Old Town Municipality Approved BAM 13.4 Million Loan for Four Major Projects, Construction in 2018

The Old Town Municipality of Sarajevo has been approved a loan from the Saudi Fund for Development in the amount of 30 million Saudi riyals – approximately BAM 13.4 million, for the realization of four major projects: the construction of a sports hall, an underground garage, the reconstruction of the Old Town Health Center, and the "insulation" of the Old Town Municipality building. The projects must be completed by 2021, and loan repayment will begin in five years and last for 20 years.

Last week, the Mayor of the Old Town Municipality, Ibrahim Hadžibajrić, and the Assistant Mayor for Finance, Senada Katica, visited Riyadh and completed successful final negotiations, after which the Loan Agreement was signed. The idea has existed since 2013.

The process of applying for loan funds began four years ago and was very thorough and exhaustive, but as Mayor Hadžibajrić explained, the final negotiations were very short and they quickly reached an agreement.

- In addition to projects concerning the Old Town Municipality, the Old Town Health Center, and the "Edhem Mulabdić" Elementary School, I emphasize that we have finally found a solution for the construction of the underground garage in Avdage Šahinagića Street, meaning it will be financed 100% by loan funds. Unfortunately, we lost a full two years due to this project – due to tender rejections that lasted throughout last year and agreements on public-private partnerships that have been ongoing this entire year. Now, with the approval of loan funds, there will be no public-private partnership; the garage will be ours and fully registered to the Old Town Municipality, which will receive all revenue from its use – Hadžibajrić explained.

A tender procedure will be conducted to select the contractor, but their selection must be confirmed only by the Saudi Fund for Development according to their procedures, so there should be no obstacles from other federal or state institutions.

- In the best-case scenario, the construction of the garage, as well as other projects, will begin in the spring of next year, simultaneously – Hadžibajrić confirmed.

- We estimate that the garage will generate a profit of around BAM 60,000 per month, while the loan installment will be around BAM 53-54,000. This means that we will pay off all four projects with the revenue from the garage – said Hadžibajrić, explaining that even without this revenue, the Municipality could bear the loan debt.

The "Edhem Mulabdić" Elementary School is attended by students from five municipal areas, from the slopes of Trebević to Baščaršija. The importance of building a new sports hall for them is immense, as confirmed by the principal, Aida Omersoftić.

- Our school has a gymnasium that is in very poor condition and is completely inadequate. It is very important to emphasize the significance of our mayor's sensitivity in helping schools. He is fully aware of the importance of physical and health education, and this is the culmination of his support for our school. This hall will completely improve the conditions of the educational process when it comes to physical education. It is the only thing we have been missing in the school – said principal Omersoftić.

According to the director of the Sarajevo Canton Health Centers Public Institution, Fuad Husić, the reconstruction of the Old Town Health Center has not been done for years, and it will be a gift to this public institution, but primarily a gift to the citizens of Old Town.

- Caring for the health of the population means caring for the basics, which are the citizens. An indicator of the normal development of an environment like a local community is a healthcare system, which means caring for citizens. We have already made a plan for when the reconstruction of the facility will take place, to which locations we will relocate the necessary facilities and human resources in order to provide health services without interruption – said Husić.

It is important to emphasize that the construction of the sports hall and the reconstruction of the Health Center will be realized through the loan debt of the local community, in this case, the Old Town Municipality, even though it does not have jurisdiction over them, and higher levels of government should be making these investments. The exact amount of funds per project will be known after the tender procedure is completed. During the five-year grace period, the Municipality will only repay 2% of the so-called "processing fee" of the loan to the Saudi Fund for Development.