Concessions in Bosnia and Herzegovina
By Tijana Kondic, Law Firm Sajic
The laws on concessions in Bosnia and Herzegovina, at both the entity and the state level, regulate the tendering procedure and the manner of investing private capital in cases of insuffcient budgetary funds for the projects of general interest, especially in the fields of transport, energy, communication, water resource management, etc.
Laws regulating the area of concessions in Bosnia and Herzegovina include the following:
- Law on Concessions of Bosnia and Herzegovina;
- Law on Concessions of the Republic of Srpska;
- Law on Concessions of the Federation of Bosnia and Herzegovina;
- Law on Concessions of the Brcko District of Bosnia and Herzegovina;
- Cantonal concessions laws (10).
Bosnia and Herzegovina is a country in transition, with an underdeveloped economy and infrastructure, but with significant natural and social resources. Therefore, the concession investments represent an opportunity to achieve a significant shift in industrial and economic development.
The legal arrangement for the allocation and use of concessions in Bosnia and Herzegovina is largely influenced by a complex political and legislative system. In theory, concession is primarily the right granted, mostly, by the state. However, in Bosnia and Herzegovina, as a complex and decentralised state, this is not an explicit case, and the concession is granted based on the aforementioned laws but depends on the territorial location of the subject of the concession.
The general goal of the state-level laws, the entity and cantonal levels, is to contribute to economic growth and development by establishing a legal framework, which will encourage foreign and domestic investments, while at the same time improving the transparency of the award procedure, increasing the effciency and long-term sustainability of concession projects and enabling responsible management of natural resources and public goods.
Based on the research carried out, the data collected and the current estimates, the conclusion is that Bosnia and Herzegovina possesses:
- Significant amounts of coal reserves;
- Metallic-mineral raw materials (reserves of iron, bauxite, lead and zinc ores);
- Non-metallic minerals (rocksalt deposits and pyophyllite);
- Water: as a hydro-potential of fast mountain and lowland river flows, springs, high-quality drinking water suitable for market sale in bottles, thermal and mineral waters with over 220 different sources;
- Wind, as a natural resource for generating electricity;
- Agricultural land, etc.
The priority of the concession investments in Bosnia and Herzegovina, with the aim of effcient development is:
- Use of water as a renewable energy source for the construction of hydroelectric facilities for commercial, tourist and health purposes;
- Use of mineral raw materials for construction purposes;
- Use of agricultural land, in order to create the basis for the development of the processing industry, employment, etc.;
- Use of tourism potential for the development of various tourist and sports-recreational facilities;
- Use of existing and construction of new facilities in the field of transport and communication infrastructure.
Harmonisation with the EU rules, in particular harmonization with the EU Directive 2014/23 which defines the area of concessions and which is based on identical principles and professional public procurement (transparency, equal treatment, nondiscrimination, market competition, protection of the public interest, effciency, economy), is very important for Bosnia and Herzegovina.
Bosnia and Herzegovina does not maintain a unified registry of awarded concessions at the state level, but registers at the entity and cantonal levels.
It is important to emphasise that, unlike the aforementioned EU Directive 2014/23, which does not mention any self-initiative offer in any of the provisions, self-initiative offer as one of the ways to initiate the procedure for awarding the concession is foreseen in all the concession laws in Bosnia and Herzegovina.
In addition, very important for the concession awarding procedure (as more complex than the contract award procedure in accordance with the Law on Public Procurement), are strategic documents, medium-term plans and economic studies, due to the fact that on the basis of the same will be considered the justification for the award of a concession contract.
Considering all the abovementioned, Bosnia and Herzegovina is working on the establishment of a strategic-planning system in order to use natural resources for projects for the benefit of all citizens of Bosnia and Herzegovina through proper strategic decisions and plans.
Published: GGI Insider, No. 102, July 2019 l Photo: marcin jucha - stock.adobe.com