Railroads in Management Upheaval

The Union of Railroad train drivers of Republika Srpska (RS) Railways is planning a general strike today to protest the removal of two senior managers who it says were fixing the railroad after years of abuse. Union negotiators and management were expecting talks to continue today, but said last night that some of their demands had already been accepted, including reinstatement of one of the dismissed managers.

Unions and some current managers fear that suspended Director General Sreten Telebak, who is under investigation for abuse of office and commercial crimes, will be reinstated and bring the railroad back to the days when, as they see it, it was filled with widescale corruption. One of those concerned is Milan Kiković, an executive director at the railroad. In 2004, Telebak and the company”s Supervisory Board forbade Kiković, a traffic inspector for the RS Office of Inspections at the time, from entering railroad property and forbade railroad personnel from giving him information. A year earlier Telebak and the board requested he be removed from his job.

Kiković claims the problems stem largely from his complaints about criminal activities at the railroad. The inspector filed at least eight criminal complaints between 2003 and 2006 that led to the arrest of Telebak and nine other managers starting June 12 of this year. The Special Prosecutor’s Office of the RS is investigating some of the complaints.

In April, Kiković was named one of four executive directors at the railroad and is in charge of freight and passenger traffic. Telebak was released from prison Aug.6, after which things started to happen.

In a special meeting Aug. 20, the board removed Milan Jovanović, executive director for infrastructure, and Nenad Cvijanović, executive director of finances. Tomo Grabovica, president of the board, told reporters for the Center for Investigative Reporting in Sarajevo (CIN) that their poor financial performance was the reason for their removal. However, during the terms of Jovanović and Cvijanović, the RS Railways earned more and spent less than in previous years under Telebak, according to financial data.

The fired directors said they are witnesses in the case against Telebak.

Kikovic said he believes that the ground is being laid to reinstall Telebak to his position. CIN obtained unsigned copies of a decision to lift the suspensions of Telebak, Srećko Šaran, and Momčilo Vračar as of Aug. 16 although the papers are not signed.

The fired workers say the supervisory board is trying to hide evidence of corruption of the board and Telebak.

The Union of Train Drivers agrees, and said in a decision to organize a strike that “(We) request the replacement of General Director (Ljubo Pašalić) and President of the Supervisory Board Tomo Grabovica and member of the supervisory board Milko Gogić, who are in a conflict of interest with RS Railways.” They also cite the “dismissal of staffers who gave immeasurable contributions in disclosing and preventing organized crime” as a reason for the strike.

Director General Ljubo Pašalić denied the firings were for revenge and said they were a matter of performance.

“Tomo Garbovica said they had issues in all of their departments for a long period of time. Their business results have been controversial for the past six to eight months. I had no problem sacking them,” he said.

The firings are the latest episode after a series of allegations and counter allegations that have ripped the railroad apart over the past five years.

As early as 2002, the union and one of the directors filed criminal charges over the management’s decision to contract out repair of locomotives rather than fixing them in house, buying unneeded and unsuitable locomotives for high prices, and selling scrap steel at below market prices.

Prosecutors say they are investigating whether the railroad traded land for transporting oil with a private company, which is illegal. In Kiković’s complaint, he found no record of the oil being transported while the company has kept the railroad’s land and built an oil terminal on it.

Prosecutors are also looking at coaches sold to Montenegro and Slovenia that appear to have been in working condition even though RS Railways identified them as scrap and sold them at scrap prices. That made for a difference of 10,000 KM per wagon, said Gojko Vasić, chief of the criminal section of RS Ministry of Interior (MUP).

“Millions are at stake and that’s only in direct damages, and there are indirect damages which are higher. It is a bit harder to calculate what the exact damage is,” says Ratko Đurčić, director of investments and development for RS Railways. Đurčić was one of a number of senior managers who lost their jobs after they raised questions about criminal activities.

Kiković also had many additional allegations including that the railroad gave 70 percent discounts to some customers. The railroads also awarded a tender to Telma d.o.o. of Doboj for work on a railroad crossing, even though the company was owned by Marko Arsenić, a former executive director of the railroads.

An audit by chief auditor of the RS Boško Čeko submitted to the Prosecutor’s Office found that the bookkeeping was a mess and that the Railways had over-reported income and underestimated expenditures in 2003 and 2004. The audit found that the railroad did not keep track of equipment and property accurately. The railroad failed to collect rent and fees for services from private companies, that Kiković said, included some “business partners” of railroad executives.

Telebak agreed to comment, but was unable to for this story because he was hospitalized after his prison stay.