State to take over EUR 64 million of debts of Srbijagas and Petrohemija towards NIS

Source: Blic Monday, 04.12.2017. 11:37
(Photo: Tony Stock/
The debt of Srbijagas and Petrohemija of EUR 64.4 million towards Naftna Industrija Srbije (NIS), will be paid by taxpayers in 2018.

At least that's what the 2018 budget projection, adopted by the Government and waiting to be voted on by the National Assembly, says.

The debt of Srbijagas amounts to EUR 30.8 million, whereas Petrohemija's debt is EUR 33.6 million, The source of Blic from the Government claims that these liabilities need to be paid from the budget.

– The debts of Srbijagas and Petrohemija have been converted into public debt. This needed to be included in the projection of the next year's budget and be defined as an obligation, it should be known that, in addition to this money that the state will pay NIS, there are other obligations related to the two companies as well. These are guarantees for Srbijagas credits, which are inevitable, as banks do not want to lend it money without the state – the Blic source explains.

Due to this distrust by banks, the state plans to provide guarantees in the amount of EUR 90 million for Srbijagas in the next year. This is the money banks need to lend for the project of construction of a pipeline from the border with Bulgaria to the border with Hungary, whose value is EUR 70 million, and the second phase of the construction of the pipeline on the Aleksandrovac-Brus-Kopaonik-Raska-Novi Pazar-Tutin stretch, which requires EUR 20 million.

The Blic source from the Government claims that the state is forced to provide guarantees for these projects, as they are projects of strategic importance.

Mladjen Kovacevic, a professor of economics, says that such decisions by the state “encourage unsuccessful management”.

– The reason for all of this is that incompetent people, whose biggest asset is their political backing, have been appointed heads of these companies. A lot depends on managers and it is only when competent people are appointed to these positions that we will be able to expect changes. A huge number of people, however, would not accept the job as they are aware of the political situation. I believe that many companies would recover and start making profit if they were taken over by competent managers. Who knows how many years we will have to wait for this to change – Kovacevic says.
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