Two documents—a memorandum and a subcontract agreement between the Chinese company China Civil Engineering Construction Corporation (CCECC) and Starting, a firm based in Batajnica owned by Ljiljana Tripković and Nikola Trivić, who is also the company director—shed new light on the case of the railway station canopy in Novi Sad, which collapsed on November 1, killing 15 people.
The indictment, filed by the Higher Public Prosecutor’s Office in Novi Sad on December 30, does not include potential corruption charges. Instead, former Minister of Construction, Transport, and Infrastructure Goran Vesić, former director of the Serbian Railways Infrastructure Company Nebojša Šurlan, his successor Jelena Tanasković, and ten other accused individuals are charged with committing a criminal offense against public safety.
From the memorandum and the subcontract between CCECC and Starting—published on the website of the Higher Public Prosecutor’s Office on January 1 and first reported by Forbes Serbia—it is clear that, according to the initial document from November 2021, the domestic subcontractor was set to receive €1,922,051.60 for its share of the reconstruction project. However, just over six months later, in July 2022, the subcontract raised this sum by a staggering 2.66 times to €5,116,401.15. This increase occurred despite the fact that the initial memorandum explicitly stated that the agreed price of around €1.9 million “includes all obligations of the subcontractor under this agreement.”
For this reason, construction logs are eagerly awaited, as they will reveal the final costs of each task and how these deviate from preliminary estimates and prices defined in individual contracts.
Clear indications of economic crime
For Jasmina Paunović, prosecutor at the Higher Public Prosecutor’s Office in Belgrade, this is yet another indication that, regarding criminal liability for the canopy collapse, this case exceeds the jurisdiction of the Higher Public Prosecutor’s Office in Novi Sad. Speaking to Radar, she stated that this involves economic crime. This is especially the case since the large unlawful gain, obtained by circumventing the Public Procurement Law, clearly caused significant financial harm to the Republic of Serbia. All construction costs were borne by the state through the public enterprise Serbian Railways Infrastructure and the Ministry of Construction, Transport, and Infrastructure.
While noting that the CCECC-Starting memorandum from November 2021 must have been based on a prior construction (adaptation) contract concluded between the project client—the financier (the Serbian Government and Serbian Railways Infrastructure)—and the contractor (the Chinese consortium), prosecutor Paunović emphasized that this foundational contract, which specifies the rights and obligations of the Chinese firm, has not yet been published. She further pointed out the lack of clarity regarding how Starting was engaged as a subcontractor based on “friendly consultations.”
“This selection criterion is not recognized by any law of the Republic of Serbia. The use of such a term in such a significant contract, which could even be considered intergovernmental, leads to the conclusion that Starting was chosen directly within the contract between the project client and the contractor. That remains a possibility, as how else could the Chinese company, as the contractor, have known about one specific domestic construction firm among thousands and decided to engage it? Either the subcontractor was identified through some other means, but certainly not—at least this is not stated—through a tender process,” Paunović asserted.
Furthermore, as the Radar interlocutor explains, Starting undertook an obligation to CCECC to engage reliable, professional, and responsible subcontractors, for whom it first had to obtain written approval from the Chinese contractor. Starting was also required to submit a bi-weekly report detailing completed work, which CCECC would review and then pay for the verified work within 45 days.
“In my humble opinion, Starting bears significant responsibility for the reconstruction of the station building and its canopy—not only because of its selection of subcontractors, who are also accountable for their roles, but also because of its obligations to the Chinese firm that engaged them. From the published documents, it is evident that this was to the detriment of Serbian citizens, as the November 2021 agreement and the July 2022 subcontract differ only in the estimated value of works, which increased from €1.9 million to €5.1 million in just six months,” emphasises Jasmina Paunović.
She further stresses that, alongside the contracts, invoices should have been issued for all completed works in accordance with the mandatory submission of lists of executed works, as well as interim and final statements, to justify every dinar paid out. Finally, based on the published data, it remains unclear whether there were any annexes to the primary contract that might justify the increased costs, Paunović concludes.
How the state paid €150 for something worth €20
Geological engineer Zoran Đajić, who was engaged for professional oversight of all stone-cutting works during the reconstruction, extension, and adaptation of the railway station—initially as a consultant for Starting until his contract was terminated on 19 August 2022—also believes there are grounds for expanding the investigation in another direction, regarding potential corruption. His contract was terminated because Starting insisted he could oversee their works only when they invited him. Part of the explanation for this behaviour may lie in claims by some workers on the site, who told Đajić that Starting was allegedly backed by former President Tomislav Nikolić.
“You only need to follow the money trail to see where it ended up. After all, the CIP Transport Institute estimated the cost of all works for the reconstruction and adaptation of the station underpass at 31.21 million dinars without VAT, or 37.45 million dinars with VAT, yet the final costs were several times higher. Let me provide just one example to illustrate how this happened. According to CIP’s calculation, installing one linear metre of marble should have cost about €20, but Deko Tim, one of CCECC’s subcontractors responsible for all stone-cutting works, invoiced €150 per metre,” Đajić explains.
A particular problem, he notes, is that the Chinese contractors actually had no incentive for domestic subcontractors—engaged without a tender process—to offer lower prices, as the Serbian taxpayers were footing the bill. Since the Chinese company simply adds a percentage markup to its invoice sent to the Ministry of Construction, it is more profitable for them to earn a 12% or 20% margin on two million euros rather than one million euros.
“This is the crux of the issue. I’ve been talking about this the whole time, but it seems no one is listening. This investigation won’t be complete if it doesn’t examine the potential corruption angle. Especially since officials publicly announced that the reconstruction cost €16 million, while the value estimated by CIP’s architectural project was supposed to be just over €3 million. Even if the actual cost was double the planned amount, or €6 million, where did the remaining €10 million go? And when will the organised crime prosecutor’s office step in?” Đajić asks.
The essence of this scheme is that the domestic subcontractor purchases marble at €58 per square metre, with installation costs that should not exceed €30. However, instead of charging no more than €100 per square metre, Starting sent invoices to the Chinese firm CR11BG, also a subcontractor, for €260 per square metre.
“I don’t have those documents with me, but I saw them with my own eyes. I also heard from other participants in the project that CR11BG passed invoices to another Chinese firm, China Communication Construction Company (CCCC), with a 12% markup, and CCCC, in turn, passed them to the next link in the chain, China Railway International Corporation (CRIC), with an additional 20% increase. CRIC then further inflated the price by 50 to 100% and sent the inflated invoices to Serbian Railways Infrastructure and the Ministry of Construction for payment. I don’t have material evidence for this, but the prosecutor’s office should definitely examine the paid invoices to determine whether and how the initially projected costs for certain works ended up being paid by the state at five, eight, or even ten times the original amount. And if that’s not economic crime, then what is?” Đajić asks, noting that someone had to sign all those invoices and payment orders.
Is Deko Tim part of a larger team?
It is also noteworthy that all stonework on the Novi Sad Railway Station, from start to finish, was handled by Deko Tim from Beška, a company that had virtually no prior experience in such projects. The firm was founded in August 2020 by Nenad Ignjatović for wholesale and retail trade, later expanding its business to include carpet cleaning. In 2022, the company was registered for “installation of floor and wall coverings.” Shortly afterward, Deko Tim was engaged on the state project, initially as one of Starting’s subcontractors. Later, as the company grew stronger, it secured a direct contract with CCECC, which supplied the stone, while Deko Tim handled its installation.
During this period, the company’s fortunes skyrocketed. Between 2021 and 2023, Deko Tim’s total revenue increased by 76.6 times, from 2.7 million dinars to 209.7 million dinars (€1.8 million). This growth was primarily driven by their involvement in renovating the railway station underpass, where Deko Tim charged €70 to €90 per linear metre for marble installation, despite the real cost being, according to Đajić, between €20 and €30.
Meanwhile, on 31 December, the Department of Civil Engineering and Geodesy at the Faculty of Technical Sciences in Novi Sad determined through an expert report that the reconstructed canopy was 23.11 tonnes heavier than before. This was something the Radar interlocutor had pointed out from the very beginning, noting that, according to CIP’s project, the plan was only to replace damaged panels on the canopy and remove all layers down to the concrete on the upper surface, applying a 1.5-millimetre waterproofing layer. Instead, the canopy was further burdened, weighing 199 tonnes at the time of its collapse, with the cables unable to bear the load.
“And this brings us to the key question: who carried out the concrete work on the canopy? That is something people from Deko Tim and Starting must certainly know,” says Đajić.
(Radar, 09.01.2025)
https://radar.nova.rs/ekonomija/korupcija-ugradnja-nadstresnica/