Mayor: EBRD loan conditions unacceptable

Why are City officials in Belgrade are suddenly trying to blame the EBRD and EIB for insisting on international standards for the resettlement of the Gazela community? The City has had years to work on a resettlement that meets international standards, yet now officials are acting as if these standards have suddenly appeared from nowhere.

Right from the start of the project several years ago it has been clear that EIB and EBRD financing depends on following IFC Operational Directive 4.30 on Involuntary Resettlement.

The City of Belgrade and the Serbian government have not complied with this Directive, most notably due to the following:
• The City of Belgrade has provided only temporary accommodation for the affected people, but the Directive requires permanent accommodation.
• Little attention has been paid to providing job opportunities for the resettled people.
• For those from outside of Belgrade who were transported back to their places of origin, no Resettlement Action Plan has been disclosed at all. Recent reports suggest that apart from some one-off payments from local authorities (a practice absolutely not endorsed by international standards), some of them are receiving no further support at all.
• The Gazela residents from Belgrade were not consulted about the Resettlement Action Plan - it was only disclosed publicly in January 2010, several months after the resettlement.

If the Belgrade authorities accept money from the EIB or EBRD then they must also accept their rules, including one that will prohibit Serbian firms from re-building the Gazela bridge, exactly as they with the Ada Ciganlija bridge when they blocked Serbian construction companies from building a bridge in the Serbian capital!

The Belgrade City authorities do not need funding from foreign government controlled banks like the EIB, EBRD, IMF or World Bank. Belgrade City Council could set-up its own bank and issue its own currency to Serbian firms who would undertake this work.

The Serbian bridge-company Mostogradnja could undertake this work and would receive as payment Belgrade City "credits." Mostogradnja could use these City “credits” to pay all its taxes to the City authorities. If it had an excess of credits, then it could sell these to other businesses and Belgrade residents.

Any company which refused to accept these credits as payment would not be invited to tender for this job or any other in the Serbian capital.

since the EUR 33mn loan would have an interest rate of 25 percent, rather than five
--
Who on earth pays 25% interest? Even 5% is high for €33m. These corrupt DS officials running Belgrade need to go.

How right you are Michael. The same can be said about the Dinar and the distribution of government bonds. Instead we take out loans out in Euros and then we need constant intervention, wasting hundreds of millions in our foreign currency reserves to prop up the dinar.

Mister

You are mistaken. The EBRD, the main financier of the new Ada bridge, laid down rules that were carefully designed to exclude Serbian companies from the construction. The EBRD insisted that any company bidding for the contract must have a turnover of X million Euros. Mostogradja, Serbia’s world famous bridge building company had a turnover of slightly less than X million and was not allowed to bid for the tender. I know people in the EBRD who were embarrassed by this decision, but it was taken at a very senior level.

You are of course right that Serbian companies are now building the bridge as sub-contractors, but the real profits from the deal are held by the main contractors who are German and Austrian companies.

Mr Djilas:
Looks to me that you are against housing romas even if the loan was free.
You just want them to live in tents or makeshift camps hopping that one day they will go somewhere else or die.They are Serbian citizens and they deserve better.

They did not block Serbian companies. They insist on international standards. In particular safety. It is perfectly open for Serbian companies to compete. Of course what you do not mention is that subcontract work is done by Serbian firms and the staff in the international companies have a large Serb employee ratio.

Are you in or out of Europe, that is another question.

But isn't it clear that EBRD was established to support the FDI and invetsments of western companies in post-socialist countries? It helps to open new markets for western companies. Thus no wander that western companies get full support and not the locals.What kind of "international standards" we are talking about in a ruined after-war country? Every country in post-socialist block is unique and has it's own requirements for development. Those western companies hire locals, but they do it because the locals are cheap labour. The profit goes to the HO.

Why are City officials in Belgrade are suddenly trying to blame the EBRD and EIB for insisting on international standards for the resettlement of the Gazela community? The City has had years to work on a resettlement that meets international standards, yet now officials are acting as if these standards have suddenly appeared from nowhere.

Right from the start of the project several years ago it has been clear that EIB and EBRD financing depends on following IFC Operational Directive 4.30 on Involuntary Resettlement.

The City of Belgrade and the Serbian government have not complied with this Directive, most notably due to the following:
• The City of Belgrade has provided only temporary accommodation for the affected people, but the Directive requires permanent accommodation.
• Little attention has been paid to providing job opportunities for the resettled people.
• For those from outside of Belgrade who were transported back to their places of origin, no Resettlement Action Plan has been disclosed at all. Recent reports suggest that apart from some one-off payments from local authorities (a practice absolutely not endorsed by international standards), some of them are receiving no further support at all.
• The Gazela residents from Belgrade were not consulted about the Resettlement Action Plan - it was only disclosed publicly in January 2010, several months after the resettlement.

Mr Djilas:
Looks to me that you are against housing romas even if the loan was free.
You just want them to live in tents or makeshift camps hopping that one day they will go somewhere else or die.They are Serbian citizens and they deserve better.

If the Belgrade authorities accept money from the EIB or EBRD then they must also accept their rules, including one that will prohibit Serbian firms from re-building the Gazela bridge, exactly as they with the Ada Ciganlija bridge when they blocked Serbian construction companies from building a bridge in the Serbian capital!

The Belgrade City authorities do not need funding from foreign government controlled banks like the EIB, EBRD, IMF or World Bank. Belgrade City Council could set-up its own bank and issue its own currency to Serbian firms who would undertake this work.

The Serbian bridge-company Mostogradnja could undertake this work and would receive as payment Belgrade City "credits." Mostogradnja could use these City “credits” to pay all its taxes to the City authorities. If it had an excess of credits, then it could sell these to other businesses and Belgrade residents.

Any company which refused to accept these credits as payment would not be invited to tender for this job or any other in the Serbian capital.

since the EUR 33mn loan would have an interest rate of 25 percent, rather than five
--
Who on earth pays 25% interest? Even 5% is high for €33m. These corrupt DS officials running Belgrade need to go.

How right you are Michael. The same can be said about the Dinar and the distribution of government bonds. Instead we take out loans out in Euros and then we need constant intervention, wasting hundreds of millions in our foreign currency reserves to prop up the dinar.

They did not block Serbian companies. They insist on international standards. In particular safety. It is perfectly open for Serbian companies to compete. Of course what you do not mention is that subcontract work is done by Serbian firms and the staff in the international companies have a large Serb employee ratio.

Are you in or out of Europe, that is another question.

Mister

You are mistaken. The EBRD, the main financier of the new Ada bridge, laid down rules that were carefully designed to exclude Serbian companies from the construction. The EBRD insisted that any company bidding for the contract must have a turnover of X million Euros. Mostogradja, Serbia’s world famous bridge building company had a turnover of slightly less than X million and was not allowed to bid for the tender. I know people in the EBRD who were embarrassed by this decision, but it was taken at a very senior level.

You are of course right that Serbian companies are now building the bridge as sub-contractors, but the real profits from the deal are held by the main contractors who are German and Austrian companies.

But isn't it clear that EBRD was established to support the FDI and invetsments of western companies in post-socialist countries? It helps to open new markets for western companies. Thus no wander that western companies get full support and not the locals.What kind of "international standards" we are talking about in a ruined after-war country? Every country in post-socialist block is unique and has it's own requirements for development. Those western companies hire locals, but they do it because the locals are cheap labour. The profit goes to the HO.