The largest and most expensive projects in Serbia are carried out by foreign companies and are financed by the banks from the countries from which these companies come from, on the basis of international agreements.
The Serbian government has borrowed billions of euros for the construction of roads, railways and other infrastructures, with no tenders being held to choose the best contractor and without anyone having done the market research to determine the price of the works for which the Serbian authorities obtained loans.
This casts a big shadow over Serbia being a big construction site, as taxpayers will have to pay these loans, which amount to nearly € 5 billion for the ten largest projects alone.
For just eight stretches of motorways or expressways, of a total length of about 330 kilometres, Serbia has requested a loan of 2.42 billion euro.
In terms of railway projects, primarily the construction of a high-speed railway from Belgrade to Budapest, two sections have been agreed for now for a total value of 930 million dollars.
The modernization of the four-track railway from Belgrade to Stara Pazova, on which, when finished, trains will be able to reach the speed of up to 200km an hour, is entrusted to the Chinese companies CRIC and CCCC and financed by the Chinese Exim Bank, while the Russian state company RZD International will modernize the 40.4 kilometres long Stara Pazova-Novi Sad track, which will cost a total of 580 million dollars. This amount will come from a Russian loan.
The Serbian President also announced that he will entrust the Chinese with the construction of a four-track railway from Novi Sad to the border with Hungary, worth 1.2 billion dollars, and the money for that will come from a loan granted by China’s Exim Bank.
Several Serbian companies are also working on railways. Serbia’s Energoprojekt and the French company, Colas are together constructing a passage near Zemun worth about 50 million euro, while the reconstruction of the Jajinci – Mala Krsna track, which costs around 30 million euro, will be financed by a loan from the EBRD.
Serbia has entered into agreements with foreign companies worth about 5 billion euro. It is interesting that foreign companies are also hired on jobs financed by the state treasury.
Work is also underway on the municipal infrastructures in 14 cities, from the water purification plants to the sewage and water supply networks, The German development bank, KfW, has provided financing for these projects and it is mainly Serbian companies which are engaged in these projects, with the exception of three projects involving the Austrian Strabag, the German Siemens and the French Veolia.
Thus, the Turkish company, Tasyapi is engaged to implement a large housing project (3,000 apartments) for Serbian security forces, in Vranje and Niš. This project is financed from the state budget with about 100 million euro.
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Some local construction companies are also engaged in residential construction projects. For instance, Millennium Group, which was accused years ago of the demolition of the houses in the Savamala neighbourhood, is engaged in large state projects such as gas system installation and Belgrade Waterfront.
The former Minister of Construction and a retired professor, Dragoslav Šumarac, argues that the government’s attitude towards Serbian companies has destroyed the Serbian infrastructure and construction sector as these companies are no longer considered subcontractors in their own country but are treated like ‘a third wheel’.
He adds that such a construction policy also destroys the local workforce, which in a foreign company, regardless of the position occupied, are tantamount to slaves.
Work is also underway on the municipal infrastructures in 14 cities, from the purification plants to the sewage and water supply networks, accredited by the German development bank “KFW”; the work is mainly entrusted to Serbian companies, with the exception of three projects with other consortia involving the Austrian “Strabag”, the German “Siemens” and the French “Veolia”.
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