Belgrade 12. 09. 2010 Večernje novosti Večernje novosti


Everyone will benefit from Luka

About the verdict in favour of Luka and the following attacks
Now that we have the third verdict in our favour I don't see what more could Luka Beograd say about itself or its rights than what was stated in the court's verdict. The law is on our side. However some of our opponents still claim to be above the law. Same people are recycling the same accusations.

Now that we have the third verdict in our favour I don't see what more could Luka Beograd say about itself or its rights than what was stated in the court's verdict. The law is on our side. However some of our opponents still claim to be above the law. Same people are recycling the same accusations.

This is how Ivana Veselinović, Luka's president comments on, as she put it, the paradox that the High Court's decision to name them the sole bearer of rights to disputable 100 ha downstream from Pančevo bridge instead of putting an end to the dispute which has been going on 7 years reopens the old issues.

After the verdict, your company sent the message that this would be beneficial for the City and Luka? How is it possible if the City lost the right over 100 ha of land?

It's possible. For us the benefits are evident while the City gets the opportunity to charge the conversion fee and they don't care from whom- us or someone else. Besides, the City also has the opportunity to quickly develop this area which is the most polluted part of Belgrade. It is currently filled with waste dumps, hazardous material is produced there, 180 trucks pass by in an hour, dangerous substances are transported and air pollution is highest in the city- four times bigger than the allowed one. Apart from constructing flats, office space, hotels and sport centers, we plan to build the biggest park in Belgrade on 15 ha, the city beach...

You presented the decision of the second instance court as final. Still, the public prosecutor Strahinja Sekulić announced the intention to continue the legal battle in Supreme court of cassation?

If you read the explanation of the verdict, even non-experts will understand that public prosecution doesn't stand a chance. The revision in Supreme court of cassation doesn't postpone the High court's decision and the land will be registered to Luka.

The public prosecutor thinks that the dispute is still at an inception stage although it has been going on for 7 year?

It seems that he has unlimited time and money and that no one in the city government wonders how much it all costs although it is financed from the city funds. Clearly in Serbia it pays off to be unsuccessful. It is unacceptable to be successful even if it is confirmed by three court verdicts.

Mayor Đilas once said that the City will respect the court's decision. Did you ask him for an explanation because of prosecutor's announcement?

The mayor did say something along those lines and we believe that he will soon decide what's in greater interest for Belgrade - the development of this location or the new ten- year dispute. It is highly unlikely that after seven years and three lost cases the prosecution has better strategy and arguments than the ones they have already used. Besides, he said that if the City loses the next dispute against Luka, he will have new ideas for the future. Serbia has been caught in a populist trap and the government is no longer capable of merging national resources, private and state to put them together in a unique strategy. Everyone is doing their own business, "The city on barracks" is not developed by the investors, home or international, as is common practice but by the state. Our economy is slowly acquiring the quasi-communist form where private interest is supported only if it comes from abroad.

Did you speak to the mayor after this verdict?

We sent the report to mayor Đilas with the initiative to hold the meeting in order to discuss the preparation for the construction site. This is certainly a more beautiful project than the "City on barracks".

Was Luka a case of "rigged privatization" as the Anti-Corruption Council claims?

You probably refer to the situation when free shares were given to 4 479 citizens of Serbia. We didn't participate in that "rigged privatization" from 2000. Worldfin acquired its shares in Luka 5 years later by paying market price to the existing shareholders when no other investor was ready to offer more. That price was high even at the moment of purchase and today it seems to be astronomically high. To this day Luka has cost us more than 100 million euros.

The accusations stated in the criminal charge filed by the Council to the prosecution against 17 people for the abuse of authority seemed pretty sound?

Those accusations are popular in tabloid society which we are witnessing in Serbia today. To the experts they seem completely groundless. The real arguments have been publicly issued by the Share fund of the Republic of Serbia, Privatization Agency of the Republic of Serbia, Securities Commission of the Republic of Serbia. They are familiar with such expert issues since it is their domain. The Council doesn't have any experts in that field.

Verica Barać claims that you used the ad hoc company Worldfin to purchase Luka and its valuable land without competition and for a small amount of money.

I have never heard that someone intending to buy something at public auction would invite his competition to take part. Why would he do that? To pay more. The fact that no one participated in a public auction to buy the shares of Luka, only means that the price we offered was very high. Therefore it is not a small amount.

You are accused that in the sale of state shares in Luka at the lower price than the market one the state was damaged as well as minor shareholders for at least 20 million euros. If you calculate the market value of the land the sum is much higher.

The Council should know that the law defines the market price as it is applied in all modern countries. It is the price reached in an open market among the competitors. Market price is not the same as the estimated price. The price we paid entailed besides the value of the buildings the right of use over the entire land and above all the right of construction. What is the value of the land below our buildings and who would buy it? Or maybe we didn't even buy the buildings.

According to the Council's president, the last verdict of the High court was legally impossible because the court didn't recognize the contract from 1975 according to which Luka's land belongs to the city.

Yes, I read that the Council's president accused the High court of being corrupted. I don't want to comment of that.

Did you know about that contract when you bought Luka?

No, we didn't. Who could have known about the contract which had never taken  effect and was from 1975. We still couldn't accept it even if it reappeared after 30 years because someone wanted to take over construction land illegally as in the case of "Montmontaža". Now we have three verdicts in our favour which confirm that.

What is the exact value of Luka today? Are the estimates that it is around 2.5 billion euros true?

We would all be delighted if such a high price was true. Even more if someone came to offer it. That estimate unfortunately didn't come from the experts or the investors but was sensationally published in the media. Nothing has ever been sold for 2.5 bilion euros in Serbia, not even in the world. Serbia sold the entire national monopoly of NIS along with the buildings and oil plants for 400 million dollars. That nonsense caused derision among the experts but the politicians backed away. In politics it is more important to be popular than successful.

Since it is clear that the court saga will continue, what are your further plans for the "City on water"?

It is not located on the disputed land so it wasn't affected. What actually prevents us, apart from economic crisis, is the fact that the investors expect the state to support big projects. If we get their attention and if we join our efforts on an international real estate market we will certainly prove successful.

Did you file the request for conversion of the usage right into property right over the land and how much will you have to pay?

We are currently compiling documentation and we will soon file the request. The Tax Administration will estimate the price. We expect the government to carefully consider its policy of forming the prices. We will soon know whether it is investment- related or restrictive.

Do you plan to relocate Luka and where?

Luka Beograd lives solely from its revenue which is generated from port activities and we don't plan its relocation.  We are not authorized to build a new port and we will not take part in that.

We can often hear that many businessmen are trying to sell their companies and leave Serbia. How would you describe current business atmosphere? Are you also thinking of leaving the country?

Serbia is a nice place to live in but it is hard to work here. The created atmosphere doesn't approve of success but successful individuals are expected to make up for the losses of the unsuccessful fields of economy and especially when it comes to public companies. Above all, public responsibility for all the bad things in the country has been placed on entrepreneurs. I am convinced that it doesn't have a long-term perspective. At the moment I'm not thinking of leaving the country but it's getting harder to find the arguments with which I would convince my child to stay here.

We are not competitive

How do you see the existing effects of the Law on planning and construction, which some experts described as the revision of privatization?

We also see it as partial revision of privatization. It is bad when a small country like ours enacts the laws with retroactive force and on the other hand openly says that the economic growth directly depends on foreign investments. The world is looking at us through statistics and in terms of competitiveness we are very lowly ranked at the 96th place in the world. Unfortunately this law could put us even lower on the next year's list.

There is no nationalization in the EU

According to the Law on ports, port services and infrastructure will go in the hands of the city or republic and the private entrepreneur is reduced to the level of an operator?

Serbia needs the law on ports and we support its enactment as long as it follows the report of the EU port commission. Unfortunately, our law didn't solve the problem of ownership over port land and infrastructure. It is falsely claimed that Europe recommends that the land should be in state property. Has anyone heard that they nationalized port lands over there? No, because they haven't. Although we see it as another revisionist and retroactive law it could be convenient for us in the end. Luka constructed bank revetments and the port basin of 11 ha, the roads and the railway tracks with its own money. If the state wants to carry out expropriation according to the law, it should first pay fair market fee.