companies such as Cengiz, Euroasfalt, and numerous others, while the future of financing and the payment of tranches from European creditors ,the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), is uncertain and may even be terminated, depending on the actions of the authorities in Bosnia and Herzegovina.
The policies of creditors such as the EBRD and EIB are well known to those who have worked with them. While they respect the presumption of innocence, they do not wish to be part of projects that are considered suspicious or that are under investigation by judicial authorities.
A similar situation currently surrounds the public company Motorways of the Federation of Bosnia and Herzegovina, which has reportedly attracted the attention of European judicial bodies.
According to available information, the Government of the Federation of Bosnia and Herzegovina received clear instructions that a change in the leadership of Motorways of the Federation of Bosnia and Herzegovina, starting with Director Denis Lasić (HDZ), is necessary if European creditors are to continue financing projects of importance for the citizens of Bosnia and Herzegovina.
However, the Government of the Federation has not discussed this issue, while Motorways of the Federation of Bosnia and Herzegovina informed the public in December that everything was in order and that the media were spreading misinformation, although the problem does exist.
Since the leadership change has not taken place, something that should have been done by the Government of the Federation, the delivery of loan tranches has reportedly been suspended. This indicates that maintaining political positions and coalition partnerships may currently be more important to the authorities than the development of the country.
On the other hand, contractors are not concerned with political issues, and the situation has already reached a critical stage. It is therefore highly likely that within the next ten days works on Corridor 5C on sections financed by the EBRD and EIB could be completely suspended.
Possible Solutions
One option is for the Government of the Federation of Bosnia and Herzegovina to seek new creditors and incur additional debt in order to retain the current leadership. Another possibility is to comply with the creditors’ requests and continue using the funds that have already been secured and are ready for project implementation.
Given the new borrowing announced in recent days, the question arises whether it is justified for citizens to bear an additional financial burden simply to extend someone’s mandate for a few more months.
A third option, though difficult to achieve, would be negotiations and attempts to persuade European creditors to soften their position. However, past practice has been clear: wherever there is an affair, investigation, or legal process, European creditors tend to withdraw until the necessary changes are made.
It also remains unclear whether, and in what amount, the Federation of Bosnia and Herzegovina might have to pay potential penalties to the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), which are financing highway sections in the north of the Zenica-Doboj Canton.
