CIN publishes documents on unrealised investments in Republika Srpska

The Centre for Investigative Reporting (CIN) has presented in Banja Luka a map and the findings of its investigation into 20 energy investment projects in Republika Srpska (RS), worth at least BAM 10.6 billion. It also presented its documentary The Deal, which traces the decisions and actions of the authorities that led to the failure of major strategic projects in the entity.

The conference also saw the release of key documents underpinning the investigation.

‘For two decades, presidents, prime ministers and ministers in Republika Srpska negotiated and signed agreements with Russian partners, building their election campaigns around these supposed successes. In reality, however, investors took control of the oil sector and natural resources of Republika Srpska while delivering almost none of what had been agreed on paper,’ said CIN journalist Renata Radić-Dragić.

In their investigative reports, Radić-Dragić and Milena Mitrović examined how the investment deals championed by the Republika Srpska authorities fell through, despite the fact that officials still take pride in them while avoiding discussion of what went wrong.

‘To get any answers, we had to intercept officials at party celebrations and election rallies, and even then, the responses did not do justice either to the issues at stake or to the positions they held. Unfortunately, it does not appear that they consider this important for Republika Srpska, because if they did, they would have to explain to the public what happened and how it came about,’ said Mitrović.

An Expensive Bet on Comsar’s Future Business

The Government of Republika Srpska (RS) bought Comsar Energy RS for BAM 240.5 million, with much of the purchase price paid before the contract was signed and before the funds had been secured in the budget. The price was based on an optimistic forecast of the future performance of energy facilities that have yet to be built.

Five Strategic Investments Worth Billions in Republika Srpska Remain on the Drawing Board

Through concessions, direct investment and privatisation, the Republika Srpska government has struck deals worth BAM 2.3 billion across five energy and infrastructure projects. Yet over more than two decades, BAM 408.5 million has been invested, while most of the projects have never got off the ground.

Millions Committed to Non-Existent Hydropower Projects

It has been two decades since the Government of Republika Srpska granted concessions for the construction and operation of hydropower plants on the Bistrica and Janjina rivers. The plants have still not been built, around 125 million BAM of public funds have been spent, and a further 146 million BAM borrowed. Meanwhile, private investors have pocketed substantial profits by selling stakes in the concession company.

From opaque contracts and unfulfilled commitments on investment, employment, debt repayment, and the launch and continuation of production, the documentary The Deal traces how Milorad Dodik, then Prime Minister of Republika Srpska, brought Russian investors into the entity, negotiated with them over strategic sectors of its economy, and how those major deals ultimately turned out.

Through the privatisation of Republika Srpska’s oil industry and the implementation of energy concessions involving Rašid Sardarov, who was presented to the public as a Russian businessman, the film examines the development of the purported strategic partnership between Republika Srpska and Russia.

The deals were presented as agreements that would contribute to the development of Bosnia and Herzegovina as a whole, bringing in revenue for the budget, creating jobs, developing the oil industry, and generating electricity. None of that happened.

Two decades later, the oil refinery in Brod and the oil-products refinery in Modriča have accumulated losses of more than BAM 1 billion, while Sardarov, instead of investing the promised BAM 1 billion, left with more than BAM 300 million in public money.

The documentary examines how money was paid out before contracts had been signed or funds secured in the budget, how agreements were amended in the Russian businessman’s favour, and how losses were incurred by the public company Rudnik i termoelektrana Ugljevik (RiTE Ugljevik).

‘The investments that had been announced never materialised: there was no oil extraction, no hydroelectric or thermal power plants were built, and no airport was constructed. What did happen, however, was that a Russian private businessman walked away with millions of marks belonging to the people of Republika Srpska,’ said CIN journalist Milena Mitrović.

In addition to its investigative reports, CIN has published a map of unrealised investments containing brief project descriptions, details of the signatories and contract values, as well as selected documents on which the investigative reports, documentary and map are based. The documentation includes agreements transferring shares in companies owned by Rašid Sardarov, as well as concession agreements and amendments relating to the investments.