We are watching a live broadcast of the dismantling of the gas market at the state level!

Almir Bečarević, former director of BH-Gas, sent an open letter to the public in which he once again warns about malversations related to gas supplies to our country, reports the BH news agency Patria. We are publishing the letter in its entirety.

Dear Sir/Madam,

For months, and even years, I have been warning about the scenario that is now practically happening. This scenario involves the takeover of gas business by Republika Srpska, specifically by the company GasRS. I spent eleven years as director at BH-Gas and I am familiar with the actions of the Government of Republika Srpska and companies from Republika Srpska in implementing the contract with Gazprom on supplying Republika Srpska with gas directly and without the involvement of companies from the Federation of Bosnia and Herzegovina, Energoinvest, and BH-Gas.

For years, two federal companies successfully prevented the signing of any contract and the takeover of the gas procurement business. With the economic collapse of BH-Gas and the complete lack of desire from the BH-Gas management to prevent the signing of this contract, what was planned by the authorities of Republika Srpska has happened.

First, as planned by the owner of Birac and the authorities of Republika Srpska, bankruptcy was declared at the Birac Zvornik factory with a debt of 24 million KM owed to BH-Gas, and then, within a radius of 150 meters, a new company, Alumina, was founded with the same workers, but now with management appointed by Republika Srpska.

This newly founded company, as a transitional solution, started buying gas from MOL-trade and leased transport capacities in the Srbijagas system. The debts remained, but the gas business continued.

At the same time, throughout this period, the Federation of Bosnia and Herzegovina paid the debt incurred during the period 1991-1995 (the known 5 dollars), while the Government of Republika Srpska ignored this obligation, even though it signed the Agreement on the method of debt repayment from the war period.

As planned, and since the first part of their plan succeeded, the Government of Republika Srpska sought to sign a Gas Supply Agreement for Republika Srpska, based on the adopted Law on Gas of Republika Srpska (2007), which opened the market for gas trading in Republika Srpska. During that time, obstructions were occurring at the level of the Council of Ministers - Ministry of Foreign Trade and Economic Relations to propose a Law on Gas at the BiH level to the BiH Parliament. This Law, in fact, would neither help nor hinder this business, but it would set guidelines for regulating the market, especially by forming a gas regulator.

What do we have now and what have we gained?

Republika Srpska, i.e., the Government of Republika Srpska, after years of attempts, has signed an Agreement on the purchase of gas with Gazprom, which will enable the supply of consumers in Republika Srpska. What should concern the authorities in the Federation of Bosnia and Herzegovina is that this gas will be cheaper than what is sold in the Federation of Bosnia and Herzegovina. I will present an example.

Alumina factory buys gas on the Hungarian market at the same price that Energoinvest/BH-Gas buys gas from Gazprom, with one major difference: the final cost of gas in the Federation is 530 USD/1000 Sm3, while for Alumina factory, this gas costs just over 400 USD/1000 Sm3. BH-Gas is burdened with debts, high uncollected receivables, etc., while Alumina procures this gas for its own needs and based on a gas import license from the Regulatory Agency in Trebinje. GasRS, the company that will be entrusted with gas import, has no debts nor does it start with sold and uncollected gas.

What is certain is that it was also signed in Moscow that the issue of the debt from the war period will be resolved first, and then the entire deal can begin. Since this business is of vital importance for the Government of Republika Srpska, any future government formation will be conditioned by resolving this issue and its ratification by the BiH Parliament. An agreement on the method of resolving the debt has been drafted and is in the procedure of the Council of Ministers.

By signing this Gas Supply Agreement for Republika Srpska, we have ensured that BH-Gas will never collect its receivables from Birac (in bankruptcy), and there is a risk that Zvornik Stan will also leave its debts to BH-Gas and sign a supply agreement with a new supplier. The managements of BH-Gas have never initiated proceedings before the Court of Bosnia and Herzegovina regarding the obvious fraud by which the authorities of Republika Srpska enabled Alumina to operate while shutting down Birac. The managements of BH-Gas have never sent a notification to the Government of the FBiH and warned them about this scenario, nor has anything been done to prevent this business in any way, at least until the Federation of Bosnia and Herzegovina collects its receivables.

And finally, without being a prophet. The price of gas in the 4th quarter of 2014 and the 1st quarter of 2015 will be reduced by Gazprom by approximately 40 USD, while BH-Gas, for the reasons listed above, will seek a price increase of at least 10 percent. The next consumer who will seek a new supplier is Mittal from Zenica, all based on the adopted Law on Gas of the FBiH. We are watching a live broadcast of the disappearance of a public company and the dismantling of the gas market at the level of BiH and the Federation of BiH in the same way as in the oil sector.