It would take over a thousand years to get return on investment in Belgrade Waterfront

Although the Serbian government has spent hundreds of millions of euros on land and construction of Belgrade Waterfront, so far the return on this investment for the state has been only 6 million euros, i.e. three million for each of the last two years.

This is a result of a project that the Serbian authorities have been praising for years. It cost an estimated 3.5 billion euros to build and it was supposed to not only generate financial gain for the Serbian budget but also promote the Serbian economy, especially the construction sector, and create a lot of new jobs.

The then Minister of Construction, Transport and Infrastructure, Zorana Mihajlović, was the one to sign the contract with the Arab partner on behalf of the Serbian government. Today, eight years later, Zorana Mihajlović is no longer a government minister and a member of the ruling party (SNS) and has failed to provide an explanation regarding the profitability of the Belgrade Waterfront project.

Milan Ćulibrk, editor-in-chief of NIN weekly, says that if we divide the aforementioned 6 million euros among Serbian citizens, each of them would receive just over 1 euro.

“Does that justify this “project of national importance”, especially adopted legislation and whatnot?” Ćulibrk asks.

He reminds that the Serbian authorities gave away land in the Belgrade neighbourhood of Savamala (where Belgrade Waterfront was built) worth several hundred million euros, bought the property owned by the Eurosalon Company in the same location for 16 million euros of the state budget money and then donated it to the Belgrade Waterfront project.

According to NIN, in 2018 and 2019, Belgrade Waterfront ended up with a surplus of 2.45 and 1.84 billion dinars respectively, but that money did not end up in the Serbian state budget, because no decision was made on the distribution of profits. In 2020, Belgrade Waterfront reported a net loss of 327 million dinars, while the losses in 2016 and 2017 totalled 2.4 billion dinars.

“The state is a minority partner (in this project) and it is not consulted on anything. What the other project partner does is his business, but I hope that one day we will find out who the real owners of Belgrade Waterfront really are,” says Ćulibrk and reminds that to accommodate the project, a subway route was also changed and moved to Savamala.

The Belgrade Waterfront Company has confirmed that it will pay dividends worth 10 million euros from the profit generated in 2022 (56.4 million euros). In 2021, the net profit was 29.5 million euros, and the dividends amounted to 10 million euros of which only a third was paid into the state budget.

While direct profit amounted to only 6 million euros, the story was much different when the project was in its infancy.

In 2012, just before the Belgrade election, the Serbian president said that “according to our calculations, at least 200,000 people would be hired to work on the project, and then receive permanent employment”.

“Belgrade Waterfront is our most important development project, which will generate hundreds of millions of euros for the city of Belgrade,” Vučić claimed in 2012.

Three years ago, the president was particularly proud of the fact that 1,700 people were working on this project.

According to the information published on the official website of the Serbian government, on the day the relevant contract was signed, the Arab investor had 68 percent ownership of Belgrade Waterfront and the Serbian government 32 percent.

In addition, special regulation was swiftly adopted in the Serbian Parliament to give Belgrade Waterfront a special status. The project value is estimated at 3.5 billion euros and it would take three decades to complete it.

The Belgrade Waterfront project entails the construction of more than one million (later increased to two) square metres of residential space, about 750,000 square metres of business and commercial space, over 62,000 square metres of public facilities and it will span 177 hectares. The project also includes the construction of kindergartens, schools, cultural, social and healthcare institutions and 242,000 square metres of green areas. The plan was to employ 13,000 people to work on the project and for 17,000 residents to live in Belgrade Waterfront.

(N1, 19.05.2023)

This post is also available in: Italiano

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