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Contractor Gifts

Data from the “Krik” story, according to which one of the biggest contractors in “Belgrade Waterfronts” gave gifts to the brother of the former Belgrade mayor, create suspicion of corruption.

It is widely known that public procurementsare often subject of corruption and backlash to decision makers, even when there is open competition. With this in mind, it is logical to assume that the situation is significantly worse in situations where public funds are spent without public procurement. This is exactly the case at “Belgrade Waterfronts”. About 90 hectares of the Sava coast in the capital was given to a company under this name. Although the Republic of Serbia invested in this project agricultural land of several hundred million euros value, as well as many other things (buildings, infrastructure, expropriation ...), and a private partner whose company is registered in the UAE 150 million and more loans, participation owned is not proportionately invested. Serbia has become only a minority owner (32%) of businesses that builds, sells and rents residential and commercial space in “Belgrade Waterfronts”.

One of the bad consequences of such agreement is that procurements of works for the purposes of construction of "Belgrade Waterfronts", including not only the construction of buildings but also public buildings (bridge, streets) is not covered by the Law on Public Procurements, but this company can be decide who the contractor will be, as if it were a real private investor.

In reality, it is a firm that manages public resources of significantly greater value than the investment of a private partner, and the public interest should be protected in its operations.

For example, if the construction of buildings is paid more than it is worth or more expensive than it has to for the value obtained, the total profit of the enterprise will be less, and therefore the revenues for the state.

The KRIK text does not talk about how “Belgrade Waterfronts” selects contractors and how much it pays, and therefore it is not yet known whether part of the state's potential revenues from this construction venture is drawn through inflated costs.

 However, it is said that a construction firm that is doing a significant portion of the work ("Millennium Team") and its affiliates give gifts to the former mayor's brother.

Despite the fact that this private company can waste its resources at the request of the owner, it is not logical to think that any business owner would without reason reduce their own income. On the contrary, it would be logical to think that he was forced to give such a gift, in order to reciprocate the jobs he had received, or to offer such a gift himself.

The situation in which the donor is associated with one of the main promoters of this way of implementing the project "Belgrade Waterfronts" within the Serbian authorities, further reinforces this doubt. The logic and doubts published in the media, even when substantiated by evidence, have rarely been sufficient reason for the prosecution to examine the case.

This story is another reminder that citizens must have the right to access information considering the work of state-owned enterprises, and not only when that ownership is half-way, but also when the state has outsourced significant resources to those enterprises.

For example, if the information regarding contracts concluded by “Belgrade Waterfronts”are made known to the public, it would be far easier to determine if it has any excess costs that diminish the profit of the state and the city.