Federal Government Adopts Draft Public Investment Program for 2018-2020

The Federal Government, at its 109th session in Sarajevo today, upon the proposal of the Federal Ministry of Energy, Mining and Industry, determined the Bill on Amendments to the Law on Financial Consolidation of Business Entities in the Federation of Bosnia and Herzegovina and sent it to parliamentary procedure under an abbreviated procedure.

This law aims to remove obstacles to the implementation of decisions on financial consolidation of business entities, as business entities for which financial consolidation procedures have been approved will not be able to complete the initiated activities within the legal deadline of July 10, 2017, when the law ceases to be in effect. The proposed legal solution allows business entities to resolve the defined problem within another two years, i.e., by July 10, 2019.

The Bill stipulates that the financial consolidation procedure cannot last longer than July 10, 2019.

APPROVAL FOR REALLOCATION OF FUNDS FROM THE FEDERAL EMPLOYMENT SERVICE

The Federal Government has approved the Decision of the Management Board of the Federal Employment Service Sarajevo on the reallocation of part of the funds from the dedicated cash deposit with the Development Bank of the Federation of BiH.

Funds from the dedicated cash deposit in the amount of 16,000,000 KM, which are deposited with the Development Bank of the Federation of BiH in accordance with the Agreement on the Establishment of a Dedicated Deposit dated August 24, 2005, for the purpose of implementing the Program of Long-Term Loans for Employment Promotion, will be reallocated to the transaction account of the Federal Employment Service for the implementation of active employment policy.

The justification for this decision stated that in the past few years, there has been a noticeable decline in user interest in loans provided by the Program of Long-Term Loans, resulting in low employment effects.

It was assessed as justified and expedient to redirect part of the available funds of the Federal Employment Service from the deposit with the Development Bank of the Federation of BiH to the account of the Federal Employment Service, exclusively for the implementation of regular active employment policy measures (co-financing of employment, self-employment, and training of unemployed persons).

150,000 KM FOR CO-FINANCING THE DEVELOPMENT OF THE AUTOMOTIVE INDUSTRY

The Government of the Federation of Bosnia and Herzegovina, in its capacity as the Assembly of the Development Bank of the Federation of Bosnia and Herzegovina, approved the allocation of funds from the part of the remaining funds generated from the sale of companies under the jurisdiction of the Privatization Agency in the Federation of BiH, deposited in the transaction account of a special fund of the Development Bank of FBiH, to the account of the Chamber of Commerce and Industry of the Federation of Bosnia and Herzegovina for co-financing the Project "Development of the Automotive Industry of the Federation of Bosnia and Herzegovina" for the period 2017-2018 in the amount of 150,000 KM.

These funds will be earmarked for co-financing the bureau in Germany and co-financing the operation of the Development Office within the Chamber of Commerce of FBiH.

Upon reviewing the financial part of this project, planned annual costs of 240,400 KM were recorded. The funds will be earmarked for financing the bureau in Germany in the amount of 200,000 KM annually and financing the operation of the Development Office within the Chamber of Commerce of FBiH in the amount of 40,400 KM.

The main goal of this joint project is to improve the automotive industry by systematically increasing the competitiveness of the domestic economy. Through the newly opened office in Germany, domestic manufacturers will have constant market contact, creating prerequisites for new business and thus increasing investments in new production capacities.

The domestic automotive industry would create conditions for mastering more complex components of electric cars, new jobs would be created, and exports would increase. The project's effects would be a five percent increase in the number of workers in the automotive industry and a four percent increase in exports and production.

SAVINGS OF 5,932,226.58 KM THROUGH JOINT PUBLIC PROCUREMENT FOR PENAL-INSTITUTIONAL FACILITIES

The Federal Government adopted information on the effects of joint procurement for the needs of the Federal Ministry of Justice and penal-institutional facilities, which stated that efficient public procurement was achieved by applying an innovative open procedure for joint procurement, using framework agreements with multiple bidders and mini-tendering.

In this preliminary procurement phase, savings of 5,932,226.58 KM were achieved, with an increase in value for individual items, primarily due to increased procurement quantities, and because in the canteen procurement, a brand name was requested and no equivalent was accepted, as it involved the purchase of goods with inmate funds.

It was also stated that previous joint procurements had resulted in savings. Currently, eight entities participate in the joint procurement process (seven penal-institutional facilities and the Federal Ministry of Justice).

Assessing the achieved results as positive, the Government supported the efforts of the Federal Ministry of Justice and the initiative to direct savings of nearly six million KM towards capital investments, improving accommodation conditions, and building new capacities of penal-institutional facilities.

FARM JASENICA LAND TO COOPERATIVE "MASLINA" FOR ANOTHER FIVE YEARS

The Federal Government has granted temporary use, free of charge, for a period of five years, of the Jasenica farm land with a total area of 37,617 square meters, along with associated facilities, to the Veterans' Agricultural Cooperative "Maslina" Čitluk.

This land, on which the "Maslina" cooperative cultivates agricultural crops, was granted for temporary use five years ago, and with a new request, this cooperative has expressed its intention for its continued use.

The Government of FBiH, through the Federal Ministry for Veterans and Disabled Veterans of the Defense-Liberation War, encourages employment and self-employment of veterans through such cooperatives. For the second year in a row, this ministry allocates one million convertible marks from the budget for these purposes.

REPORT ON THE INDEBTEDNESS OF FBiH BASED ON THE ISSUE OF TREASURY BILLS

The Federal Government adopted the report on the indebtedness of the Federation of BiH based on the issue of treasury bills held on June 13, 2017, when 3,000 treasury bills with a nominal value of 10,000 KM per bill were offered, totaling 30,000,000 KM, with a maturity of 182 days using the multiple price method.

During the auction, ten bids were received for the purchase of 3,190 treasury bills in the total amount of 31,900,000 KM. Nine bids totaling 30,000,000 KM were accepted, representing 100 percent of the planned issue volume.

Treasury bills were sold at an average weighted accepted price of 99.8677 and an average weighted interest rate of 0.27 percent on an annual basis. The total amount of funds raised through the issue of treasury bills is 29,960,305.90 KM, and they are due for payment on December 31, 2017.

It was concluded that, once again, the significant interest shown by the banking sector in purchasing treasury bills speaks volumes about the banks' great trust in the FBiH Government. Today, all media speculations about the uncontrolled borrowing of the FBiH Government and its entry into the so-called "Greek scenario" were also dismissed as incorrect. In this regard, it was stated that the FBiH Government planned to borrow 712 million KM in 2017, while simultaneously repaying 1.2 billion KM in loans and one hundred million in interest this year. All borrowings of the Federation through treasury bills and bond auctions are short-term and exclusively serve the purpose of debt repayment, and all are time-limited to one year.

Analyses show that the total debt has decreased by 50 million KM during this government's mandate, meaning the FBiH Government repays more funds than it borrows.

This is also supported by the fact that one planned issue of treasury bills was not conducted last year due to lack of need, which will likely also happen with the auction planned for September this year, it was stated at today's session.

STATEMENTS ON INITIATIVES

The Government of the Federation of BiH did not accept the amendment to the Bill on Amendments to the Law on Early Preferential Retirement of Defenders of the Defense-Liberation War, submitted by Jasmina Zubić, a Member of the House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina. It requested the extension of deadlines for submitting applications for recognition of rights to preferential retirement in accordance with this law.

The justification for the amendment stated that the prescribed deadlines for submitting applications particularly affected war invalids with a disability rating of 60 percent and higher who were declared medically unfit solely due to injuries sustained in combat, and who did not submit a retirement application by the deadline established by the Law, because the veteran and disability protection services had not issued them certificates by the established deadline.

The reasons for not accepting this amendment highlighted that the Federal Government, at its 100th session held on April 27, 2017, determined and sent to the Parliament of the Federation, under an abbreviated procedure, the Bill on Amendments to the Law on Early Preferential Retirement of Defenders of the Defense-Liberation War.

The reason for the amendments to the law is to eliminate discrimination and unequal rights among members of the veteran population arising from the adoption of the Law on Early Preferential Retirement of Defenders of the Defense-Liberation War. Furthermore, the ruling of the Constitutional Court of the Federation of BiH dated January 22 and 29, 2014, which determined that Article 15, Paragraph 1 of the Law on Early Preferential Retirement of Defenders of the Defense-Liberation War is not in accordance with the Constitution of the Federation of BiH, has been implemented.

By deleting Article 14, Paragraph 3 of the Law, the deadlines for submitting applications for all categories from Article 4 of the Law would be opened, which requires a detailed analysis of potential beneficiaries to calculate the necessary financial resources in accordance with the Law on Budgets in the Federation of BiH and the Rulebook on the Procedure for Drafting the Statement on Fiscal Impact of Laws, Other Regulations, and Planning Acts.

In order for this amendment to be discussed in Parliament, a statement on fiscal responsibility, i.e., an exact calculation for potential new beneficiaries, must be attached to it.

It was also stated that the Law on Budgets in the Federation of BiH stipulates that proposals for laws and other regulations and acts must contain a fiscal assessment of the impact on the budget, which must show whether budget revenues or expenditures increase or decrease.

Having considered the initiative to amend the Law on Early Preferential Retirement of Homeland War Veterans, submitted by the Coordination of Associations of Police of the Ministry of Internal Affairs of RBiH, 1991-1995, the Federal Government adhered to the text of the Bill on Amendments to the Law on Early Preferential Retirement of Homeland War Veterans, which is in parliamentary procedure.

Regarding the initiative to amend and supplement the Law on the Return, Allocation, and Sale of Apartments, submitted by MP Jasmina Zubić, the Federal Government of Bosnia and Herzegovina, upon the proposal of the Federal Ministry of Spatial Planning, determined a statement assessing that it is not justified because this law has been largely implemented.

The adoption of amendments and supplements in the proposed manner is not justified because any further regulation would be the resolution of individual cases, which cannot be fully achieved by any legal solution, the statement says.

DRAFT PUBLIC INVESTMENT PROGRAM OF FBiH FOR 2018-2020 ADOPTED

The Federal Government adopted the Draft Public Investment Program of the Federation of Bosnia and Herzegovina 2018-2020 and tasked the Federal Ministry of Finance to invite cantons to adopt public investment programs for this period as soon as possible and submit them before October 20, 2017, so that, along with the Draft Public Investment Program of the Federation of BiH 2018-2020, they can be forwarded to the Government of the Federation of BiH and submitted to the Ministry of Finance and Treasury of BiH, with the aim of preparing the Public Investment Program of Bosnia and Herzegovina 2018-2020.

The Draft Public Investment Program of the Federation 2018-2020 contains data on a total of 49 projects with a total value of 4,327.24 million KM, of which 906.46 million KM relates to 16 nominated projects and 3,420.78 million KM to 33 projects under implementation.

Projects under implementation are financed by domestic and foreign funds. Domestic funds include budget funds, revenue collected from GSM licenses, funds from cantons, cities, municipalities, public enterprises, funds, domestic banks, and end-users intended for financing or co-financing projects.

Foreign funds include loans or grants from international financial institutions (World Bank, International Bank for Reconstruction and Development, European Investment Bank, European Bank for Reconstruction and Development, Council of Europe Development Bank, International Fund for Agricultural Development), the European Commission, governments of individual countries, and other bilateral donors. It is planned that in the period 2018-2020, a total of 1,558.98 million KM will be spent on projects under implementation.

The Government of FBiH today took note of the Draft Public Investment Program of Tuzla Canton for the period 2018-2020.

STAFF DECISIONS AND RESOLUTIONS

The Federal Government today authorized Renata Škroba ("Ceste" d.d. Mostar), Irma Memić ("BH Telecom" d.d. Sarajevo), and Ernest Đonko (JP "BH POŠTA" d.o.o. Sarajevo) as proxies to represent it at the general meetings of business entities.

The Federal Government today proposed the dismissal of two members of the Management Board of the Independent System Operator in Bosnia and Herzegovina from the Federation of BiH, Sead Dizdarević and Suad Salkić, due to the expiration of their mandates. Adisa Omerbegović-Arapović and Ramiz Bečić were proposed for temporary appointment as two members of the Management Board of the Independent System Operator in BiH from FBiH for a period of three months.

The dismissal of two members of the Management Board of the Independent System Operator in Bosnia and Herzegovina from the Federation of BiH, Dražan Rebić and Ilija Kožulj, due to the expiration of their mandates, was also proposed. Mario Dragičević and Boris Crnokić were proposed for temporary appointment as two members of the Management Board of the Independent System Operator in BiH from FBiH for a period of three months. The Council of Ministers of BiH will make the final decision on these proposals.