Bečarević on the Indebtedness of Sarajevo Canton: Rapidly Heading Towards One Billion KM

(Patria) - The Cantonal Council of the Party for Bosnia and Herzegovina Sarajevo today issued a press release analyzing the state of indebtedness of Sarajevo Canton.

As they state, obtaining data is extremely difficult, because the "most transparent" Government of Sarajevo Canton addresses this issue through various documents, while at the same time still not wanting to release a comprehensive document on the state of indebtedness through the prism of all loans taken and those in the process of approval through parliaments or in the final stage of contracting.

For the initial amount of the loan balance, we will take the statement of the current Minister of Finance Afan Kalamujić given to the media, where he stated that the indebtedness of Sarajevo Canton is at the level of 430 million KM, we quote:

"The loan amount itself is currently almost 430 million KM, which sounds like a lot at first, but is actually a drop in the ocean when we know how the countries of the region live and survive..."

On the website of the Ministry of Finance, in the document titled "Debt Management Strategy of Sarajevo Canton 2023-2025," the total debt of Sarajevo Canton amounts to 483 million KM, and this is the state as of December 31, 2022.

By this very data, the minister is not even aware of the state of debt processed in the document of his Ministry. The previous debt reflects the state of what has been signed and is being repaid to foreign creditors and domestic banks. This state does not include everything that was approved by the Government of Sarajevo Canton at the end of 2022 and during 2023 and 2024, and which is in the process of ratification through parliaments or in the final stage of negotiations with foreign creditors. This state also does not include the indebtedness to domestic banks planned through the budget for 2024.

Now we present the state of new loan indebtedness approved by the Government of Sarajevo Canton at the end of 2022, during 2023, and at the beginning of 2024:

1. 23 million EUR, World Bank, Air Improvement Project;
2. 8.5 million EUR, EBRD and EIB, Modernization of the tram and trolleybus depot;
3. 25 million EUR, EBRD, Sarajevo Public Transport E-mobility (initial amount 17 million EUR);
4. 25+5 million EUR, EBRD, Construction of the Ilidža-Hrasnica tram line;
5. 35 million EUR, EIB, Urban Transport in Sarajevo-B;
6. 35 million EUR, EBRD, District Heating Plants;

TOTAL: 156.5 million EUR or 306 million KM.

With the state as of December 31, 2022, of 483 million KM and with these new loan indebtednesses, all in procedure, the total sum of loans of Sarajevo Canton will amount to 789 million KM. At the same time, the planned indebtedness to domestic commercial banks through the budget for 2024 amounts to 106 million KM, and if only 50% of this amount is realized, we will get an indebtedness of 842 million KM.

With indebtedness of 842 million KM, we reach almost the maximum legal limit up to which Sarajevo Canton can borrow at all, and we reach an amount almost equal to the total amount of original revenues of Sarajevo Canton in one year. For this year alone, the repayment of loans and interest is planned in the amount of approximately 80 million KM.
The Cantonal Council of the Party for Bosnia and Herzegovina Sarajevo believes that it is necessary to organize a thematic session of Sarajevo Canton, because the Canton is galloping towards loan indebtedness of one billion KM and the legal maximum where it will no longer be possible to borrow, and the debts will be repaid by the children of the current members of the Government of Sarajevo Canton.

At the same time, we leave the possibility of an error in the sum of new loan indebtednesses of about 10%-15%, but also these indebtednesses do not include projects related to the Smiljevići landfill, the new landfill, a permanent solution for polluted air, and other planned projects in Sarajevo Canton, states Almir Bečarević, President of the Cantonal Council of SBiH.