A Dry Hole Soaking Up Sarajevans’ Money

The former manager of the “Otoka Olympic Swimming Pool” wasted tens of thousands of BAM of the Sarajevo taxpayers’ money on the search for water that was not found. During his term of office, he also collected about BAM 20,000 in fees to which he was not entitled.

When the former director of the “Otoka Olympic Swimming Pool” in Sarajevo, Enes Peštek, decided in 2018 to look for a source of life within the company, it seemed like a great idea – the pool would have the water it needed for its operation and the company would save up to BAM 19,000 on monthly bills.

This is why the City of Sarajevo and Sarajevo Canton gave money for this project. Peštek immediately embarked on a search, and the money was spent, but no water was found. CIN journalists discovered that he did not follow the rules in the process.

The private companies were drilling without valid permits. Peštek awarded contracts for works to them directly, breaking down the procurement into multiple contracts of lower value. As a result, companies registered for geology work did not get the job opportunity. Thus, a total of BAM 54,400 were wasted on the project.

The same year, Peštek’s closest colleagues from the company and the Supervisory Board awarded him for his exceptional work results. He received a bonus in the form of incentives and salary adds-on – mostly based on unlawful decisions – and was given BAM 20,000 for medical treatment.

In September 2021, he was dismissed from the position of director – before the end of his term –  because the Sarajevo City Council did not approve his annual work report. The current management of the company suspended the water supply project due to a lack of justification.

Peštek refused to talk to journalists on the record.

After being dismissed from the position of director of the “Otoka Olympic Swimming Pool”, Enes Peštek now works as the head of the Company’s Physical Protection and Security Service (Photo: CIN)

Direct contracts
The public company “Otoka Olympic Swimming Pool” is the only Olympic swimming pool in the Federation of Bosnia and Herzegovina (FBiH), and in addition to recreational swimming, it offers swimming and diving courses. The pool also meets international standards for swimming competitions.

Sarajevo City annually allocates up to BAM 1.5 million from the budget for the operation of the Olympic swimming pool. The company itself earns about a million BAM.  It operates with an average annual profit of about BAM 17 thousand. The company spends most of its money on salaries and other benefits for 44 employees. Funds are rarely found for projects that would enrich services or improve work. However, the opportunity presented itself in 2018.

At that time, the director of the company was Enes Peštek, MA in sports management. Before that, he was a councilor of the Stranka demokratske akcije (SDA) [Democratic Action Party] in the Sarajevo City Council. Shortly after taking the office, he revived the old idea of an independent water supply for the swimming pool, which currently spends up to 19 thousand BAM a month for about five million liters of water.

The Sarajevo Canton and the City of Sarajevo allocated BAM 140,000 for finding water. This money was supposed to be used for a geological survey project, drilling, and other works described in the project design.

The company did not announce a public tender for these works, but instead, the director arranged the works directly.

According to the BiH Public Procurement Agency, a decision on the way of procurement is made based on the estimated cost of procurement. If the deals are agreed based on a direct agreement, their value must not exceed BAM 6,000 annually.

In nine months, Peštek signed nine direct agreements, four of which for design and study, and all of which were nearly identical in terms of content.

Most contracts were awarded to InfraPlan from Sarajevo, a company that was not registered for geology works, and thus was ineligible to work on the project.

To win the deal, InfraPlan entered into a consortium with the company GeoAVAS, one of the 17 companies registered in Sarajevo to perform works of this kind. The Ministry says that the problem could be solved that way, however, InfraPlan could not be the project lead, which in this case it was.

“I work on so many projects and no one has ever said that I could not do it”, said the director of InfraPlan, Zlatan Talić, claiming that he did everything as per the regulations.

In four months of 2018, this company signed four direct contracts worth BAM 26,676 with Peštek for the design, study, and procurement of pipes.

At the same time, Peštek signed three more contracts worth BAM 20 thousand for drilling, and this time he chose the company Hidro-geo inžinjering from Tešanj.

In addition to hiring a company that does not have a license to work on such a project, in 2018, he also violated the Law on Geological Exploration of FBiH by failing to obtain the approval of the FBiH Ministry of Energy, Mining and Industry for detailed groundwater exploration.

CIN journalists found that Talić’s company submitted designs and studies of almost identical content, thus charging for the same work multiple times. The documents contain identical images, maps, wording, and even typos.

However, Talić claims not to remember who did the documents or what was written therein: “I really do not recall writing the same thing four times, it is impossible. No one will pay for it, nor will I ever allow it.”

From August to December 2018, designs and studies were prepared and drilling was done to a depth of 165 meters, but no water was found.
New year, new contracts
In February 2019, Peštek decided to start the project from the scratch, as if nothing had been done a year earlier. He continued as before, making similar mistakes.

This time, he hired the company Geo Konzalting to develop a design for underground water exploration. Unlike InfraPlan, this company had a permit for geological exploration based on which the Otoka Swimming Pool obtained approval for drilling from the FBiH Ministry of Energy, Mining, and Industry.

However, the journalists found that the content of the design prepared by Geo Konzalting is almost the same as the content of documents prepared by InfraPlan, which the Otoka Swimming Pool already paid for in 2018.

The director of Geo Konzalting Elvir Manso says he is not familiar with the contents of the design even though he signed it. His company received almost BAM 7,000 for the work.

After that, Peštek rehired InfraPlan and paid them BAM 7,000 KM for advice on the machinery required to drill to a depth of 300 meters.

In nine months, Zlatan Talić’s company InfraPlan earned nearly BAM 34,000 from the water supply project of the “Otoka Olympic Swimming Pool” (Photo: CIN)

After that, no works were done on the project. In early 2021, the inspector of the FBiH Inspection Affairs Administration asked them to start the works as ordered by the decision of the Ministry. Peštek then gave a statement to the inspector, but he failed to mention the works from 2018.

In the meantime, the permits expired and the new management of the Otoka Swimming Pool suspended the project because they found that it was unjustified.

According to the current director, Avdija Hasanović, no one in the company analyzed the documentation, but he decided to do so after CIN started the investigation. He claimed to have been shocked after reviewing the design and the study: “BAM 30,000 was paid for 10 pages of text, which was frantically copied from one design to the other i.e., from one study to the other.”

About BAM 54,400 was spent on the failed project, and the Otoka Swimming Pool paid one more contract from its own funds. The largest share went to the company InfraPlan.

In 2019, the Sarajevo Canton Prosecutor’s Office received an anonymous complaint about this project but decided not to investigate due to a lack of grounds for suspicion that a criminal offense has been committed.

Despite the money spent, no water was found, and the new management of the Otoka Olympic Swimming Pool filed a criminal complaint to the Sarajevo Canton Prosecutor’s Office regarding the failed project (Photo: CIN)

Hot potato
During his four-year term of office, Peštek received an average monthly salary of around BAM 2,700. Shortly after assuming the office, his monthly income began to rise. CIN journalists discovered that he received perks he was not entitled to.

For this, he had the support of close associates and members of . They granted him incentives, a salary add-on, and compensation for medical treatment in the total amount of BAM 20 thousand.

Today, they either do not remember how and why they allowed him to receive these benefits or they blame one another.

They rewarded him with a six-month incentive in the amount of 30% of his salary for exceptional results and good work in 2018. In half a year, he received more than four thousand BAM in incentives in addition to his salary.

The incentive was approved based on the provisions of cantonal law that applies to city enterprises and confirmed by the Cantonal Inspection.

In March 2019, Peštek passed a rulebook that, among other things, provides for a 20% salary bonus for the director. Four days later, he signed a new contract with the Supervisory Board, thus finalizing the permanent increase in his salary.

According to Mirza Džananović, a lawyer for commercial, civil and labor law, a director should not be issuing a rulebook stipulating any perks for the director.

Hadžiomerović and Muharemović, former members of the Supervisory Board, do not remember why they granted a salary add-on to Peštek, nor whose idea it was. While sure that it was not their idea, they still supported it.

The former president of the Supervisory Board, Amina Mujkić, could not speak with CIN journalists due to health problems. The legal service of the “Otoka Olympic Swimming Pool” claims that no act of the company provides for position-related salary add-on. Nevertheless, Peštek received about BAM 13 thousand on this ground.

“If someone wants to favor you, they will invent a position bonus for you because you do some work for another 20%. What does this mean? Either it’s a salary or it’s not a salary. If it is an incentive, then there must be a special reason for it”, says Elvir Hadžiahmetović, president of the company’s Assembly.

According to Elvir Hadžiahmetović, president of the Assembly of the “Otoka Olympic Swimming Pool, a director cannot receive an incentive for regular work, only for exceptional results (Photo: CIN)

The controversial rulebook is still in force, but the current Supervisory Board decided that director Hasanović will not use this privilege. He says that he has not had time to amend the Rulebook, but that he plans to do so.

In addition to the incentive and position-related salary add-on, Peštek also received a BAM 1,836 compensation for the treatment of a family member, as well as for being infected with the coronavirus. These were approved by his closest associates who did not have the authority to do so.

“I don’t think this was a criminal offense or a misdemeanor or anything like that because human life was at stake and I would do it for anyone when life is at stake,” said legal adviser Muamera Efendić.

Most of the employees of the “Otoka Olympic Swimming Pool” were infected with the coronavirus, but Peštek was the only one who received compensation for treatment.

Peštek was dismissed on September 23, 2021, before the end of his term, after the City Council did not approve the Annual Report on the company’s work. Six months later, the new director, at the initiative of the Supervisory Board, filed a second criminal complaint against Peštek to the Sarajevo Canton Prosecutor’s Office. The complaint says he abused his position, worked negligently, spent public funds in a non-transparent manner, and violated procedures by paying incentives and treatment compensations to himself and his closest associates to the detriment of the company. The Prosecutor’s Office is still checking whether there are elements of a criminal offense in connection with procurement and payment of benefits.