Government donated the RS Oil Industry incurring additional damages of half a billion KM

Transparency International Bosnia and Herzegovina (TI BiH) published today its analysis of the Agreement on privatisation of the Oil sector or the Republika Srpska (NIRS).

The detailed analysis demonstrates that in case of the NIRS’ sale no positive privatisation effects exist, while its negative balance will have to be covered by the citizens and the Budget of RS. Having examined the available documentation, a conservative calculation verified the outflow of funds and capital from RS and BiH only following that single privatisation arrangement in the total amount of KM 985,595,521.19 or almost a billion convertible marks, besides the entire system of the Oil industry of RS being given away as a gift! This amount includes only the direct costs – initial liabilities assumed by the RS Government, but also a score of other commitments undertaken when the first Annex to the basic privatisation Agreement was signed. The examples include deliberate damages or those resulting from poor estimations in the privatisation process, among which the most obvious is the extortionate loans the buyer, Russian Nyeftegazinkor, extended to the Oil Refinery AD Bosanski Brod, i.e. to itself as the new owner, but also an underestimated value of the business, as well as damages to the market capitalisation of the enterprise due to the non-transparent privatisation of NIRS.

On the other side, all that has been documented is the Budget revenue of KM 215,942,995 from the Russian partners as well as the loan to the Oil Refinery in the amount of KM 220,128,666.50, i.e. the total of KM 436,053,661.50.

Transparency International BiH warns that the amount of half a billion KM may not be final, given that the privatisation arrangement results in the multiple indirect costs for the Republika Srpska and the broader region, which include: creation of new employment, increase in the gross domestic product and employees’ earnings, social welfare of the lower strata of the population, environmental protection, non-market costs for the end user of the NIRS products and many others

Insight into the full extent of the damages depend on the readiness of the RS Government to publish the information that has persistently been hiding away from the public, as well as from the law enforcement agencies and judiciary to sanction any potential criminal activities.

ANALIZA UGOVORA O PRIVATIZACIJI NAFTNE INDUSTRIJE REPUBLIKE SRPSKE

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