In an interview with Federal Television (FTV), Federal Minister of Energy, Mining, and Industry, Vedran Lakić, said that the Government of the Federation of Bosnia and Herzegovina won’t give up on saving Željezara Zenica, and that he expects a positive decision by the Cantonal Court after an appeal is issued. He spoke about the state in Elektroprivreda BiH (the Power Utility Company of Bosnia and Herzegovina), the recovery of the mining sector and plans for the energy system reform.
Speaking about the decision of the Municipality Court, which rejected the proposal by the Government of the Federation of Bosnia and Herzegovina, Lakić said that all legal means at hand will be used.
“We won’t give up on Željezara Zenica. The legal remedy available to us at the moment is the appeal against the first-instance ruling. We did that, we delivered it promptly, and now we are expecting the court’s new ruling. I believe that in this new decision-making process, the Government’s proposal will be accepted.”
The Government Wants to Take over Željezara
Commenting on the management’s proposal for the Government to lease Željezara for 0 BAM with the obligation to restart the integrated production, Lakić said that the Government stands by its previously defined position.
“To observe only one part of the Željezara Zenica complex compared to its complete capacity and revenue opportunities that can be realized, I think at the moment this is unacceptable.”
He emphasized the goal is a full takeover of the company.
“The Government of the Federation has previously expressed its wants – a complete takeover of the entire Željezara in Zenica and taking care of the company and the complete industrial chain in the Federation of Bosnia and Herzegovina.”
Bankruptcy Would Jeopardize Thousands of Jobs
When asked about the implications of a possible bankruptcy, Lakić warns that it would leave far-reaching consequences.
“It will be a big blow to the complete economy in Bosnia and Herzegovina. Upon the announcement of the bankruptcy, all workers will be automatically laid off and go on unemployment. A total of 10,000 families will have no income, and there will be a disturbance in functioning in over 10,000 families. It includes dozens of suppliers, their buyers in and out of Bosnia and Herzegovina, and the railways of both entities relying on Željezara Zenica. It is the heart of the industry, which should experience no other scenario than true recovery and modernization.”
Speaking about the role of the majority owner, Pavgord, Lakić said that communication exists despite differing stances.
“I am in communication with Mr. Pavlović because I believe that, regardless of moves each party makes, the talks and continuity of conversation must remain present. I will not allow for that communication channel to be broken down.”
Elektroprivreda Is Not in a Satisfactory State.
Reflecting on the state in Elektroprivreda BiH, Lakić admitted that problems exist, but he believes it is about inherited difficulties.
“I can’t say that the situation in Elektroprivreda BiH is satisfactory. It has been on a downward trend for about a decade, especially regarding investment. We are struggling with a difficult legacy.”
According to him, the key issue is the decline in coal production.
“Elektroprivreda of Bosnia and Herzegovina is directly tied to the amount of coal that is mined in our mines and the processing of that coal in thermal power plants. That process has not been looked after well for the previous 10 or 15 years, and we are in a situation where we don’t have enough coal.”
Closing of Zenica Mine part of Decarbonization Process
Speaking about the Zenica Mine, Lakić said that the decision to close it was unanimous.
“The Government of the Federation, Ministry, Elektroprivreda, Zenica Mine, and union representatives jointly agreed that Zenica Mine should be closed. It was evident from the documents from 2009 that the mine has no perspective.”
He emphasized that significant means were secured for that process.
“We secured 160 million BAM to provide for the miners of the Zenica Mine, but also to build two photovoltaic power plants in the Kreka and Banovići mines. This project is a few days away from the beginning of implementation, and I believe it will show we are moving towards recuperation of the energy sector.”
The New Model of Mining Sector Is Required
When asked about the justification for establishing the Elektroprivreda BiH Concern, Lakić believes that the idea was not problematic, but the way in which it was conducted was.
Maybe the idea of the Concern was good, but the form of the created concern was not. You see what has happened since its formation to today, how much debt has accumulated for salaries and contributions.”
He announced that the Ministry is preparing a new functioning model.
“We are analyzing new models that will soon be presented to the public, because this system, the way it is, is not sustainable. We won’t give up on changes, and we will include unions, mine management, Elektroprivreda, the Ministry, the Government of the Federation, and, if needed, the Parliament of the Federation of Bosnia and Herzegovina.”
Southern Interconnection Is the Consequence of Years without Investment
Speaking about the Southern Interconnection project, Lakić said that the Federation of Bosnia and Herzegovina also needs to recover its mining sector and develop new gas infrastructure, which, as he said, is a consequence of years without investment.
“Fifteen years of lack of work in this sector led to things having to be turned upside down so that the system would not collapse completely. The Southern Interconnection is the best indicator of that.”
He recalled that for years there were talks about gradually phasing out coal, but that at the same time the alternative energy direction was not developed.
“If coal was slowly ceasing to be fuel for the energy system, why was another part of the energy chain not developed in the Federation of Bosnia and Herzegovina – namely gas? I can’t accept that the authorities that led this system did not develop a new energy source.”
He emphasized that both coal production and gas infrastructure development must increase.
“We must return coal production to save the energy system, while at the same time developing the gas infrastructure, which should inherit the current energy mix and ensure energy sources, heating and everything necessary to the citizens.”
The Contract for the Southern Interconnection is in the Final Stage
Speaking about further steps, he said the focus is on the contract with the investor.
“We are in the period when we must finalize the contract with the investor who is named in the law. That contract has over a hundred articles, and both teams worked on it. We are currently in a final stage.”
He said he wanted to avoid mistakes that could have long-term consequences.
“We cannot bring ourselves to a situation where an agreement that is concluded for thirty or more years is done so that it leaves something that is not good for future generations. That is why we are taking into account every letter, every comma, and every word. The contract is in its final stage, and we will probably sign it soon, but we want to leave a mature and sustainable contract which will enable a new pipeline and diversification of gas supply.”
Energy System Is Stable, but not Sustainable in the Long Term.
When asked about the energy stability of Bosnia and Herzegovina under current circumstances, Lakić said that the situation is under control, but that the existing model is not a solution for the future.
“When it comes to the energy sector, we keep the stability under control. We don’t have situations in which we lack electrical energy or disturbance in supply. I think we are currently stable.”
Yet, he warned that the system must be changed.
“This is not a model that should last for a couple of years. We have to take it to the next level and strategically move towards the construction of the new energy system for the Federation of Bosnia and Herzegovina.”
Federation Gets Energy Strategy for the First Time
It was unacceptable to Lukić that the Federation of Bosnia and Herzegovina hasn’t had an energy strategy so far.
“Imagine the information that the Federation of Bosnia and Herzegovina did not have an energy strategy. It tells me that we were on the way, which had no frameworks or direction.”
He announced that the Ministry finalized the development of the document.
“The Ministry is in the phase of drafting the energy strategy of the Federation of Bosnia and Herzegovina, which we will offer soon. It is impossible that one of the most important sectors in the Federation has no strategy. We want to leave behind a document based on which the future generations will develop the energy sector.”
Focus on Energy and the Defense Industry by the End of the Term
Speaking about his plans until the end of the term, Lakić said the strengthening of the energy and industry sector will remain a priority.
“We need to start their recovery at the terminals in Živinice, to be close to completing the terminal in Bihać, and, when it comes to the mining sector, to increase the production level.”
He announced the expansion of the defense industry.
“It was important for us to open a defense industry in two cantons – Tuzla and Una-Sana, to start producing two or maybe three new products that have not been produced so far in our companies.”
