Concerns and questions regarding “Belgrade waterfront”
Transparency – Serbia (official chapter of Transparency International) emphasizes that deadline for beginning of construction of „Belgrade Waterfront“ is delayed again the same as it was announced - through politicians statements, the latest by Mayor (goo.gl/TfASGY ). Announcements of new deadlines weren't corroborated by any elaboration of why previous promises weren't fulfilled, for example, why Prime minister’s promise wasn't fulfilled (goo.gl/A6f4WD ) and for what reason announced contract with the investor from UAE on public private partnership, hasn't been signed yet. As a matter a fact, besides numerous information published about this project, there isn't a single one that would point out to signing of any contract. Sole exception, according to city officials, is the contract on donation for renovation of former „Geozavod” building[1], whose location is in “Belgrade Waterfront” parcel.
TS thinks that citizens of Belgrade and others should be familiar with when the construction will begin, but it is even more important to know under what conditions will it occur and what investments and business risks will be taken over by the State. Having in mind numerous promotions and „moving of deadlines“ through announcements, public has the right to know where the problem lies in the case of „Belgrade Waterfront“ - whether it is in unresolved property-legal relations and making of preparatory works on clearing up of location or there are controversial questions in negotiations with announced investor as well.
Although common practice is that negotiations with potential investor do not occur before the public, many data should have been known so far. When public – private partnerships are being contracted in compliance with Public Private Partnership and Concessions Law, sealing of such business should have been preceded by making of analysis that would justify precisely such, and not some other model of project realization, approval by the Commission for PPP, and which is especially significant, bidding of potential business partners with the state. Since in „Belgrade Waterfront“ case, that scenario most likely won't occur, the chance to reach economically most appropriate bid, through bidding in an open tender procedure, with defined conditions and criteria, will be missing. Risk of neglecting economic calculation only emphasizes the political significance of this project[2].
Besides, economic risks can be manifested in various modes during contract execution, depending on the contractual obligations, for example, through taking over of financial obligations of the investor in the case that selling business and residential space is below expected or through taking over of obligations for investments from the budget that wouldn't otherwise occur, for helping this project etc. Since analysis of profitability of this business model weren't made, nor were they subjected to verification of the Commission for Public Private Partnership, it is important to inform the public when the contract will be signed, whether there are controversial questions in negotiations and what are the risks and expenses that state will take over in this case.
Transparency – Serbia
Belgrade, 5.3.2014.
[1] City officials haven’t delivered that document as well (http://goo.gl/LEVprk).
[2] There are clar indications that in previous period due to implementation of this project regultions were already violated and TS went public on that (http://goo.gl/LQMbbz).
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