RS Government Buys Toma Kovač's Building in East Sarajevo for 26.6 Million KM!

The Government of Republika Srpska has decided to spend 26.6 million KM on the purchase of a building with an area of 9,077 square meters in East Sarajevo to house representatives of Republika Srpska in BiH institutions, reports the Patria news agency.

The purchase agreement was signed on January 16 with the private company „Megasan“ Pale, which, according to the Republika Srpska business register, primarily deals with funeral and related services, reveals the business portal CAPITAL.ba.

-The public call for the purchase of the property, published on September 29 last year, received two bidders: the company „Megasan“ d.o.o. Pale and „Marvel“ East Sarajevo. „Marvel“ withdrew, stating that due to technical issues it was unable to meet the requester's requirements. The purchase agreement was signed with the bidder „Megasan“ Pale on January 16, 2015, states the written response from the Public Information Bureau of the Government of Republika Srpska to questions from the CAPITAL.ba portal.

The Government confirmed that the price of the real estate being purchased, including value-added tax, amounts to 26,609,000 KM.

-Previously, the Service for Common Affairs of the Government of Republika Srpska was tasked with negotiating on behalf of the Government of Republika Srpska with the bidder „Megasan“ on reducing the price for the offered property, and on December 1, 2014, the bidder submitted a corrected price in the amount of 26,609,000 KM, which is a difference of 2,500,000 KM compared to the initial offer, they say in the Government.

The property, located at Vojvode Radomira Putnika bb, Bijelo Polje, East Sarajevo, will have a business and representative section. The total net area of the entire building is 9,077 m2, and it will be handed over to the Government on a „turnkey“ basis.

-The seller agrees to fully change the purpose of the buildings at its own expense and hand them over to the buyer's possession. The Government undertakes to pay the price to the seller „Megasan“ within 30 days from the day the seller provides the following evidence: a final usage permit for the building, land registry extracts, property lists, and an extract from the book of deposited contracts for the sale of business buildings, business premises, and garages in which there are no registered encumbrances or restrictions (except for the restriction related to an already established right of easement on the plot designated as k.č. no. 25/12 entered in the Property List no. 93/1 k.o. Kasindo, over which a permanent easement of unobstructed passage was registered on June 19, 2013, in favor of k.č. no. 25/13) and in which the registration of the constructed building has been made, and a record of the handover of the property into possession, states the letter from the RS Government.

By contract, the Government has undertaken to pay 26.6 million KM within 30 days of the delivery of the last piece of evidence to the buyer.

Calculated, the square meter will cost citizens of Republika Srpska nearly three thousand KM (2,931 KM), which is about 550 KM more expensive than the joint BiH institutions paid for business premises in the same municipality. The Council of Ministers of BiH adopted a decision on February 11 to purchase, among others, a property with an area of 407 square meters in East Sarajevo for 997,370 KM (2,450 KM per square meter) to house the Agency for Prevention of Corruption and the Agency for Market Surveillance of BiH.

In total, the Government will pay 4.4 million KM more for the contracted property than the BiH institutions, not considering that it is a significantly larger property, which should result in a lower price per square meter.

It is unclear from which sources the Government will allocate 26.6 million KM, as the Budget of Republika Srpska for 2015, under the item „Expenditures for construction and acquisition of buildings and facilities,“ provides for an amount of only 3,049,000 KM.

The price of 26.6 million KM is not final, should the Government decide to take out a loan for the purchase. In addition to interest, significant funds will need to be allocated in the coming years for the maintenance of the building, including heating, electricity costs, telephone, utility, and other services.

The costs of accommodating representatives of Republika Srpska in joint bodies are paid from the BiH budget. By purchasing the building, the executive authority of Republika Srpska will enable significant savings for the BiH budget, at the expense of RS citizens.

The company „Megasan“, from which the building is being purchased, became known to the wider public when it received a 12 million KM contract for the construction of a student dormitory in Pale, which was opened by the President of Republika Srpska, Milorad Dodik, six days before the general elections in BiH.

According to CAPITAL information, the building in East Sarajevo that the Government is purchasing was taken over by the company „Megasan“ just before the signing from Toma Kovač, the owner of the company „Aleksandrija“ from East Sarajevo.