When a state pays for Dodik’s son-in-law fittings

Study conducted by Transparency International in BiH and CAPITAL.ba

• The company owned by the son-in-law of the Republic of Srpska President is the best business partner of utility companies in RS;
• Tens of millions of public funds have been allocated to “MG Mind” and “Prointer” for their services;
• Transparency International in Bosnia and Herzegovina and the portal CAPITAL.ba have analyzed hundreds of procurement contracts concluded by the public enterprises in RS and their connections to private companies.

BANJALUKA – Company “Interkont – Komerc” earned BAM 1.170.210 in 2015 supplying material for water works in Istocno Sarajevo, Doboj, Gradiska, Prijedor, Trebinje and Banja Luka. General Manager of the company is Spasoja Zeljkovic, husband of the sister of the president of SNSD party and the President of the Republic of Srpska Milorad Dodik. Contracts that his company signed with the public enterprises in the whole Republic of Srpska, and which can be found in data base of Transparency International in BiH, suggest that there are strong political connections supporting these businesses.
The research performed by the business portal CAPITAL.ba and Transparency International in Bosnia and Herzegovina on the expenditures made by the public enterprises, has showed that Zeljkovic’s company is connected to company “SB Invest” established in 2008.
The share capital was BAM 5.000. “SB Invest” was established by the companies “TN invest anstalt” from Lichtenstein which invested BAM 3.000 and Zeljkovic’s company “Interkont – komerc” registered in Laktasi with a stake of BAM 2.000.
“Interkont – Komerc” concluded three contracts with the Water Supply and Sewerage Istocno Sarajevo in 2015, related to the procurement of “fittings, galvanized pipe fittings, couplings, repair clamps and street caps”.
The total value of the contracts was BAM 236.968. Seven contracts were also concluded with Doboj Water Supply (BAM 153.674), four contracts with Prijedor Water Supply (BAM 152.992), and seven contracts with Trebinje Water Supply (BAM 122.245).
Most contracts were concluded with Banja Luka Water Supply – twelve of them, worth BAM 194.650. Only two contracts were concluded with Water Supply Gradiska but they are by far the most valuable.
The purchase of fittings and valves was paid BAM 201.890, while for the purchase of water-gages BAM 107.782 were allocated.
In 2016 Zeljkovic’s company concluded 24 contracts with the water supply and utility companies in RS
The overall value of those contracts was BAM 1.466.844. Six of those contracts were concluded with “Komunalac” from Derventa, five contracts with Banja Luka Water Supply, three contracts with Water Supply Doboj, by two contracts with each of the following Water Supply Trebinje, Water Supply Istocno Sarajevo, Water Supply Brod and utility company “Buducnost” Laktasi, and by one contract with Water Supply Prnjavor and Water Supply Zvornik.
„Interkont-komerc“ has also cooperated well with the Republic of Srpska Railways. In 2015 they concluded two contracts with a total value of BAM 1.108.406.
The omnipresent Kaja
Companies owned by Mladen Milanovic Kaja “MG Mind” and “Mrkonjicputevi” are also pretty often included in the business with public enterprises. His companies “MG Mind” and “Mrkonjicputevi” deal with different kinds of works – asphalt works, construction, trade. In early 2011 “MG Mind” bought a majority share of Banja Luka’s “Trznica” for more than BAM 30 million. According to the judgments of the Court of BiH it was found that two companies which cooperated with “MG Mind” laundered around BAM 6 million. Milovanovic has been connected to the Minister of Finance, Zoran Tegeltija, several times and it is known that their relations are more than just good, but it is also known that he owns several other companies besides „MG Mind“ and „Mrkonjicputevi“.
This year “MG Mind” has got several jobs from Roads RS. The value of the first contract is BAM 18.4 million, of the second BAM 9.6 million, of the third BAM 1.1 million, and of fourth BAM 950.000.
Fifth, sixth and seventh contracts were signed the same day, on 9th March, and their overall value is BAM 2.9 million. Only two days earlier, on 7th March, two more contracts worth of BAM 1.6 million were concluded.
Two years ago “MG Mind” also cooperated with the Roads of RS and benefited well from that cooperation. Three contracts were signed. One for the rehabilitation of the part of the regional road Gornja Vijaka – Razboj of the value BAM 561.681, and the other for reconstruction and demolition of two bridges in Vrbanja worth of BAM 586.580.
Third contract was significantly cheaper with the value of BAM 47.081. In other words, “MG Mind” earned BAM 1.195.342 for those three jobs. The Roads of RS paid BAM 10.854.789 to Kaja’s company for modernization and construction of an unknown local road.
The overall business of two companies owned by Mladen Milanovic with the Roads of RS since 2015 until today is BAM 58.6 million.
„MG Mind“ cooperated with other public enterprises in the Republic of Srpska as well.
In 2015 they concluded a contract with power utility Elektrokrajina related to the construction of a branch office in Celinac. The cost of this project was BAM 416.799. Hydropower plant on Vrbas cooperated with the famous company from Mrkonjic Grad last year on one occasion only for BAM 25.419, but their cooperation was far more successful in a year prior to that, in 2015, when they concluded three contracts of total value BAM 265.696. The reconstruction of the warehouse for bulk material was the most expensive (BAM 196.513).
Last year “MG Mind” had two projects with public institution Vode Srpske. Once the cost of their works was BAM 22.875, and the second time it was more expensive for two Bosnian marks. A year prior to that the company “MG Mind” performed reconstruction of the bridges and was paid
BAM 226.855 for that.
State Forestry Company of the Republic of Srpska has engaged the companies of Mladen Milanovic as well. According to the data found in the data base of Transparency International BiH they signed three contracts of the total worth BAM 347.980.
Special parallel relations
Another company owned by Milanovic, “Mrkonjicputevi”, also gets projects worth millions in the Republic of Srpska, but not in the Federation of Bosnia and Herzegovina.
„Mrkonjicputevi“ signed three contracts with “Roads of FBiH” in 2015, 2016 and 2017, one each year. The total value of those contracts is BAM 791.000.
„Mrkonjicputevi“ were also engaged by the Roads of Srpska. In this year for five times so far, and earned BAM 20 million for now. In 2015 only one contract was concluded (BAM 2.425.737) just like in 2013 (BAM 2.584.088).
In this way, the total benefit the two companies owned by Mladen Milanovic achieved cooperating with the Roads of Srpska in the period from 2015 until the present is BAM 58.6 million.
State Forestry Company of the Republic of Srpska engaged “Mrkonjicputevi” twice last year: first time the cost was BAM 83.136, while the second engagement consumed BAM 110.455. In 2015 State Forestry Company concluded three contracts with “Mrkonjicputevi”, and paid the following prices BAM 154.395, BAM 67.228 and BAM 60.757 respectively. The structure was the same in 2013 – BAM 111.029, BAM 178.732 and BAM 65.062. Hydropower plants on Vrbas concluded only one contract with this company in 2015 whose worth was BAM 248.613.
They came quietly and won the tender
Company “Prointer” became publicly known after this year’s tender related to the Health Insurance Fund of the Republic of Srpska. The Public Health Procurement Plan for 2017 designated BAM 17.4 million (no VAT included) to be spent on procurement of “hardware, software, electronic cards and readers for IZIS” but in January the Management Board of the Fund brought a decision based on which the estimated value of the procurement was changed and increased to BAM 23.2 million (no VAT included).
On several occasions in public it was unofficially pointed out that a person behind this company was Igor Dodik, son of Milorad Dodik, although he denied it several times. Slavisa Kokeza was indicated as the second owner.
Regardless of the official owner of this company, the contracts “Prointer” concluded in only two years demonstrate that this company has unusually large confidence of the public enterprises in RS, and other RS institutions, such as the Tax Administration or the Government of the Republic of Srpska,
„Prointer“ won jobs all around, from Trebinje to Pale, just in two years, even though nobody knows the exact direction. Last year this company signed three contracts with power utility Elektrokrajina, of overall value BAM 160.910.
One contract was concluded with power utility Elektrodistribucija Pale (BAM 17.799) and one with power utility Elektro-Doboj (BAM 56.096). In 2017 the aforementioned company has signed a contract with power utility Elektroprenos related to the procurement of computer equipment and servers worth BAM 246.000, and the implementation of the information system worth BAM 245.000.
The total value of contracts Prointer has concluded with public institutions and enterprises so far is BAM 15.5 million.
Hydropower plants on Trebisnjica has concluded three contracts with this company this year whose total value BAM 200.000. Power utility Elektro-Hercegovina engaged Prointer once this year, and had to pay BAM 10.813. The same situation is with public institution Vode RS which concluded one contract (BAM 55.545) with Prointer. “Poste Srpske” has concluded most contracts with Prointer,
Six contracts have been signed this year, of the total value BAM 350.000. In 2016 “Prointer” concluded 12 contracts with “Poste Srpske” with the overall value of BAM 710.000.
Prointer had some cooperation with the Roads of RS, which awarded this company in January 2017 with a contract worth BAM 140.000.
The total value of contracts Prointer concluded with public enterprises is around BAM 2.2 million, while the total value of contracts Prointer has signed with public institutions and enterprises so far is around BAM 15.5 million.
Audits by Prime Ministers and beverages from Bijeljina
„Confida revizija Banja Luka“, managed by the former Prime Minister of the Republic of Srpska and Minister of Finance Aleksandar Dzombic was awarded two jobs in 2015 – one for “Poste Srpske” and the other one for Banja Luka Water Supply (BAM 20.000).
Dzombic’s „Grant Thornton“ was established in 2012. According to the available data this company won numerous tenders in BiH, part of which is related to the public enterprises. Last year “Grant Thornton” worked with “Roads of RS” (BAM 4.680), “Poste Srpske” (BAM 13.000), forestry company Sumskoprivredno društvo Srednjobosanske sume/Sumskogospodarsko drustvo Sume Sredisnje Bosne Donji Vakuf (BAM 10.000) and the Radio and Television of RS (BAM 6.850).
The company “Lala i Laco” was established in Bijeljina in 1993. The founder and General Manager is Milivoje Stanivukovic. This company imports and distributes all kinds of non-alcoholic and alcoholic beverages and other consumer goods. They supply, as they themselves emphasize, many exclusive cafes, restaurants and clubs. They cooperate with numerous European producers and distributors, mega markets and retailers. Those more familiar with the situation in Semberija link them to SNSD party, although these connections seem not to be so strong as those of Zeljkovic or Kaja.
In 2015 this company concluded three contracts – one with Water supply Banja Luka (BAM 22.586) and two with the Olympic Center “Jahorina” (BAM 42.387). This year “Lala i Laco” has concluded three contracts with Gacko Thermal Power Plant worth BAM 211.900. They cooperated in previous years as well. Many things were supplied by “Lala i Laco”: colonial food for employees, cleaning products and toiletries, fish and fish products. Those contracts, from 2013 until today, have the overall value of BAM 404.504.
In the same period they also concluded two contracts with Hydropower plants on Trebisnjica worth BAM 14.366.
Expensive gags
Public enterprises and institutions do not hesitate to assign jobs to private companies with which they are related in political or family context.
Such examples increase the doubt of citizens in the existence of nepotism and providing privileges to some companies.
The alleged transparency and compliance with legal procedures disappear before the data on frequent appearance and selection of the same companies for the same or similar jobs.
The existing Law on Public Procurement of BiH do not prevent such situations frequently, and sometimes even provides possibilities for legalizing the steal and use of taxpayers’ money for private and political interests.
Database of contracts concluded by 195 public enterprises
Database established by Transparency International regarding procurements performed by public enterprises encompasses 195 public enterprises in BiH and it is available at https://tibih-database.org/ugovori-o-nabavkama-javnih-preduzeca. Contracts within this database refer to 2015 and 2016. The database contains names of suppliers, the subject of the contract, procedure type, date of concluding it and the value of the procurement.
As part of its researches, Transparency International in Bosnia and Herzegovina regularly collects documentation owned by public institutions which contains information about their operations. This includes public procurement contracts, temporary work contracts, information on employment, public expenditures, etc.
Very often institutions do not publish such information, which is why TI BiH decided to gradually publish all collected data in a form of searchable data base, so to give citizens possibility to have the access to these documents.