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Working for the state and using the profit to buy state-owned real estate

21. jan 2021. English
5 min čitanja

Due to the good connections with the ruling party, the favored winners of tenders are filling their pockets with millions from the state budget, which are later used for purchase of state-owned property, as exemplified by the sale of military facilities at the end of last year.

A parcel covering more than two hectares and containing facilities at the prestigious location of Tatarsko brdo in Sremska Kamenica has been purchased by Extra Invest, LLC from Vrbas, a subsidiary of Extra Auto Transport, a company that has for the past several years been the favored contractor for the provision of services related to snow plowing and repairs of farm roads, local roads and landfill remediation. For the purpose of purchasing this military complex, a legal entity was established five days after the Republic Directorate for the Property of the Republic of Serbia advertised its sale.

The two seemingly unconnected private companies, known for good connections with the ruling party, shared the ownership of the newly established company and the purchased military complex only several days after the purchase.

Prestigious location – lower price

The “Mišeluk – Gornja Kamenica” military complex, covering more than two hectares and boasting two facilities of over 634 square meters, was auctioned by the Republic Directorate for the Property of the Republic of Serbia at a lowered starting price of over EUR 1.2 million. The advertisement announcing the sale of the real estate no longer needed by the Serbian Armed Forces was published on September 4, 2020. Five days later, Extra Auto Transport established Extra Invest, as evidenced by the records of the Serbian Business Registers Agency (BRA).

Three months later, on December 4, the national Real Estate and Utility Cadaster received a request to change the information regarding the owner of parcel 4133 and register Extra Invest, LLC as the new owner, as evidenced by the documents of the Republic Geodetic Authority.

In the last days of 2020, Extra Invest changed its name into Tatarsko brdo residence, LLC in the BRA records. The new company, whose core activity is “purchase and selling of real estate”, moved its registered address to one in Novi Sad and split the ownership between Extra Auto Transport from Vrbas and the Bobar Beška company from Novi Sad. A small part of the facility within the military complex was taken over by MPP Eat, yet another subsidiary of Extra Auto Transport from Vrbas.

Bobar Beška – member of the dream-team at tenders organized by Srbijagas and main sponsor of Vojvodina FC

Over the past several years, the Bobar Beška company has been purchasing parcels and building residential complexes at several prestigious locations in Vojvodina. The company came under the spotlight because of its lucrative arrangements financed by the state and controversial connections with the authorities. In an analysis published by regarding the interest in private donations made to the Ministry of Interior, Bobar Beška was mentioned as one of five companies that had been making profit for five years from the construction of gas pipeline network all over Serbia, without any tendering procedures, supported by Srbijagas. The negotiated arrangements are worth more than EUR 200 million, according to the analysis. This company from Novi Sad is also one of the biggest donors to Vojvodina FC, whose general director is none other than Dušan Bajatović, also the general director of Srbijagas public company. Since 2019, Bobar Beška has also been the owner of a chain of gas stations, whose opening ceremonies were attended by the leaders of Novi Sad and high officials of the Serbian Progressive Party and the Socialist Party of Serbia.

It took Bobar Beška only four public procurements in 2019 to secure deals worth more than RSD 850 million (excluding VAT). The most lucrative deal is related to the reconstruction and refurbishment of the Community Health Center, worth almost RSD 689 million, while the company was also awarded deals related to building a parking lot,supply of fuel and expansion of the gas-supply network.

Bobar Beška increased its income from EUR 3 million in 2015 to EUR 22.8 million in 2019.

Extra Auto Transport – competitor and partner of the companies owned by former leader of SPP in Kula

Extra Auto Transport earned more than RSD 198 million in 2020 alone through public procurements.

By providing the services of renting equipment, maintenance and reparation of local and farm roads, as well those related to winter services, Extra Auto Transport gained an income of RSD 734 million as an individual bidder, according to the VOICE’s database of public procurements in 10 municipalities in Vojvodina between 2016 and 2020.

Asphalt base in Kula municipality

Much more lucrative deals were granted to this company from Vrbas when it was part of bidding consortia, securing deals for various services, from the maintenance of canal network banks and hydraulic engineering to the construction of parking lots and farm roads in Subotica, Zrenjanin, Kula, Vrbas, Novi Sad and Žabalj.

The total value of those deals arranged between 2016 and 2020 exceeds RSD 979 million.The total value of all public procurement deals awarded to this company from Vrbas in the past four years exceeds RSD 1.7 billion.

Furthermore, this company has appeared on several occasions at tenders in the municipality of Kula as a competitor with Molimentum, a company owned by Zoran Videkanjić, brother of the then-president of the municipality of Kula, Perica Videkanjić, which was being awarded exclusive deals related to landfill management and provision of winter services, worth millions, as reported by VOICE as early as in 2016. At the end of 2017, the Anti-Corruption Agency requested the removal of Videkanjić from the position of the president of the municipality due to conflict of interest, but the ruling majority opposedthis request. Still, on May 30, 2018, Videkanjić resigned for personal reasons.

Following the resignation of the SPP leader in Kula, the relations between his brother’s company and the former “competitor” at tenders, Extra Auto Transport, became friendly. An asphalt plant is being built, without necessary permits and approvals, on the premises of the IGM “Telečka” brickworks, which was bought by the family of the SPP leader in Kula during his term of office. As VOICEhas already reported, the Videkanjić brothers sold the parcel in question to the company from Vrbas and the two companies submitted a joint-bid at a tender organized in Subotica related to road maintenance in the winter, worth RSD 50 million.

Ranka Ivanoska (VOICE)

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This research was conducted with support from the Resilience Fund of the Global Initiative Against Transnational Organized Crime. All opinions or attitudes expressed in the research are those of VOICE and IJAV and do not necessarily reflect the opinions or attitudes of the Global Initiative.