Jump Off the Bridge

The president of FR Yugoslavia, Slobodan Milosevic, at the opening ceremony of the new railway bridge over the Danube River at "European traffic corridor number 10" (May 29), dedicated not only the larger part of his speech to Europe, but also announced towards the end of his visit to Novi Sad that the roads which lead from Serbia to Europe are to be enlarged, i.e. the other lane of the Belgrade - Novi Sad highway is to be speedily constructed.

Therefore, Milosevic has not only proclaimed FRY as the "most European of all European countries", he also added that "in the year 2000 Europe should be proud of Serbia's reconstruction", and should be ashamed of its destruction in 1999. He also energetically stressed that "Europe can be found on every inch of the European continent".

The real meaning of these pro-European strategic thoughts was presented by Milosevic himself later, at the end of his talks with local politicians and businessmen of the province held in the auditorium of the Assembly of Vojvodina, where he presented "a totally new project which will commence in the next few days", which is "the construction of the Belgrade - Novi Sad highway", which "should be completed in less than two years, including the revitalization of the existing lane", after which construction activities would move on north to Subotica, "simply so that this traffic spine of the Balkans, and I would add of Europe, too, which all main directions intersect" will be launched and "will become a significant impulse and one more strategic investment for the dynamic pace of our future development".

Incorporating the commencement of the works on the Belgrade - Novi Sad highway into the finale of his speech presented to the businessmen, Slobodan Milosevic asserted what others had been guessing all along - that he personally had ordered an accelerated pace of inviting tenders "for the construction, utilization and maintenance of a part of the E-75 highway from Novi Sad to Belgrade" (the duration of the concession is to be six years, the deadline for the completion of all works two years), which appeared on May 13 in Politika daily, signed by the Agency for Investing into Activities of Interest to the Republic of Serbia. On this amazingly speedy tender where applications were to be submitted in 14 days at the latest, and as was subsequently reported "prior to the deadline" (May 27), two tenders were submitted, complete with all necessary documentation - by the NBC group and by the RAST Consortium - and the final outcome shall probably be published in the next few days. All leads towards the conclusion that this entire business deal might have been pre-determined in Milosevic's cabinet prior to the tenders - which is why we should look more closely at his new construction offensive, which has speedily "crushed" all the usually employed technical, economic and legal frameworks and treat it as more than an evident launch of an election campaign.

If we start at the very beginning, we should first note that the tender for the concession on the Belgrade - Novi Sad highway was published even though that very same Agency never made public who was granted the tender for the construction, utilization and maintenance of the Nis - Presevo highway (141,64 km), which was opened last year (Feb. 22). Three tenders were submitted then: by a Consortium which was made up of the Austrian firm Ilbau, the Italian Inpredjilo company, the Swedish NCC and Belgrade's Energoprojekt, followed by the NGB Company (which seems to have been founded by NIS Jugopetrol, the Pricker Foundation and the French Buig company) and the Greek Atikat company. Nothing was stated on the contents of these tenders, although mentions were made that the foreigners were offering 400 million dollars in investments (that sum might have included costs of constructing or adding on new parts of the highway and the reimbursement to the government of Serbia in name of the granted concession - however it's difficult to even surmise on this). Even though it was stressed at the ceremony when the aforementioned tenders were opened (Dec. 2, 1999) that the Commission of the government of Serbia would publicly announce its decision in the time period of 90 days, up to now, almost 180 days since, the public was informed of nothing. The propaganda-political effect which stressed international interest in investing in Serbia despite the international ban on investments (the EU and the US had adopted that ban on May 1988) was kept alive for a few days after which all was surrendered to subsequent oblivion.

Actually, instead of informing the public of that previous tender, they called a new one on that very same E-75 highway but this time on its northern part which is 66,44 kilometers long (the part from the Batajnicka intersection to the Temerinska crossroads near Novi Sad - without constructing the parallel bridge near Beska on the Danube).What are the differences and similarities between these two concessions?

As Aleksandar Tasic has already noticed (Danas daily of May 25), in this
new tender, unlike the old one, it isn't known whether the government of Serbia had previously adopted and published the concession act as it is obliged to by law. Further, the federal enactment wasn't observed by which the time period for applying for the tender cannot be shorter than 45 days. It isn't explicitly stated that foreigners can apply either while the tender has to be stated in DEM. As Tasic notes, it is unusual that the concession can be transferred to another entity along with all its rights and obligations, and it is also interesting to note that the company which shall be granted the concession shall immediately acquire the right to charge toll on the already existing highway lane. Aleksandar Tasic's main conclusion is that the "enormous wish of the ruling coalition in Serbia to present itself in the best light as construction and modernization organizer is not large enough to cover the deficiencies of this deal, the justified fear of its legality and the real intentions of the tenderers". He simply pointed out his doubt that the concessionaire in this tender has been pre-chosen. However, there isn't any significant difference with last year's tender in that respect - since, as word in expert circles had it, the concessionaire was predetermined then too but he apparently didn't manage to find a way out of the Greek legislation, i.e. it was impossible to bypass the European ban on investments in Serbia.

At first glance there is another connection between the south and north tender - the participation of the NBG company, whose director Tihomir Trivunac in a letter to the Agency listed the very same remarks with regards to the tender as Tasic. In a remark to Privredni Pregled, Mr. Trivunac specially stressed the short time period for preparing an incredibly bulky file for that tender which caused his company great difficulty, even though that company, as he says, is extremely well equipped. The company, according to the statement of its director, was founded in 1995 and since then has been negotiating with the government of Serbia on the construction of highways, with a suggestion of "squeezing in" a trans-European road through Serbia. Trivunac also lamented that his company wasn't allowed to inspect the main plan ("we only received plans for 1.5 kilometers of the highway", he says) without which it is practically impossible to submit a precise tender.

The complaints listed by Mr. Tihomir Trivunac lead us to believe that he is not overly optimistic with regards to the competition of the RAST Consortium, which, as stated by the Agency, also managed to submit a tender which met all the requirements. An interesting group is found behind this name: the Ivan Milutinovic company, Borovica Transport and Beogradska Bank. It is a well known fact that PIM knows how to construct highways (having especially proven itself during the latest work on the Belgrade - Pancevo highway). Maybe Borovica-Transport (if Mr. Borovica from Ruma is still backing it) has enough trucks for transporting the necessary material for the construction of the highway (he was given a special license for importing trucks with beneficial customs duty for works on the part of the Feketic - Subotica highway). However, one question remains -  how does Beogradska Bank contribute to this deal.

There are many other questions which cannot be easily answered at this moment. The first question is how much does the construction and reconstruction of the Belgrade - Novi Sad highway really cost. Some say that, taking the flat terrain and partially existing highway into account, the construction of one kilometer could be estimated at three to five million dollars. Even though flat terrain doesn't overly reduce the price of construction and despite a necessary solid asphalt layer, this evaluation seems overpriced. Which is why the direct investment costs must be set at somewhere between 250 and 150 million dollars. If we add around five percent annual interest rates to that (if the investor managed to negotiate favorable credit rates from somewhere) then costs rise to between 200 and over 300 million dollars - not counting the concessionary reimbursement to the government of Serbia.

That amount of money probably cannot be compensated by the concessionaire, not to mention the impossibility of acquiring any profit during the six year duration of the concession, since even at the best of times Serbia had a profit of around 100 million dollars from the roads on its territory, while the profit expressed in dinars varied from one "price policy" to the next. The question today is whether the concessionaires count on even a quarter of these earnings, since the number of foreign vehicles passing through Serbia are minimal (from over 30.000 per day it has fallen to over 3000 daily), while the majority of the domestic trucks are already using alternative roads in order to bypass the relatively cheap dinar tolls (whose price, true, has been raised three times a couple of weeks ago).

Despite all this, we still have two tenders. Maybe some highways can be hastily constructed for less than 100 million dollars, the toll could possibly be raised again, maybe a lot of imported gas could be sold along the roads at a free price (Borovica is already the owner of a couple of gas stations), maybe someone offered to buy off the concession in case the international environment suddenly lightens up, maybe this concession is only a cover up for another favorable foreign debt intended for some other needs, maybe it is important for Milosevic to do something, regardless of what, and he might possibly have strong arguments why those who have submitted tenders should commence work, raise credits etc. In case foreign funds have truly been raised for this highway, the deal cannot be contested from the economic point of view. If it is to be constructed from the meager domestic funds and in name of pre-election conjunctions, then this deal equals an economic suicide.

THE BOSKO PEROSEVIC BRIDGE:
The opening ceremony of the temporary railroad-road bridge in Novi Sad was nicely presented on TV but "on the spot itself" it seemed somewhat cheap and tepid (when a person reads the report filed by Reuters on Milosevic's triumph in the "opposition stronghold" - one almost believes that one wasn't present on the occasion). First of all, by the assessment of VREME's reporter, only around 10.000 rallied of which less than half were from Novi Sad. Maybe more people were present, but this reporter didn't receive his accreditation in Belgrade for the opening ceremony in Novi Sad and therefore viewed the spectacle from the public. Anyway, shouts and cheers were heard in the front rows only, the others stood in the midst of that humid day somewhat tired looking, in utter silence.

The president arrived in the "gray train" (according to the president's speech - a technical miracle) instead of the blue one and this time he didn't have any colorful remarks on the opposition. The legally elected local government of Novi Sad was ignored since President Milosevic is no longer even trying to present himself as the president of all the citizens (or does he possibly believe that "traitors" aren't citizens of this country).

The most delicate issue open for comment is the name of this bridge. Why haven't Pavle Bulatovic, Radovan Stojcic or Zoran Todorovic Kundak received their streets, important memorial centers, prizes, charters (true, certain Beopetrol employees, with a dry sense of humor, have dubbed the passage where their director was murdered "Kundak's lane")? Those who believe that this isn't a case of political bad taste say - Milosevic could have allowed this temporary bridge to bear his name, just like Broz used to do in his time. That might have something to do with the modesty of the man who invited the entire world to fight against colonialism and who, in his pro-European speech, called upon "historically important and now fatigued Europe" to learn its lessons from Serbia (never mentioning Greater Serbia).