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No public procurement for EXPO 2027 project

Works for the construction of the exhibition area for EXPO 2027, facilities for the accommodation of participants and visitors, the National Stadium and supporting infrastructure – the value of which could amount to one billion euros – will be contracted without the application of the Law on Public Procurement, which creates a significant risk that the costs will be higher than would be in conditions of the entire competition, Transparency Serbia assesses.

The special law for EXPO 2027 (full name: "Law on special procedures for the realisation of the international specialised exhibition EXPO Belgrade 2027")[1] repeals the Law on Public Procurement, as well as certain provisions of other regulations (on expropriation, planning and construction). That "recipe" has already been tested in several other cases, the most famous of which are "Belgrade Waterfront", "Moravian Corridor", and the (unrealised) "South Stream". Due to the exclusion of the application of the Law on Public Procurement, if discriminatory conditions are set for selecting contractors, it will not be possible to dispute this before any state authority.

The Government of Serbia proposed a special law for this project together with the budget for 2024 and numerous other regulations, which significantly reduces the chances that it will be adequately considered in the parliament, while the Ministry of Finance did not organise a public debate on the draft of the law, even though it was mandatory based on the Law on State Administration.

The draft law on EXPO 2027 envisages the establishment of several state-owned companies, which will have the status of investors. Article 14. states that these companies "shall not apply the provisions of the law governing public procurement" and that they will themselves regulate the rules for their procurement procedures and "obligation to ensure the transparency of the procedure". Since the special law does not prescribe any additional conditions, there is no obstacle for the future procurement rules of these state-owned enterprises to be far below the standards of the Law on Public Procurement and for "transparency" to be reduced to merely informing the public about how much has been spent.

We especially point out that the Government of Serbia did not even try to justify the cancellation of public procurement for this valuable project in explaining the bill. Even the urgency of implementation, cited as a reason for deviating from other regulations, would certainly not be a valid reason, because the Law on Public Procurement allows shortening deadlines when justified.

What makes this paradox even more significant is that the proposal to amend the Law on Public Procurement will probably be discussed at the same session of the Assembly.[2] Numerous proposals from civil society to improve the law were rejected[3] just because the provisions of the Law on Public Procurement "are already harmonised with EU Directives". On the other hand, the explanation of the special law for EXPO contains a patently false claim - that "there are no relevant EU regulations with which it is necessary to ensure compliance".

According to the 2024 budget proposal[4] presented by the Ministry of Finance, in the next three years, 67.8 billion dinars are planned for EXPO 2027, and 49 billion dinars for the construction of the National Football Stadium. In total, it amounts to about one billion euros. It can be assumed that the largest part of this money will be spent for the execution of the works, bearing in mind that the investor is exempted from the obligation to pay a fee for arranging the construction land.