Party of BiH will not support amendments to the South Interconnection Law: It is a derogation of the Dayton Peace Agreement

(Patria) - After the Government of the Federation of BiH determined and sent the Law on Amendments and Supplements to the Law on the "South Interconnection BiH and Croatia" Gas Pipeline to the FBiH Parliament, with the proposal to consider and adopt it as a matter of urgency, it has once again been shown that the FBiH Government has no sensitivity in protecting state energy projects and state companies, but rather, following Dragan Čović's directives, fulfills wishes, even in this project which is of crucial importance for the security of BiH's natural gas supply and diversification of supply sources, according to the reaction of the Party of BiH.

"It is evident that the question arises whether these amendments to the Law also create prerequisites for imposing the company of Amir Gross Kabirija in gas trading instead of Energoinvest, who signed a Memorandum of Understanding in February this year, which provides a framework for long-term natural gas supply. Is the goal of this FBiH Government to undermine the energy sector of the Federation of BiH by 'inserting' two private companies instead of two state-owned ones, all under the marketing slogan of urgently regulating the energy sector?

Namely, by involving Dodik's lobbyists for the lifting of sanctions to which he was exposed, the real intentions of realizing the South Interconnection project are called into question, especially considering that the law directly names the company AAFS Infrastructure and Energy LLC, which was formed just over half a year ago. The aforementioned company is registered at an address where a business building is located, which is also the address for hundreds of thousands of companies that use this location as a commercial registered agent for their limited liability companies, from which it follows that this company has absolutely no competencies or knowledge in the implementation of gas projects and projects from the energy sector.

In this regard, the part concerning the management of the constructed gas pipeline has been removed from the amendments to the Law, which confirms these claims, and the initial plan to grant a concession to this company is now only an option in the amendments to the Law. How the FBiH Government views this project is best seen in the fact that through the amendments to the Law, the provisions of Annex 9 of the Dayton Agreement have been derogated, which provides for the establishment of public corporations in BiH for projects and services of common interest to both entities of BiH.

Instead of insisting on forming a public corporation in BiH, as is regulated in the electricity sector and the railway transport sector, and public broadcasters, we now have a situation where, for the first time, this concept is being abandoned by naming a private company through the Law that will implement the project, thus disrupting the concept of public corporations in the natural gas sector.

The aforementioned creates a legal precedent that could potentially be used tomorrow as an argument for the dissolution of already formed public corporations in BiH," states the SBiH.

At the same time, the amendments to the Law stipulate that the investor in the process of resolving property-legal relations is not obliged to pay compensation for expropriated property to the Federation of BiH, cantons, cities, municipalities, public enterprises, or public institutions, which also creates a legal precedent for a private company to be exempted from this obligation, and on property that is prohibited from disposal by the decision of the High Representative in BiH.

"Despite all of the above, the FBiH Government is awarding the construction of the gas pipeline to a private entity, although it has not resolved the preceding issue, nor are activities being conducted in the competent Federal Ministry of Energy, Mining and Industry regarding who will guarantee the credit arrangement that will be provided by the said company, and thus the question arises whether this will further burden the FBiH budget, or more importantly, under what conditions.

The competent ministry should at least know that an intergovernmental agreement is not a substantive basis for the implementation of the project, as it is only an expression of political will, while the project for interconnection gas pipelines begins through the definition of the so-called Cross Border Capacity Agreement, which must be agreed upon and signed by the two system operators with the consent of the regulatory bodies. It is inevitable to harmonize issues such as the connection point of the gas pipeline, capacity leasing, technical standards, balancing, guarantees, and a whole series of other substantive issues, because everyone seems to forget that neighboring Croatia, as an EU member, is particularly obligated in this regard.

All of the above shows that this undertaking was approached with only one goal, and that is to determine, through amendments to the Law, the company that will build the gas pipeline and seek adequate guarantees through a credit arrangement, while what constitutes an international interconnection has been neglected and pushed into the background. For a gas pipeline as infrastructure to function at all, someone must manage it and obtain the status of a Transmission System Operator (TSO), which has not yet been determined, nor is it known who it would be, which clearly confirms that the FBiH Government has abandoned the public corporation model and embarked on an adventure that could jeopardize already formed public corporations.

Based on all of the above, the Party of BiH will not support the proposed amendments to the Law, because we do not want, first and foremost, to participate in the derogation of the Dayton Agreement, nor in abandoning the concept that means regulating natural gas transport through Annex 9 of the Dayton Agreement, in a way that the public service of gas transport is regulated in the same way as it has already been done in the electricity sector through the established Elektroprijenos, as a state company.

The Party of Bosnia and Herzegovina is unequivocal in its commitment to work with international partners, including the US administration in BiH, on improving the Dayton Agreement, not on its destruction, and on improving the energy security of all citizens in BiH, while meddling in such significant state-building issues is left to the outgoing 'Trojka'," the party concludes.