Scam of the century (part four)

Scam of the century (part four) The consequences of these kinds of misusages pose a real threat to the enterprise EPS, whose integral part Kolubara is, the most likely being that EPS will have to additionally incur debts for every future major investment. A major future investment for Kolubara is removal of the settlement Vreoci. Underneath Vreoci, according to the experts, there are enough coal supplies to last several decades. Kolubara coal is used to produce more than 50% of electric power in Serbia If the settlement Vreoci does not get removed, Kolubara will soon be out of available coal mining fields, and without Kolubara coal, Serbia will have to import electric power under much higher prices. In the past episodes, Insider revealed that in the past 8 years Kolubara spent more than 130 million Euros for rental machinery, much more than it was expected. The costs of Vreoci removal, one of the largest investments coming for Kolubara- electric power supplies for all citizens depend on this- is estimated at 150 million Euros. However, authorized institutions still do not question a responsibility of those who by irresponsible behavior or abuse of power have made a potential damage to the whole state and its citizens. Criminal charges filed against management of the state enterprises are left, for years, without the ultimate outcome. The police is suppose to investigate misusages, but, as many information point out, it is probable that the police itself was involved, in the previous years, in the entire mechanism of money pullouts from Kolubara. According to our best knowledge, Ministry of Internal Affairs conducted an internal control, but this report has remained a secret. It turned out, as Insider has revealed, that Kolubara paid machinery engagement even for purposes of Anti Terrorist Unit. According to Ministry of Internal Affairs official answer to Insider, the department of internal affairs conducted an investigation and determined irregularities but it is now known if someone got punished or not. Also, as Ministry of Internal Affairs specified, Dragan Tomic, the former Kolubara CEO was contacted by the captain of Gendarmerie, given that Kolubara machineries were also engaged in Security Ground Zone. The name of the captain remains undisclosed. A contract regarding a donation was signed with Kolubara in 2007 when the commander of Gendarmerie was Borivoje Tesic. According to our information, during the period Kolubara had the greatest expenses regarding rental machinery, at the same time when all the costs drastically exceeded budget made for this purpose, Dragan Tomic, Kolubara CEO at the time, in a form of donation to Anti-Terrorist Unit of Serbian Ministry of Internal Affairs, assigned the usage- without compensation- of 8 machineries. Interestingly, Predrag Pavlovic is an employee in that same Unit, employed by the former interior minister Dragan Jocic himself. Predrag’s brother, Nenad Pavlovic called Neks, was at the same time a driver for Kolubara CEO, Dragan Tomic. “Kalca” company, owned by Predrag’s wife Marija, used to rent machinery to Kolubara for years, and at the same time, was a direct coal buyer. Insider obtained the report by the police department of internal affair, which cites irregularities regarding the donation. Eight heavy duty construction machineries built shooting ground in Lipovica during 2007 and 2008, while one machine stayed in the Unit for additional 6 months. The report stressed another irregularity, namely that Dragan Tomic had not specify which machinery were conceded, the time period of engagement, did Kolubara own these or not, were subcontractors engaged too, who provided drivers or who was supposed to pay for their work. It was not specified who was supposed to bear the costs of amortization and fuel. The internal control determined the machinery paid by Kolubara were supplied with fuel from Ministry of Internal Affairs gas stations, but there was an additional fuel involved, a donation by “Lukoil” company, 60.000 liters. From later decisions, it is evident that the value of building works on the shooting ground was 104.329.761 dinars, 5 machineries were from privately owned company “Iris”, while the ownership of the rest 3 was not determined. Machinery for Anti Terrorist Unit were conceded as a donation, but also Ministry of Internal Affairs declared, regarding the outcome of the investigation by the department for internal affair control, that machinery from Kolubara were also engaged in Ground Security Zone. This donation to Ministry of Internal Affairs was approved when Kolubara CEO was Dragan Tomic. Tomic at present heads a party coalition of Democratic Party of Serbia-New Serbia in the Belgrade Assembly. At the same time, he is a consultant to CEO for investments in EPS. Dragan Tomic was Kolubara CEO from 2004 until the end of 2007. This is exactly the period when Kolubara expenses for rental machinery begun to increase. Privately owned machinery allegedly operated non-stop, every day in a month. While he was at the position of Kolubara CEO, Tomic even engaged a machine owned by “Kacer Turist”, a company where he was a co-owner, while a driver allegedly operated on that machine for 96 hours non-stop. These were all paid by Kolubara whose CEO was DraganTomic. During those years, more than 200 privately owned companies, mostly from Lazarevac, had their own machinery engaged in Kolubara. As well, Tomic’s sons are the owners of “Tosa Mond”, a company founded in 2005; one of the business activities of the company is sales of Honda vehicles. A general representative of Honda in Serbia is “Delta” company owned by Miroslav Miskovic, while “Tosa Mond” is one out of five sales outlets within Serbia. Interestingly enough, the entrepreneurs with the greatest number of machinery rented to Kolubara while Tomic was the CEO of this state enterprise, used to buy Honda vehicles from “Tosa Mond”. One of the major entrepreneurs is Vitomir Dimitrijevic, an owner of “Devix” company. He acknowledges purchasing Honda vehicles from “Tosa Mond”, but doesn’t see anything peculiar about it. Vitomir Dimitrijevic, “Devix” company, Lazarevac: The fact is, I own a company, I have a number of vehicles for my business needs, my company bough 3 cars. B92: Honda? Vitomir Dimitrijevic, “Devix” company, Lazarevac: Yes, we bough… B92: From Tomic? Vitomir Dimitrijevic, “Devix” company, Lazarevac: No, not from Tomic, but from the company. Tomic is a name, and a company is a company, it’s like I didn’t buy as Vita Dimitrijevic but for the company, and the vehicles are still in use, for business purposes. I don’t see how’s important if it’s Honda or… B92: Was there any agreement, or any requests that you have to purchase those cars from them, because, according to our sources, you are not the only one who bought those cars? Vitomir Dimitrijevic, “Devix” company, Lazarevac: It is very likely that I wasn’t the only buyer, but to be honest, perhaps that was a kind of moral obligation, to buy. I wouldn’t have bought if I really did not have a need, a moral obligation to buy Honda and not to buy, let’s say, Reno or Mercedes…etc. B92: The entrepreneurs who made money in Kolubara, at one point, and then in the next, they are buying Honda cars from Tomic’s lot. Does this looks to you…It looks to me as a tit for tat? Vitomir Dimitrijevic, “Devix” company, Lazarevac: well, I’ve already said this was, in a way, a moral obligation, considering how long we’ve known each other and so forth. But, I don’t believe, it’s possible but I don’t believe in the stories about how many companies went through Kolubara, 280, 290, someone says 300… B92: 230. Vitomir Dimitrijevic, “Devix” company, Lazarevac: He sold that many Honda cars since he opened a shop? I don’t believe so, maybe I’m wrong, but I don’t see that many Honda cars driving around Lazarevac. Dragan Tomic refused an interview with insider, and hence he lost an opportunity to answer the question if Honda car purchasing from “Tosa Mond” company, owned by his family members, had anything to do with engagement of machinery in Kolubara. Also interesting appears that Kolubara, the state enterprise, engaged machinery in Belanovica, a local community in Ljig municipality, but it’s not known for which purpose and for how long the machinery operated, or in which time period. The former PM Vojislav Kostunica, and Nenad Pavlovic called Neks, the driver of Dragan Tomic, both own houses in this local community numbering only 500 voters, while an actor Tihomir Arsic and Dragan Tomic co-owned a property called Zmajevac. According to media reports, they donated the property to Serbian Orthodox Church in 2008. Ljig municipality president claims he didn’t always have an insight of Kolubara machinery engagement in Belanovica, even though this is the territory of his municipality. The municipality became involved in monitoring in 2007, but the machinery, paid by Kolubara, were already employed before that year. Miroslav Maksimovic, Ljig municipality president: Well, as I said so, those machinery were already operating in 2006. B92: They were working in Belanovica, too? Miroslav Maksimovic, Ljig municipality president: Yes, yes. In 2006, they operated in Belanovica, mostly. As far as I know and understand, the machinery worked on uncategorized and some municipality roads, that we weren’t able to do ourselves, they mounded roads. I think t machinery worked in Belanovica. B92: From Kolubara? Miroslav Maksimovic, Ljig municipality president: From Kolubara, yes. B92: In Belanovica much more than in the rest of the Ljig municipality. Miroslav Maksimovic, Ljig municipality president: Well, OK, you want to lead me on to something so logical… B92: I’m not leading you into anything, I’m just asking a question. Miroslav Maksimovic, Ljig municipality president: Hence, if someone has, in a part of his municipality, or in the municipality, people who are willing to help, I don’t see anything wrong in there. Due to the engagement of machinery in the Ljig municipality, an anonymous criminal charge was filed against its president, Miroslav Maksimovic and 18 more individuals. The prosecutor’s office, regarding this charge, has asked, from police, additional information. The police report to the prosecutor’s office from March 2010 stated, among other things, a number of irregularities, such as exaggerated working hours, a machine working allegedly on 4 different places at the same time, a man working at 3 different places at the same time. Insider has made inquiries about the status of this legal procedure, but we still have not received an answer from the prosecutor’s office in Valjevo. Miroslav Maksimovic, Ljig municipality president: I have given a statement in response to these anonymous accusations, I emphasize “anonymous” criminal charge. B92: You gave a statement to the police? Miroslav Maksimovic, Ljig municipality president: Yes, yes, yes. B92: Do you know the procedure status of the charge? Miroslav Maksimovic, Ljig municipality president: No, believe me, I don’t know. In this state every governing body should do its own duty, that’s not disputable, I’ve seen that criminal charge and the people called to make a statement regarding the issue, and those are mostly presidents of the local communities from the territory of Ljig municipality. Some appointed people, or who were assigned to represent Ljig municipality, that’s has nothing do with the truth, but I say, I haven’t inquired around. In 2008, another criminal charge was filed against Dragan Tomic, his deputy Milan Obradovic and 10 more individuals, mostly the wealthier entrepreneurs in Lazarevac. The charge was filed by Kolubara workers, signed as “Coward”. Interestingly, District prosecutor’s office in Belgrade has submitted four times a request to the police for additional information regarding malversations in Kolubara. Only recently, the police have questioned, among others, Dragan Tomic, Vladan Jovicic, Vitomir Dimitrijevic, and Radosav Savatijevic Kene. Dragan Markovic was not interrogated, although his name appears in the criminal charge filed by anonymous citizens in 2008, though at that time, he did not have at least formally, machinery engaged in Kolubara. From 2004-2005 Kolubara rented privately owned machinery with no tender offer. In 2004 and 2005, several daughter companies separated from Kolubara. The daughter companies had a right to be engaged in business with Kolubara with no tender offer in the first four years of their independent operations. Then, the daughter companies engaged subcontractors, entrepreneurs also without tender. In 2009, Kolubara had to announce a tender offer, wherein a daughter company, “Kolubara Gradjevinac” won again. Nebojsa Ceran, Kolubara CEO since 2009: Based on that contract, Kolubara managed to save additional couple of million euros per year. Hence, I think that average prices are around 10% below those we were talking about in august, when they were curbed and number of working hours reduced to 7 and a half. And if you ask me if the problem was solved this way, perhaps a small scale study should be done in order to see what Kolubara future is regarding machineries. I repeat, we have been in a very difficult economic situation without enough funds for investment works, but we managed in 2009, pardon me, in 2010 and 2011, to allocate 5-6 million euros for new machinery acquisition, in order to reduce the rentals furthermore. “Gradjevinar”, the tender winning daughter company to Kolubara, however, engaged the same privately owned companies as subcontractors. Out of the major players, only the company “Devix”, which participated independently in the tender, has dropped out from the business. The owner, Vitomir Dimitrijevic, appealed due to the irregularities of the tender. He still did not receive the final answer. He states that his appeal cites several serious allegations regarding the tender irregularities. Firstly, Kolubara did not define avail of works, secondly, the tender winner “Kolubara Gradjevinar” did not specify parts of the works assigned to subcontractors, thirdly, the subcontractors were not registered in accordance with the tender requirements, and lastly, some subcontractors did not provide a confirmation from the authorized tax authorities. Finally, the most serious allegation is that “Gradjevinar” did not provide proof of ownership regarding all machineries in its tender application. Vitomir Dimitrijevic, “Devix” company, Lazarevac: We initiated the administrative procedure, however, once it reaches those up in the position... This business continues, “Gradjevinar” is working, while all these deficiencies are documented. These are not just so stories, they are documented, these papers record false documents they’ve used to fulfill the right amount of machinery, along with false workers registrations. Interestingly, in 2004 and 2005, 4 daughter companies seceded from Kolubara, while the machinery of the privately owned companies were engaged through the two of them, “Kolubara Gradjevinar” and “Kolubara Usluge”. Furthermore, in addition to one company, none of the daughter companies were privatized despite the Government of Serbia decision. Only the daughter company “Kolubara Universal” was privatized. The company Board president, since the firm foundation until the privatization, was Miroslav Cuckovic from G17 plus. He considers there are two main reasons why the rest of the daughter companies did not get privatized, so far. Lack of motivation to finish this complicated task is the first, while the other reason is that those daughter companies had a right to work with Kolubara without tender, an ideal situation for various malversations. Miroslav Cukovic, the former president of “Kolubara Univerzal” Board and party activist of G17 plus: I was, at one particular moment, when the privatization process took on, and when I realized “Kolubara Univerzal” will be a good story for privatization, there were some interests by certain people to form a consortium to purchase it, and I was informed by the director that those people hold a considerable financial power in Lazarevac. And I simply asked him: ”What are we going to do now, when we have to sell the company”? I could understand a sale of the company to the best world company, but not to those with money, regardless of their respective names. And I’ve seen, in essence, some people are extremely wealthy, willing to pay for instance, 10 million Euros for “Kolubara Univerzal”, because they’ve seen a chance to complete their business in Lazarevac. “Continental” won, a German company, it has infiltrated inside, and we have now what we have. If others had done it the same way, this country would be much better off, and we wouldn’t be having this show. Vladan Jovicic, Kolubara CEO from 2007-2009: We often discuss and talk about societal change of the whole system, which obviously wasn’t made for this time period, or cannot change fast enough as was expected, 2000, all together with 2010, and this means we have over two thirds of the state in some kind of private, finished transitional phase, and where ever we have a connection among privately owned capital and the public one, it provokes suspicions in addition of not being properly legally regulated. Privatization of the companies separated from EPS was not carried out, costs exceeded estimated budgets, major investments are being late, necessary for smooth functioning of the large energy systems and the responsibility for such state of the affairs should be shared by all parties rotating in power since 2000. One of the important and necessary investments ahead of Kolubara is a removal of the settlement Vreoci, a populated location in the Lazarevac municipality. According to the experts, underneath the settlement there is around 550 million tons of high quality coal, necessary for electricity production. This is an investment of the general state interest. Expansion of the largest coal field in the country, “Field D” was planned for 2008-2015. This job is being late despite the real danger of facing coal shortages for electric power production. The only scenario in this case would be to import electric power under much higher prices. Nebojsa Ceran, Kolubara CEO: Investment works are late for a few years, 3 to 5, and this delay is very difficult and almost impossible to make up for. When I say “investment works are late” this means that in 2009, it was not known where coal would be dig out in 2 years, and 2 years in mining is a very near future, because you simply cannot open a new coal field in less than 3 or 4 years. Also, it was not known which machineries will be available or how to provide assets for all those. Firstly, I address here unsolved procedure about the largest expropriation in the history of the Republic of Serbia since building the “Djerdap”. This is claimed by the experts. So, it’s an expropriation of the populated place Vreoci. Vladan Jovicic, Kolubara CEO from 2007-2009: In 2001 and 2002 a lot of people told me I’m such a fool because I want to remove Vreoci, these advocates told me there isn’t any coal there, and that’s about…500 million tons…At that time all those advocates, led by Kori Udovicki, the minister, they even signed a statement about needlessness to remove Vreoci…and now, these same people are the most fervent advocates for the removal, now they understand it’s absolutely necessary to do so to provide stability to electro-energy system in Serbia, and this job is being very late. Vreoci is an old mining settlement with 1180 households, around 3300 people. According to the estimations from Kolubara experts, underneath this settlement, there is around 500 million tons of high quality coal, without which thermo plants Nikola Tesla in Obrenovac, now producing half of electric power for Serbia, wont’ be able to operate. Nebojsa Ceran, Kolubara CEO: The expropriation of Vreoci is a possibility of coal exploitation, miners say around 600 million tons of coal, or 500 million tons, as estimated by some other experts in the mining industry. In each case, it’s an income in billions Euros and for the Republic of Serbia, it’s tens of billions. In the next 40 years. For a long time, the state is planning to remove Vreoci. However, only in 2007, during the government headed by Vojislav Kostunica, Kolubara, the Lazarevac municipality and local community Vreoci managed to agree on the removal conditions, noted in the document entitled “Basic program for Vreoci removal”. The current management of Kolubara and EPS considers this document to be a good foundation for an honest compensation to the population of Vreoci. Vladan Jovicic, Kolubara CEO from 2007-2009: At the time when I was Kolubara CEO, the government proclaimed a public interest over…and that is the end of 2008 already. In the beginning of 2009, I’ve started first rough censuses regulated by the procedure, by the so-called “blue book”, that is “Basic program for Vreoci removal” rectified by the government of Serbia, and in effect still today. Nebojsa Ceran, Kolubara CEO: The expropriation of Vreoci is an issue of outmost importance for Kolubara. The expropriation of Vreoci means normal life, existence for Kolubara and I would dare to say, it conditions to a large extent normal life for the Republic of Serbia in the future. The expropriation of Vreoci fell through twice already, in 1997 and 2003. After that, negotiations were between the local community Vreoci, Lazarevac municipality, Kolubara and EPS and finally, the government approved one of the removal programs of the populated place Vreoci. This was in 2007. I wasn’t in Kolubara at that time, and hence I haven’t participated in this negotiation, but I think this program is reasonable, respects people from Vreoci, and treats them fair. According to “Basic program for Vreoci removal”, Kolubara obligated to pay for all property, and to arrange the new settlement, the latter being partially done on the location Rasadnik in the urban area of Lazarevac. However, only few families have moved in so far. Zelljko Stojkovic, deputy of the president, local community Vreoci: According to our preliminary polls only 6 of our citizens agreed to move into that location... It’s a slippery ground, near the former military cemetery from the Kolubara battle, and considering these factors and many others, the community, in public discussions, has disassociate from this and stated this place does not fulfill the needs of our citizens, especially since infrastructure, such as schools, church, medical centre or cultural center could not be situated there too. According to “Basic program for Vreoci removal” all households have to sign an agreement to move out, then Kolubara, based on a rough estimate, pays them 35 % in advance. The exact estimate is determined during the coal field expansion, and then the rest of the compensation for the whole property follows. Also, as stated in the document, when a person accepts the money in advance, it is considered that he/she also accepts a removal of the old cemetery in Vreoci. So far, dredgers have reached the outskirts of Vreoci, and the next move should be to remove the old cemetery. New location for the cemetery has been assigned, with around 5000 grave places. Here too, Kolubara has invested enormous amounts of money, a few years ago a beautiful chapel was built but people from Vreoci still bury their dead at the old cemetery. They claim the state itself violates their rights and effective laws, and although they have first agreed with “Basic program for Vreoci removal”, now they claim it is a major deceit. Zeljko Stojkovic, deputy of the president, local community Vreoci: That money in advance is a deceit, regardless if a person took it or not, everybody is aware it’s a deceit. It serves only one purpose, that contract has only one purpose, to pull out an agreement on the cemetery exhumation without clear guarantees when, or if, an owner will be removed, since the essence is to dig up the cemetery. So, we’ve seen through this. So, from 2003, we’ve repeated that the cemetery, as a part of the village maybe, yes but by respecting law, but cemetery alone as a cemetery, to remove the Vreoci cemetery, while people and children to live squeezed in between 2 open pit mining in a ghetto, in an environment with major ecological problems- noise, vibrations, dust, heavy traffic and the rest of scourge. Certainly not. The population inhabiting the surroundings of Kolubara coal fields is being removed for decades into new locations, but the removal of Vreoci has caused, so far, the largest problems. The key reason behind these problems is that the state did not have, for a long time, a clear strategy. Another problem is that certain individuals involved are trying to make money out of this affair and Kolubara. Most often, authorized institutions do not react. It is not unusual to plant trees or fruit in order to increase the price for lots, or to build homes and hence increase the price of registered premises. The most serious problem appears to be illegal construction, flourishing in the past several years, with the only aim being- money making. To prevent these and further misusages, in February 2007, a satellite image of the location detected the existing objects and situation on the ground, and the government decided that only property existing at the moment will be paid for. Nebojsa Ceran, Kolubara CEO: We wanted to save honor, of Kolubara, the state and EPS, by not paying for illegal constructions or objects not having a status of additional objects. These objects are numerous, homes built at the edge of a coal filed, exclusively because of the expropriation. B92: They were built for gain? Nebojsa Ceran, Kolubara CEO: To gain in the expropriation process. And this is a public secret. I’ve seen some of these objects, and a lot of opponents to the expropriation have made illegal objects, not all of them, but some did. Others oppose the expropriation from emotional reasons, and I respect them, and understand. But there are some- the owners of the illegal objects who want to gain money out of it. We don’t have a right to pay for such objects, not even by the government decision, and we do not pay and we do not include such objects into the expropriation. But those people are our greatest opponents. Authorized institutions know for some time that certain individuals misuse the fact that the government has to pay for property during the expropriation of Vreoci. Dragan Tomic, the former Kolubara CEO, a party activist of Democratic Party of Serbia, stated in the weekly journal NIN in 2006 (October 26, 2006): “…realization of the expropriation of Vreoci is impeded by an organized group made of several people, who pay for the lots intended for expropriation more than the state, with an intention to sell those same lots to Kolubara under much higher prices”. Why the authorized local institutions have not prevented illegal constructions remained unclear, especially after rectification of “Basic program for Vreoci removal” in 2007. Long time president of the Lazarevac municipality, Branko Boric, another party activist from Democratic Party of Serbia, refused an interview with Insider. Nebojsa Ceran, Kolubara CEO: The new law on planning and construction has given an opportunity to everybody, include those people, to apply for legalization, to enter the process, and they are applying. And frequently, I dare to say, they misuse the process, through pleas to delay. Zeljko Stojkovic, deputy of the president, local community Vreoci: Certainly, there are objects treated as illegal. But, we cannot compare thresh barns made by peasant for hay or something, with some drastic examples of misusages, like- someone is building a cemetery no one needs for 20 000 people, and spends 20 million euros, or with some other misusages. The estimation for the expropriation of Vreoci is around 150 million Euros, and that assets have to be found, otherwise, Serbia will be left without electric power. In “Basic program for Vreoci removal” these expenses are suppose to be paid by the state enterprise EPS and mining basin Kolubara. EPS CEO refused an interview with Insider, but he did answer some questions in a letter. It is clear from his answers that every irrational spending and exceeding of the planned budget, for instance for rental machinery, impacts directly the investment budget. Vladan Jovicic, Kolubara CEO from 2007-2009: In the meantime, all possible political players have rotated at the positions of director, deputy, and manager in Kolubara, while the professionalism was not respected at all. Even today, unfortunately, Kolubara does not have a clear development strategy, nor does EPS. From 2005 to 2009 Kolubara drastically exceeded the planned budget for rental machinery. In these four years, Kolubara spent, solely for renting machinery, around 73 million Euros more than it was initially planned. In these same years, donation and sponsorship budgets also exceeded what was planned for. The largest provisions, in reality representing a kind of donation, went for machinery payment engaged in infrastructure repair works in several municipalities. It turned out, however, that the Protocol designed and signed in 2007 by Kolubara CEO Dragan Tomic and Branko Boric, the Lazarevac municipality president, was actually an alibi to bring in as much as possible machinery owned by private companies. Oddly enough, later on, the protocol was extended by annex to other municipalities as well, wherein Branko Boric signed the basic document on their behalf. Miroslav Maksimovic, Ljig municipality president: I’ve never seen that Protocol, so how could we monitor and control anything, when we haven’t seen it in the first place. You mentioned 2006 in regards to this protocol, in that year, Kolubara conducted control, exclusively. Machinery came, worked on the territory of Ljig municipality, they sent their own men who controlled and monitored those machineries. Kolubara also paid for the works in Ub, Lajkovac, Arandjelovac and Barajevo municipalities. Insider uses this opportunity to apologize to the current president of Barajevo municipality, Branka Savic; in the last episode it was reported she was a president of the municipality from 2006, however, she was appointed at the position in 2007 after the early elections. In 2006, when Kolubara machineries were engaged in Barajevo, municipality president was Rade Stefanovic, a member of Democratic Party of Serbia. In addition to the mentioned municipalities, Kolubara also paid machineries for works performed in Topola municipality, even though the municipality is not even near Kolbara coal fields, hence it cannot suffer the consequences of mining works. Dragan Jovanovic, Topola municipality president: We didn’t have any association with the municipality, but only with Kolubara, this is the 100 times I’m repeating this to you. So, we’ve addressed Kolubara Board, and they approved it, so 2 kilometers of the local road leading to Nikolje monastery were rebuilt. We had nothing to do with it- how many hours they’ve worked, because we were told- “when they are done, they will come back”. Their men signed, we, again, didn’t have anything to do with it. If someone was involved it was their men that signed, we had nothing to do with it. It still remains undetermined why, Kolubara CEO Dragan Tomic and the president of Lazarevac municipality signed documents regarding engagement of machineries paid by Kolubara in other municipalities, in the first place, but also for purposes of Serbian Orthodox Church. Authorized institutions never questioned their responsibility, especially considering that Kolubara anyway pays compensation to municipalities and the state for coal exploitation, in addition to paying compensation due to coal field expansions. Huge expenses for privately owned rental machineries, payments for machinery working hours even when machinery doesn’t operate, designing work protocol for several municipalities which drastically increased the number of machineries involved, larger allocations for donations and sponsorships than it was originally planned for, and many other totally inexplicable things have casued that Kolubara investment budget became thin. Because of these peculiar business endeavors, Kolubara will have to take assets from EPS in order to remove the settlement Vreoci. Sufficient coal quantities needed to supply electric power production in Serbia depend on this removal, and if EPS does not provide enough assets, the only way to pay for major but necessary investment will be another loan. The expenses for privately owned rental machinery were the greatest in 2008, when Kolubara CEO was Vladan Jovicic, a member of Democratic Party of Serbia. However, the drastic rise in expenses started during the directorship of Dragan Tomic, also a member of Democratic Party of Serbia. According to the evidence we came to, it was at that particular time Kolubara paid for privately owned rental machinery wherein machineries operated allegedly for the whole month, without a minute of break. Slobodan Djeric, Kolubara CEO from 2001-2004: If you look at the work list of that machinery, you could find 3,or 5, or 6 signatures, starting from coal field supervisor, some chief, director and so on. In a way, I do not blame those people, we have lost every trace of morality. Those people sign such things in a indifferent way, because someone said so, no one ever was called responsible for it. So, it’s difficult, to monitor such system, I told you so, already. A monitoring system would assume firstly how that particular machinery was engaged. I want to tell you, they were engaged… They were engaged who knows how and who engaged whose machinery. Kolubara management is of course responsible, if at all, and they will probably explain this was all necessary. Then, they find their own men, who say: “sign it, it’s nothing”. Well, it is nothing, when no one ever, due to impotence of the state, was hold responsible, there were charges, anonymous, or some other, criminal and so forth. In the past 10 years within EPS and 11 dependence companies doing business within EPS, the same people are being rotated from one position to another. -the current EPS CEO, Dragan Markovic, a party activist of Democratic Party, in the past 10 years was a director of one of EPS departments, he was executive EPS director and then an executive director of “Tent”. - Aca Markovic, the current EPS board president, a member of Socialist Party of Serbia, before this position he was a coordinator of EPS management, assistant to director for development and investments, a member of Council of Regulatory agency for Energy - Petar Knezevic, the current “Tent” director, a member of Democratic Party of Serbia, in the last 10 years he was a technical director of “Trent” but also a president of EPS Board at the time of the largest money extraction from Kolubara. - Nebojsa Ceran, a member of Democratic Party, Kolubara CEO since July 2009, before he was acting director of “Tent” CEO, then assistant to general “Tent” director, from 2007 director of “Tent” directorate. -The current Kostolac CEO, a part of dependence company within EPS, Dragan Jovanovic, a member of Socialist party of Serbia; he was “Tent” CEO until January 2001, when he was replaced after October 5th changes. In 2004, he returns to EPS as a director of one of the departments, and then he rotates to become deputy to Kostolac CEO. - Dragan Tomic, a member of Democratic Party of Serbia, current consultant to EPS CEO, he was Kolubara CEO, deputy of EPS CEO, and at the same time he was a president of Assembly of dependence company mining basin Kolubara. Several people from this list are rotating from one position to another within EPS, and at some point, they were superiors to one another and vice versa. Hence a question: is there really a strong motivation and determination to question misusages and irrational expenses in full? At the time when Kolubara expenses were the greatest, directors of this state enterprise were members of Democratic Party of Serbia. However, in 2008, at the peak of expenses, EPS Board included representatives of the all parties presently and still in power. They all had an insight into Kolubara endeavors, Kolubara being an integral part of EPS. Miroslav Cukovic, the former president of Kolubara Univerzal Board and member of G17 plus: The first instance is EPS Board, which used to rectify plans of all 11 dependence companies, then, of course, Ministry of Energy, PM…As far as control goes, it’s absolutely clear that EPS Board has the control, and ministry of Energy, they control all energy resources in the country, whether hydro plants, thermo plants or mines. B92: You are an activist of G17 plus, did you have a representative in EPS Board during those critical years? Miroslav Cukovic, the former president of Kolubara Univerzal Board and member of G17 plus: That’s perhaps, today a question for Serbian Progressive party. B92: Why? Miroslav Cukovic, the former president of Kolubara Univerzal Board and member of G17 plus: Well, it’s because a member of EPS Board is Zorana Mihajlovic-Milanovic, current head of the resource committee for energy and she is often mentioned as a future Minister of Energy if Toma Nikolic comes to power. B92: But then she was a member of G17 plus, that is, a party activist of G17 plus. Did she inform anybody about what was going on in Kolubara? Miroslav Cukovic, the former president of Kolubara Univerzal Board and member of G17 plus: Well, not that I know of. According to our research, in the period of 2005-2009 Kolubara spent drastically more money for rental machinery than it was planned for. During these four years, around 106 million Euros were spent, while the planned budget was around 33 million. Hence, around 73 million Euros more were spent than it was planned. In this period, it was possible that a machinery operated 24 hours non-stop, the whole month, a driver operated a machinery for 96 hours, non-stop. In 2009, it was banned for machinery to work for 24 hours, a number of privately owned rental machinery was drastically reduced, while total costs were curbed for 60 %. However, the majority of major players still rent machinery to Kolubara. Those with political ties are of course, the most interesting. Among others, “Daka” company has stayed in the business, owned by the daughter in law of Dragan Markovic Palma, while “Palma” company, owned by Dalibor Markovic, Palma’s son, remains a direct coal buyer from Kolubara. According to our research, the companies most likely to stay in the business are connected one way or the other with Radosav Savatijevic Kene, who is a member of EPS Board, a working body suppose to control Kolubara endeavors. Radosav Savatijevic Kene was appointed at this position by Mirko Cvetkovic Government, at the suggestion of Socialist Party of Serbia-Party of United Pensioners of Serbia-United Serbia coalition. Those are the companies “Aras beton”, “Beoogrev” and “Beokran system”, the latter never being in formal association with Savatijevic. However, as it was reported in the first Insider episode, a document confirming an engagement of “Beokran system” was signed by Savatijevic. Another company that has stayed in the business is “Janko Stajcic” in which Mileta Radojevic, an activist of Social Party of Serbia and acting director of Public Transport Enterprise Belgrade, through a co-owned company “Jankos” has a share of the ownership. Nenad Zivojinovic, a member of the Lazarevac municipality council, is working for years with Kolubara, though his company “Neol gradnja”. Zivojinovic is the only owner of the company “Neol gradnja” and even today he is renting machinery to Kolubara. “Plan project” is another company which has stayed in the business, owned formally by Dejan Zivojinovic; the company is registered at the same address as “Nukleus” company, owned by Vladimir Jevtic called Jefta, a member of the Lazarevac municipality council and activist of New Serbia. Insider as well reported that those same people, most of the time, appear as direct coal buyers from Kolubara; they then sell coal to other state enterprises, institutions but also to citizens under much higher prices. Quantities of coal sold to a company are still decided by only one man, an assistant to Kolubara general director for commercial affairs. Since 2006, Radisav Rankovic, a long time member of Socialist party of Serbia, holds this position. We also reported that Belgrade heating plants, in the past 6 years, are supplied by 3 companies, all 3 associated with the current member of EPS Board, Radosav Savatijevic. Several people, most likely employees of Kolubara, filed a criminal charge due to misusages in Kolubara, in June 2008. Police is still investigating those assumptions. In the beginning of 2010, a criminal charge was filed by Anti Corruption council from Lazarevac, under assumptions that the infrastructure repair works Kolubara had paid for was not fully completed and that monitoring as agreed in the protocol, signed by Branko Boric and Dragan Tomic in 2006, was not conducted. Milivoje Matijasevic, president of Anti Corruption council from Lazarevac: People are becoming impatient and we hear comments every day “Hmm, nothing will come out of it”. You are aware that a strongly negative comment was addressed to your television. B92: Which commentary? Milivoje Matijasevic, president of Anti Corruption council from Lazarevac: Well, very displeasing comment: “Yes, they made Insider here, but someone paid not to report it”. B92: Do you know who makes comments like this one? Milivoje Matijasevic, president of Anti Corruption council from Lazarevac: No, but you and I both know there were stories like that behind the scenes. During the research and broadcasting of Insider serial about misusages in Kolubara, a repeated practice appeared again: instead of answering unpleasant journalist questions, the informants were trying to discredit the journalists involved. In this case, discrediting efforts included posters set up in the city of Lazarevac after each episode, probably by those same people mentioned in the negative context. The posters content after each episode became more serious. At first, the Lazarevac citizens were called to “turn off B92 and turn on the brains”, along with praises for the former Kolubara CEO, Dragan Tomic, whose directorship period coincides with the drastic increase of expenses for rental machinery. After the second episode, there were new posters at display with a short message: “No to B92”. After the third episode about misusages in Kolubara, the whole city was taped with posters in the form of obituary, informing about B92 death. The posters were taped near the police station, but it is still not discovered who printed and taped the whole Lazarevac with the obituaries for B92. At the same time, Ivica Dacic, minister of Police, publicly claims that the police from Lazarevc does not know who is behind this organized action against B92. The discrediting efforts also included accusation that Insider journalist could be bough-off, that Insider serves as a means of liquidation between political parties, and that we got information from certain political parties. All the information about Kolubara money spending reported in the serial “Scam of the Century”, Insider team has collected during the 5 months of research. The information are the official data from EPS, Kolubara but also other state institutions, that we gathered accessing FOIL. For each reported piece of information there is corresponding evidence. In the past few episodes, Insider revealed and proved that in the past 8 years Kolubara spent more than 130 million Euros for rental machinery even though it didn’t needed one. The inexplicable and unplanned expenses were possible because Kolubara paid for machinery hours even though machineries were not operating. Until today, no one is hold responsible for such endeavors of this state enterprise with a strategic value for Serbia. Kolubara coal is used to produce half of electric power for Serbia. All the Serbian governments, formed after 2001 until today were aware of the misusages in this enterprise, but no one took any action. Malversations and irrational money spending of any state enterprise are always paid after all by the citizens of Serbia, while certain individuals thrive at the expense of the state. In the first three episodes of the serial “Scam of the century” Insider has revealed, based on the example of mining basin Kolubara, only few ways of money pullouts from this state enterprise.

Scam of the century (part four)

The consequences of these kinds of misusages pose a real threat to the enterprise EPS, whose integral part Kolubara is, the most likely being that EPS will have to additionally incur debts for every future major investment. A major future investment for Kolubara is removal of the settlement Vreoci. Underneath Vreoci, according to the experts, there are enough coal supplies to last several decades. Kolubara coal is used to produce more than 50% of electric power in Serbia

If the settlement Vreoci does not get removed, Kolubara will soon be out of available coal mining fields, and without Kolubara coal, Serbia will have to import electric power under much higher prices. In the past episodes, Insider revealed that in the past 8 years Kolubara spent more than 130 million Euros for rental machinery, much more than it was expected. The costs of Vreoci removal, one of the largest investments coming for Kolubara- electric power supplies for all citizens depend on this- is estimated at 150 million Euros. However, authorized institutions still do not question a responsibility of those who by irresponsible behavior or abuse of power have made a potential damage to the whole state and its citizens.

Criminal charges filed against management of the state enterprises are left, for years, without the ultimate outcome. The police is suppose to investigate misusages, but, as many information point out, it is probable that the police itself was involved, in the previous years, in the entire mechanism of money pullouts from Kolubara. According to our best knowledge, Ministry of Internal Affairs conducted an internal control, but this report has remained a secret. It turned out, as Insider has revealed, that Kolubara paid machinery engagement even for purposes of Anti Terrorist Unit. According to Ministry of Internal Affairs official answer to Insider, the department of internal affairs conducted an investigation and determined irregularities but it is now known if someone got punished or not. Also, as Ministry of Internal Affairs specified, Dragan Tomić, the former Kolubara CEO was contacted by the captain of Gendarmerie, given that Kolubara machineries were also engaged in Security Ground Zone. The name of the captain remains undisclosed. A contract regarding a donation was signed with Kolubara in 2007 when the commander of Gendarmerie was Borivoje Tešić.

According to our information, during the period Kolubara had the greatest expenses regarding rental machinery, at the same time when all the costs drastically exceeded budget made for this purpose, Dragan Tomić, Kolubara CEO at the time, in a form of donation to Anti-Terrorist Unit of Serbian Ministry of Internal Affairs, assigned the usage- without compensation- of 8 machineries. Interestingly, Predrag Pavlović is an employee in that same Unit, employed by the former interior minister Dragan Jočić himself. Predrag’s brother, Nenad Pavlović called Neks, was at the same time a driver for Kolubara CEO, Dragan Tomić. “Kalča” company, owned by Predrag’s wife Marija, used to rent machinery to Kolubara for years, and at the same time, was a direct coal buyer. Insider obtained the report by the police department of internal affair, which cites irregularities regarding the donation. Eight heavy duty construction machineries built shooting ground in Lipovica during 2007 and 2008, while one machine stayed in the Unit for additional 6 months. The report stressed another irregularity, namely that Dragan Tomić had not specify which machinery were conceded, the time period of engagement, did Kolubara own these or not, were subcontractors engaged too, who provided drivers or who was supposed to pay for their work. It was not specified who was supposed to bear the costs of amortization and fuel. The internal control determined the machinery paid by Kolubara were supplied with fuel from Ministry of Internal Affairs gas stations, but there was an additional fuel involved, a donation by “Lukoil” company, 60.000 liters. From later decisions, it is evident that the value of building works on the shooting ground was 104.329.761 dinars, 5 machineries were from privately owned company “Iris”, while the ownership of the rest 3 was not determined. Machinery for Anti Terrorist Unit were conceded as a donation, but also Ministry of Internal Affairs declared, regarding the outcome of the investigation by the department for internal affair control, that machinery from Kolubara were also engaged in Ground Security Zone. This donation to Ministry of Internal Affairs was approved when Kolubara CEO was Dragan Tomić. Tomić at present heads a party coalition of Democratic Party of Serbia-New Serbia in the Belgrade Assembly. At the same time, he is a consultant to CEO for investments in EPS.

Dragan Tomić was Kolubara CEO from 2004 until the end of 2007. This is exactly the period when Kolubara expenses for rental machinery begun to increase. Privately owned machinery allegedly operated non-stop, every day in a month. While he was at the position of Kolubara CEO, Tomić even engaged a machine owned by “Kačer Turist”, a company where he was a co-owner, while a driver allegedly operated on that machine for 96 hours non-stop. These were all paid by Kolubara whose CEO was DraganTomić. During those years, more than 200 privately owned companies, mostly from Lazarevac, had their own machinery engaged in Kolubara. As well, Tomić’s sons are the owners of “Toša Mond”, a company founded in 2005; one of the business activities of the company is sales of Honda vehicles. A general representative of Honda in Serbia is “Delta” company owned by Miroslav Mišković, while “Toša Mond” is one out of five sales outlets within Serbia. Interestingly enough, the entrepreneurs with the greatest number of machinery rented to Kolubara while Tomić was the CEO of this state enterprise, used to buy Honda vehicles from “Toša Mond”. One of the major entrepreneurs is Vitomir Dimitrijević, an owner of “Devix” company. He acknowledges purchasing Honda vehicles from “Toša Mond”, but doesn’t see anything peculiar about it.

Vitomir Dimitrijević, “Devix” company, Lazarevac: The fact is, I own a company, I have a number of vehicles for my business needs, my company bough 3 cars.

B92: Honda?

Vitomir Dimitrijević, “Devix” company, Lazarevac: Yes, we bough…

B92: From Tomić?

Vitomir Dimitrijević, “Devix” company, Lazarevac: No, not from Tomić, but from the company. Tomić is a name, and a company is a company, it’s like I didn’t buy as Vita Dimitrijević but for the company, and the vehicles are still in use, for business purposes. I don’t see how’s important if it’s Honda or…

B92: Was there any agreement, or any requests that you have to purchase those cars from them, because, according to our sources, you are not the only one who bought those cars?

Vitomir Dimitrijević, “Devix” company, Lazarevac: It is very likely that I wasn’t the only buyer, but to be honest, perhaps that was a kind of moral obligation, to buy. I wouldn’t have bought if I really did not have a need, a moral obligation to buy Honda and not to buy, let’s say, Reno or Mercedes…etc.

B92: The entrepreneurs who made money in Kolubara, at one point, and then in the next, they are buying Honda cars from Tomić’s lot. Does this looks to you…It looks to me as a tit for tat?

Vitomir Dimitrijević, “Devix” company, Lazarevac: well, I’ve already said this was, in a way, a moral obligation, considering how long we’ve known each other and so forth. But, I don’t believe, it’s possible but I don’t believe in the stories about how many companies went through Kolubara, 280, 290, someone says 300…

B92: 230.

Vitomir Dimitrijević, “Devix” company, Lazarevac: He sold that many Honda cars since he opened a shop? I don’t believe so, maybe I’m wrong, but I don’t see that many Honda cars driving around Lazarevac.

Dragan Tomić refused an interview with insider, and hence he lost an opportunity to answer the question if Honda car purchasing from “Toša Mond” company, owned by his family members, had anything to do with engagement of machinery in Kolubara.

Also interesting appears that Kolubara, the state enterprise, engaged machinery in Belanovica, a local community in Ljig municipality, but it’s not known for which purpose and for how long the machinery operated, or in which time period. The former PM Vojislav Koštunica, and Nenad Pavlović called Neks, the driver of Dragan Tomić, both own houses in this local community numbering only 500 voters, while an actor Tihomir Arsić and Dragan Tomić co-owned a property called Zmajevac. According to media reports, they donated the property to Serbian Orthodox Church in 2008.

Ljig municipality president claims he didn’t always have an insight of Kolubara machinery engagement in Belanovica, even though this is the territory of his municipality. The municipality became involved in monitoring in 2007, but the machinery, paid by Kolubara, were already employed before that year.

Miroslav Maksimović, Ljig municipality president: Well, as I said so, those machinery were already operating in 2006.

B92: They were working in Belanovica, too?

Miroslav Maksimović, Ljig municipality president: Yes, yes. In 2006, they operated in Belanovica, mostly. As far as I know and understand, the machinery worked on uncategorized and some municipality roads, that we weren’t able to do ourselves, they mounded roads. I think t machinery worked in Belanovica.

B92: From Kolubara?

Miroslav Maksimović, Ljig municipality president: From Kolubara, yes.

B92: In Belanovica much more than in the rest of the Ljig municipality.

Miroslav Maksimović, Ljig municipality president: Well, OK, you want to lead me on to something so logical…

B92: I’m not leading you into anything, I’m just asking a question.

Miroslav Maksimović, Ljig municipality president: Hence, if someone has, in a part of his municipality, or in the municipality, people who are willing to help, I don’t see anything wrong in there.

Due to the engagement of machinery in the Ljig municipality, an anonymous criminal charge was filed against its president, Miroslav Maksimović and 18 more individuals. The prosecutor’s office, regarding this charge, has asked, from police, additional information. The police report to the prosecutor’s office from March 2010 stated, among other things, a number of irregularities, such as exaggerated working hours, a machine working allegedly on 4 different places at the same time, a man working at 3 different places at the same time. Insider has made inquiries about the status of this legal procedure, but we still have not received an answer from the prosecutor’s office in Valjevo.

Miroslav Maksimović, Ljig municipality president: I have given a statement in response to these anonymous accusations, I emphasize “anonymous” criminal charge.

B92: You gave a statement to the police?

Miroslav Maksimović, Ljig municipality president: Yes, yes, yes.

B92: Do you know the procedure status of the charge?

Miroslav Maksimović, Ljig municipality president: No, believe me, I don’t know. In this state every governing body should do its own duty, that’s not disputable, I’ve seen that criminal charge and the people called to make a statement regarding the issue, and those are mostly presidents of the local communities from the territory of Ljig municipality. Some appointed people, or who were assigned to represent Ljig municipality, that’s has nothing do with the truth, but I say, I haven’t inquired around.

In 2008, another criminal charge was filed against Dragan Tomić, his deputy Milan Obradovic and 10 more individuals, mostly the wealthier entrepreneurs in Lazarevac. The charge was filed by Kolubara workers, signed as “Coward”. Interestingly, District prosecutor’s office in Belgrade has submitted four times a request to the police for additional information regarding malversations in Kolubara. Only recently, the police have questioned, among others, Dragan Tomić, Vladan Jovičić, Vitomir Dimitrijević, and Radosav Savatijević Kene. Dragan Marković was not interrogated, although his name appears in the criminal charge filed by anonymous citizens in 2008, though at that time, he did not have at least formally, machinery engaged in Kolubara.

From 2004-2005 Kolubara rented privately owned machinery with no tender offer. In 2004 and 2005, several daughter companies separated from Kolubara. The daughter companies had a right to be engaged in business with Kolubara with no tender offer in the first four years of their independent operations. Then, the daughter companies engaged subcontractors, entrepreneurs also without tender. In 2009, Kolubara had to announce a tender offer, wherein a daughter company, “Kolubara Građevinac” won again.

Nebojša Ćeran, Kolubara CEO since 2009: Based on that contract, Kolubara managed to save additional couple of million euros per year. Hence, I think that average prices are around 10% below those we were talking about in august, when they were curbed and number of working hours reduced to 7 and a half. And if you ask me if the problem was solved this way, perhaps a small scale study should be done in order to see what Kolubara future is regarding machineries. I repeat, we have been in a very difficult economic situation without enough funds for investment works, but we managed in 2009, pardon me, in 2010 and 2011, to allocate 5-6 million euros for new machinery acquisition, in order to reduce the rentals furthermore.

“Građevinar”, the tender winning daughter company to Kolubara, however, engaged the same privately owned companies as subcontractors. Out of the major players, only the company “Devix”, which participated independently in the tender, has dropped out from the business. The owner, Vitomir Dimitrijević, appealed due to the irregularities of the tender. He still did not receive the final answer. He states that his appeal cites several serious allegations regarding the tender irregularities. Firstly, Kolubara did not define avail of works, secondly, the tender winner “Kolubara Građevinar” did not specify parts of the works assigned to subcontractors, thirdly, the subcontractors were not registered in accordance with the tender requirements, and lastly, some subcontractors did not provide a confirmation from the authorized tax authorities. Finally, the most serious allegation is that “Građevinar” did not provide proof of ownership regarding all machineries in its tender application.

Vitomir Dimitrijević, “Devix” company, Lazarevac: We initiated the administrative procedure, however, once it reaches those up in the position... This business continues, “Građevinar” is working, while all these deficiencies are documented. These are not just so stories, they are documented, these papers record false documents they’ve used to fulfill the right amount of machinery, along with false workers registrations.

Interestingly, in 2004 and 2005, 4 daughter companies seceded from Kolubara, while the machinery of the privately owned companies were engaged through the two of them, “Kolubara Građevinar” and “Kolubara Usluge”. Furthermore, in addition to one company, none of the daughter companies were privatized despite the Government of Serbia decision. Only the daughter company “Kolubara Universal” was privatized. The company Board president, since the firm foundation until the privatization, was Miroslav Čučković from G17 plus. He considers there are two main reasons why the rest of the daughter companies did not get privatized, so far. Lack of motivation to finish this complicated task is the first, while the other reason is that those daughter companies had a right to work with Kolubara without tender, an ideal situation for various malversations.

Miroslav Čuković, the former president of “Kolubara Univerzal” Board and party activist of G17 plus: I was, at one particular moment, when the privatization process took on, and when I realized “Kolubara Univerzal” will be a good story for privatization, there were some interests by certain people to form a consortium to purchase it, and I was informed by the director that those people hold a considerable financial power in Lazarevac. And I simply asked him: ”What are we going to do now, when we have to sell the company”? I could understand a sale of the company to the best world company, but not to those with money, regardless of their respective names. And I’ve seen, in essence, some people are extremely wealthy, willing to pay for instance, 10 million Euros for “Kolubara Univerzal”, because they’ve seen a chance to complete their business in Lazarevac. “Continental” won, a German company, it has infiltrated inside, and we have now what we have. If others had done it the same way, this country would be much better off, and we wouldn’t be having this show.

Vladan Jovičić, Kolubara CEO from 2007-2009: We often discuss and talk about societal change of the whole system, which obviously wasn’t made for this time period, or cannot change fast enough as was expected, 2000, all together with 2010, and this means we have over two thirds of the state in some kind of private, finished transitional phase, and where ever we have a connection among privately owned capital and the public one, it provokes suspicions in addition of not being properly legally regulated. Privatization of the companies separated from EPS was not carried out, costs exceeded estimated budgets, major investments are being late, necessary for smooth functioning of the large energy systems and the responsibility for such state of the affairs should be shared by all parties rotating in power since 2000.

One of the important and necessary investments ahead of Kolubara is a removal of the settlement Vreoci, a populated location in the Lazarevac municipality. According to the experts, underneath the settlement there is around 550 million tons of high quality coal, necessary for electricity production. This is an investment of the general state interest. Expansion of the largest coal field in the country, “Field D” was planned for 2008-2015. This job is being late despite the real danger of facing coal shortages for electric power production. The only scenario in this case would be to import electric power under much higher prices.

Nebojša Ćeran, Kolubara CEO: Investment works are late for a few years, 3 to 5, and this delay is very difficult and almost impossible to make up for. When I say “investment works are late” this means that in 2009, it was not known where coal would be dig out in 2 years, and 2 years in mining is a very near future, because you simply cannot open a new coal field in less than 3 or 4 years. Also, it was not known which machineries will be available or how to provide assets for all those. Firstly, I address here unsolved procedure about the largest expropriation in the history of the Republic of Serbia since building the “Đerdap”. This is claimed by the experts. So, it’s an expropriation of the populated place Vreoci.

Vladan Jovičić, Kolubara CEO from 2007-2009: In 2001 and 2002 a lot of people told me I’m such a fool because I want to remove Vreoci, these advocates told me there isn’t any coal there, and that’s about…500 million tons…At that time all those advocates, led by Kori Udovički, the minister, they even signed a statement about needlessness to remove Vreoci…and now, these same people are the most fervent advocates for the removal, now they understand it’s absolutely necessary to do so to provide stability to electro-energy system in Serbia, and this job is being very late.

Vreoci is an old mining settlement with 1180 households, around 3300 people. According to the estimations from Kolubara experts, underneath this settlement, there is around 500 million tons of high quality coal, without which thermo plants Nikola Tesla in Obrenovac, now producing half of electric power for Serbia, wont’ be able to operate.

Nebojša Ćeran, Kolubara CEO: The expropriation of Vreoci is a possibility of coal exploitation, miners say around 600 million tons of coal, or 500 million tons, as estimated by some other experts in the mining industry. In each case, it’s an income in billions Euros and for the Republic of Serbia, it’s tens of billions. In the next 40 years.

For a long time, the state is planning to remove Vreoci. However, only in 2007, during the government headed by Vojislav Koštunica, Kolubara, the Lazarevac municipality and local community Vreoci managed to agree on the removal conditions, noted in the document entitled “Basic program for Vreoci removal”. The current management of Kolubara and EPS considers this document to be a good foundation for an honest compensation to the population of Vreoci. Vladan Jovičić, Kolubara CEO from 2007-2009: At the time when I was Kolubara CEO, the government proclaimed a public interest over…and that is the end of 2008 already. In the beginning of 2009, I’ve started first rough censuses regulated by the procedure, by the so-called “blue book”, that is “Basic program for Vreoci removal” rectified by the government of Serbia, and in effect still today.

Nebojša Ćeran, Kolubara CEO: The expropriation of Vreoci is an issue of outmost importance for Kolubara. The expropriation of Vreoci means normal life, existence for Kolubara and I would dare to say, it conditions to a large extent normal life for the Republic of Serbia in the future. The expropriation of Vreoci fell through twice already, in 1997 and 2003. After that, negotiations were between the local community Vreoci, Lazarevac municipality, Kolubara and EPS and finally, the government approved one of the removal programs of the populated place Vreoci. This was in 2007. I wasn’t in Kolubara at that time, and hence I haven’t participated in this negotiation, but I think this program is reasonable, respects people from Vreoci, and treats them fair.

According to “Basic program for Vreoci removal”, Kolubara obligated to pay for all property, and to arrange the new settlement, the latter being partially done on the location Rasadnik in the urban area of Lazarevac. However, only few families have moved in so far.

Želljko Stojković, deputy of the president, local community Vreoci: According to our preliminary polls only 6 of our citizens agreed to move into that location... It’s a slippery ground, near the former military cemetery from the Kolubara battle, and considering these factors and many others, the community, in public discussions, has disassociate from this and stated this place does not fulfill the needs of our citizens, especially since infrastructure, such as schools, church, medical centre or cultural center could not be situated there too.

According to “Basic program for Vreoci removal” all households have to sign an agreement to move out, then Kolubara, based on a rough estimate, pays them 35 % in advance. The exact estimate is determined during the coal field expansion, and then the rest of the compensation for the whole property follows. Also, as stated in the document, when a person accepts the money in advance, it is considered that he/she also accepts a removal of the old cemetery in Vreoci.

So far, dredgers have reached the outskirts of Vreoci, and the next move should be to remove the old cemetery. New location for the cemetery has been assigned, with around 5000 grave places. Here too, Kolubara has invested enormous amounts of money, a few years ago a beautiful chapel was built but people from Vreoci still bury their dead at the old cemetery. They claim the state itself violates their rights and effective laws, and although they have first agreed with “Basic program for Vreoci removal”, now they claim it is a major deceit. Željko Stojković, deputy of the president, local community Vreoci: That money in advance is a deceit, regardless if a person took it or not, everybody is aware it’s a deceit. It serves only one purpose, that contract has only one purpose, to pull out an agreement on the cemetery exhumation without clear guarantees when, or if, an owner will be removed, since the essence is to dig up the cemetery. So, we’ve seen through this. So, from 2003, we’ve repeated that the cemetery, as a part of the village maybe, yes but by respecting law, but cemetery alone as a cemetery, to remove the Vreoci cemetery, while people and children to live squeezed in between 2 open pit mining in a ghetto, in an environment with major ecological problems- noise, vibrations, dust, heavy traffic and the rest of scourge. Certainly not.

The population inhabiting the surroundings of Kolubara coal fields is being removed for decades into new locations, but the removal of Vreoci has caused, so far, the largest problems. The key reason behind these problems is that the state did not have, for a long time, a clear strategy. Another problem is that certain individuals involved are trying to make money out of this affair and Kolubara. Most often, authorized institutions do not react.

It is not unusual to plant trees or fruit in order to increase the price for lots, or to build homes and hence increase the price of registered premises. The most serious problem appears to be illegal construction, flourishing in the past several years, with the only aim being- money making.

To prevent these and further misusages, in February 2007, a satellite image of the location detected the existing objects and situation on the ground, and the government decided that only property existing at the moment will be paid for.

Nebojša Ćeran, Kolubara CEO: We wanted to save honor, of Kolubara, the state and EPS, by not paying for illegal constructions or objects not having a status of additional objects. These objects are numerous, homes built at the edge of a coal filed, exclusively because of the expropriation.

B92: They were built for gain?

Nebojša Ćeran, Kolubara CEO: To gain in the expropriation process. And this is a public secret. I’ve seen some of these objects, and a lot of opponents to the expropriation have made illegal objects, not all of them, but some did. Others oppose the expropriation from emotional reasons, and I respect them, and understand. But there are some- the owners of the illegal objects who want to gain money out of it. We don’t have a right to pay for such objects, not even by the government decision, and we do not pay and we do not include such objects into the expropriation. But those people are our greatest opponents.

Authorized institutions know for some time that certain individuals misuse the fact that the government has to pay for property during the expropriation of Vreoci. Dragan Tomić, the former Kolubara CEO, a party activist of Democratic Party of Serbia, stated in the weekly journal NIN in 2006 (October 26, 2006): “…realization of the expropriation of Vreoci is impeded by an organized group made of several people, who pay for the lots intended for expropriation more than the state, with an intention to sell those same lots to Kolubara under much higher prices”.

Why the authorized local institutions have not prevented illegal constructions remained unclear, especially after rectification of “Basic program for Vreoci removal” in 2007. Long time president of the Lazarevac municipality, Branko Borić, another party activist from Democratic Party of Serbia, refused an interview with Insider.

Nebojša Ćeran, Kolubara CEO: The new law on planning and construction has given an opportunity to everybody, include those people, to apply for legalization, to enter the process, and they are applying. And frequently, I dare to say, they misuse the process, through pleas to delay.

Željko Stojković, deputy of the president, local community Vreoci: Certainly, there are objects treated as illegal. But, we cannot compare thresh barns made by peasant for hay or something, with some drastic examples of misusages, like- someone is building a cemetery no one needs for 20 000 people, and spends 20 million euros, or with some other misusages.

The estimation for the expropriation of Vreoci is around 150 million Euros, and that assets have to be found, otherwise, Serbia will be left without electric power. In “Basic program for Vreoci removal” these expenses are suppose to be paid by the state enterprise EPS and mining basin Kolubara. EPS CEO refused an interview with Insider, but he did answer some questions in a letter. It is clear from his answers that every irrational spending and exceeding of the planned budget, for instance for rental machinery, impacts directly the investment budget.

Vladan Jovičić, Kolubara CEO from 2007-2009: In the meantime, all possible political players have rotated at the positions of director, deputy, and manager in Kolubara, while the professionalism was not respected at all. Even today, unfortunately, Kolubara does not have a clear development strategy, nor does EPS. From 2005 to 2009 Kolubara drastically exceeded the planned budget for rental machinery. In these four years, Kolubara spent, solely for renting machinery, around 73 million Euros more than it was initially planned. In these same years, donation and sponsorship budgets also exceeded what was planned for. The largest provisions, in reality representing a kind of donation, went for machinery payment engaged in infrastructure repair works in several municipalities. It turned out, however, that the Protocol designed and signed in 2007 by Kolubara CEO Dragan Tomić and Branko Borić, the Lazarevac municipality president, was actually an alibi to bring in as much as possible machinery owned by private companies. Oddly enough, later on, the protocol was extended by annex to other municipalities as well, wherein Branko Borić signed the basic document on their behalf.

Miroslav Maksimović, Ljig municipality president: I’ve never seen that Protocol, so how could we monitor and control anything, when we haven’t seen it in the first place. You mentioned 2006 in regards to this protocol, in that year, Kolubara conducted control, exclusively. Machinery came, worked on the territory of Ljig municipality, they sent their own men who controlled and monitored those machineries.

Kolubara also paid for the works in Ub, Lajkovac, Aranđelovac and Barajevo municipalities.

Insider uses this opportunity to apologize to the current president of Barajevo municipality, Branka Savic; in the last episode it was reported she was a president of the municipality from 2006, however, she was appointed at the position in 2007 after the early elections. In 2006, when Kolubara machineries were engaged in Barajevo, municipality president was Rade Stefanović, a member of Democratic Party of Serbia.

In addition to the mentioned municipalities, Kolubara also paid machineries for works performed in Topola municipality, even though the municipality is not even near Kolbara coal fields, hence it cannot suffer the consequences of mining works.

Dragan Jovanović, Topola municipality president: We didn’t have any association with the municipality, but only with Kolubara, this is the 100 times I’m repeating this to you. So, we’ve addressed Kolubara Board, and they approved it, so 2 kilometers of the local road leading to Nikolje monastery were rebuilt. We had nothing to do with it- how many hours they’ve worked, because we were told- “when they are done, they will come back”. Their men signed, we, again, didn’t have anything to do with it. If someone was involved it was their men that signed, we had nothing to do with it.

It still remains undetermined why, Kolubara CEO Dragan Tomić and the president of Lazarevac municipality signed documents regarding engagement of machineries paid by Kolubara in other municipalities, in the first place, but also for purposes of Serbian Orthodox Church. Authorized institutions never questioned their responsibility, especially considering that Kolubara anyway pays compensation to municipalities and the state for coal exploitation, in addition to paying compensation due to coal field expansions.

Huge expenses for privately owned rental machineries, payments for machinery working hours even when machinery doesn’t operate, designing work protocol for several municipalities which drastically increased the number of machineries involved, larger allocations for donations and sponsorships than it was originally planned for, and many other totally inexplicable things have casued that Kolubara investment budget became thin. Because of these peculiar business endeavors, Kolubara will have to take assets from EPS in order to remove the settlement Vreoci. Sufficient coal quantities needed to supply electric power production in Serbia depend on this removal, and if EPS does not provide enough assets, the only way to pay for major but necessary investment will be another loan.

The expenses for privately owned rental machinery were the greatest in 2008, when Kolubara CEO was Vladan Jovičić, a member of Democratic Party of Serbia. However, the drastic rise in expenses started during the directorship of Dragan Tomić, also a member of Democratic Party of Serbia. According to the evidence we came to, it was at that particular time Kolubara paid for privately owned rental machinery wherein machineries operated allegedly for the whole month, without a minute of break.

Slobodan Đerić, Kolubara CEO from 2001-2004: If you look at the work list of that machinery, you could find 3,or 5, or 6 signatures, starting from coal field supervisor, some chief, director and so on. In a way, I do not blame those people, we have lost every trace of morality. Those people sign such things in a indifferent way, because someone said so, no one ever was called responsible for it. So, it’s difficult, to monitor such system, I told you so, already. A monitoring system would assume firstly how that particular machinery was engaged. I want to tell you, they were engaged… They were engaged who knows how and who engaged whose machinery. Kolubara management is of course responsible, if at all, and they will probably explain this was all necessary. Then, they find their own men, who say: “sign it, it’s nothing”. Well, it is nothing, when no one ever, due to impotence of the state, was hold responsible, there were charges, anonymous, or some other, criminal and so forth. In the past 10 years within EPS and 11 dependence companies doing business within EPS, the same people are being rotated from one position to another.

-the current EPS CEO, Dragan Marković, a party activist of Democratic Party, in the past 10 years was a director of one of EPS departments, he was executive EPS director and then an executive director of “Tent”.

- Aca Marković, the current EPS board president, a member of Socialist Party of Serbia, before this position he was a coordinator of EPS management, assistant to director for development and investments, a member of Council of Regulatory agency for Energy

- Petar Knežević, the current “Tent” director, a member of Democratic Party of Serbia, in the last 10 years he was a technical director of “Trent” but also a president of EPS Board at the time of the largest money extraction from Kolubara.

- Nebojša Ćeran, a member of Democratic Party, Kolubara CEO since July 2009, before he was acting director of “Tent” CEO, then assistant to general “Tent” director, from 2007 director of “Tent” directorate.

-The current Kostolac CEO, a part of dependence company within EPS, Dragan Jovanović, a member of Socialist party of Serbia; he was “Tent” CEO until January 2001, when he was replaced after October 5th changes. In 2004, he returns to EPS as a director of one of the departments, and then he rotates to become deputy to Kostolac CEO.

- Dragan Tomić, a member of Democratic Party of Serbia, current consultant to EPS CEO, he was Kolubara CEO, deputy of EPS CEO, and at the same time he was a president of Assembly of dependence company mining basin Kolubara.

Several people from this list are rotating from one position to another within EPS, and at some point, they were superiors to one another and vice versa. Hence a question: is there really a strong motivation and determination to question misusages and irrational expenses in full?

At the time when Kolubara expenses were the greatest, directors of this state enterprise were members of Democratic Party of Serbia. However, in 2008, at the peak of expenses, EPS Board included representatives of the all parties presently and still in power. They all had an insight into Kolubara endeavors, Kolubara being an integral part of EPS.

Miroslav Čuković, the former president of Kolubara Univerzal Board and member of G17 plus: The first instance is EPS Board, which used to rectify plans of all 11 dependence companies, then, of course, Ministry of Energy, PM…As far as control goes, it’s absolutely clear that EPS Board has the control, and ministry of Energy, they control all energy resources in the country, whether hydro plants, thermo plants or mines.

B92: You are an activist of G17 plus, did you have a representative in EPS Board during those critical years?

Miroslav Čukovic, the former president of Kolubara Univerzal Board and member of G17 plus: That’s perhaps, today a question for Serbian Progressive party.

B92: Why?

Miroslav Čukovic, the former president of Kolubara Univerzal Board and member of G17 plus: Well, it’s because a member of EPS Board is Zorana Mihajlović-Milanović, current head of the resource committee for energy and she is often mentioned as a future Minister of Energy if Toma Nikolić comes to power.

B92: But then she was a member of G17 plus, that is, a party activist of G17 plus. Did she inform anybody about what was going on in Kolubara?

Miroslav Čukovic, the former president of Kolubara Univerzal Board and member of G17 plus: Well, not that I know of.

According to our research, in the period of 2005-2009 Kolubara spent drastically more money for rental machinery than it was planned for.

During these four years, around 106 million Euros were spent, while the planned budget was around 33 million. Hence, around 73 million Euros more were spent than it was planned. In this period, it was possible that a machinery operated 24 hours non-stop, the whole month, a driver operated a machinery for 96 hours, non-stop. In 2009, it was banned for machinery to work for 24 hours, a number of privately owned rental machinery was drastically reduced, while total costs were curbed for 60 %.

However, the majority of major players still rent machinery to Kolubara. Those with political ties are of course, the most interesting.

Among others, “Daka” company has stayed in the business, owned by the daughter in law of Dragan Marković Palma, while “Palma” company, owned by Dalibor Marković, Palma’s son, remains a direct coal buyer from Kolubara.

According to our research, the companies most likely to stay in the business are connected one way or the other with Radosav Savatijević Kene, who is a member of EPS Board, a working body suppose to control Kolubara endeavors. Radosav Savatijević Kene was appointed at this position by Mirko Cvetković Government, at the suggestion of Socialist Party of Serbia-Party of United Pensioners of Serbia-United Serbia coalition. Those are the companies “Aras beton”, “Beoogrev” and “Beokran system”, the latter never being in formal association with Savatijević. However, as it was reported in the first Insider episode, a document confirming an engagement of “Beokran system” was signed by Savatijević.

Another company that has stayed in the business is “Janko Stajčić” in which Mileta Radojević, an activist of Social Party of Serbia and acting director of Public Transport Enterprise Belgrade, through a co-owned company “Jankos” has a share of the ownership.

Nenad Živojinović, a member of the Lazarevac municipality council, is working for years with Kolubara, though his company “Neol gradnja”. Živojinović is the only owner of the company “Neol gradnja” and even today he is renting machinery to Kolubara.

“Plan project” is another company which has stayed in the business, owned formally by Dejan Živojinović; the company is registered at the same address as “Nukleus” company, owned by Vladimir Jevtić called Jefta, a member of the Lazarevac municipality council and activist of New Serbia.

Insider as well reported that those same people, most of the time, appear as direct coal buyers from Kolubara; they then sell coal to other state enterprises, institutions but also to citizens under much higher prices. Quantities of coal sold to a company are still decided by only one man, an assistant to Kolubara general director for commercial affairs. Since 2006, Radisav Ranković, a long time member of Socialist party of Serbia, holds this position. We also reported that Belgrade heating plants, in the past 6 years, are supplied by 3 companies, all 3 associated with the current member of EPS Board, Radosav Savatijević.

Several people, most likely employees of Kolubara, filed a criminal charge due to misusages in Kolubara, in June 2008. Police is still investigating those assumptions. In the beginning of 2010, a criminal charge was filed by Anti Corruption council from Lazarevac, under assumptions that the infrastructure repair works Kolubara had paid for was not fully completed and that monitoring as agreed in the protocol, signed by Branko Borić and Dragan Tomić in 2006, was not conducted.

Milivoje Matijašević, president of Anti Corruption council from Lazarevac: People are becoming impatient and we hear comments every day “Hmm, nothing will come out of it”. You are aware that a strongly negative comment was addressed to your television.

B92: Which commentary?

Milivoje Matijašević, president of Anti Corruption council from Lazarevac: Well, very displeasing comment: “Yes, they made Insider here, but someone paid not to report it”.

B92: Do you know who makes comments like this one?

Milivoje Matijašević, president of Anti Corruption council from Lazarevac: No, but you and I both know there were stories like that behind the scenes.

During the research and broadcasting of Insider serial about misusages in Kolubara, a repeated practice appeared again: instead of answering unpleasant journalist questions, the informants were trying to discredit the journalists involved. In this case, discrediting efforts included posters set up in the city of Lazarevac after each episode, probably by those same people mentioned in the negative context. The posters content after each episode became more serious. At first, the Lazarevac citizens were called to “turn off B92 and turn on the brains”, along with praises for the former Kolubara CEO, Dragan Tomić, whose directorship period coincides with the drastic increase of expenses for rental machinery. After the second episode, there were new posters at display with a short message: “No to B92”. After the third episode about misusages in Kolubara, the whole city was taped with posters in the form of obituary, informing about B92 death. The posters were taped near the police station, but it is still not discovered who printed and taped the whole Lazarevac with the obituaries for B92. At the same time, Ivica Dačić, minister of Police, publicly claims that the police from Lazarevc does not know who is behind this organized action against B92.

The discrediting efforts also included accusation that Insider journalist could be bough-off, that Insider serves as a means of liquidation between political parties, and that we got information from certain political parties.

All the information about Kolubara money spending reported in the serial “Scam of the Century”, Insider team has collected during the 5 months of research. The information are the official data from EPS, Kolubara but also other state institutions, that we gathered accessing FOIL. For each reported piece of information there is corresponding evidence.

In the past few episodes, Insider revealed and proved that in the past 8 years Kolubara spent more than 130 million Euros for rental machinery even though it didn’t needed one. The inexplicable and unplanned expenses were possible because Kolubara paid for machinery hours even though machineries were not operating. Until today, no one is hold responsible for such endeavors of this state enterprise with a strategic value for Serbia. Kolubara coal is used to produce half of electric power for Serbia. All the Serbian governments, formed after 2001 until today were aware of the misusages in this enterprise, but no one took any action.