Only Luka has the right to construct

Belgrade 10. 05. 2009 Novosti Novosti

Only Luka has the right to construct

Luka was purchased legally.

The law stipulates that only we can build on the land on which there are the company's facilities. There is no mystery. We will continue to fight for that in court because that will be beneficial not only for us but also for the City and the people of Belgrade, says Ivana Veselinović, the president of Luka Beograd.

Is it true that the value of Luka's shares at the moment of purchase was intentionally reduced below every acceptable price?

It's not true. We supported market economy and we got it. The market price is formed by the supply-demand relation and not in the cabinet. Therefore, takeover bid is the strictest mechanism of company's shares purchase and the most convenient for the market. In the end, we paid more than any other bidders. We wouldn't offer more.

It is difficult to convince the public that large capital in such cases doesn't abuse its close link with high politics. Did someone whisper in your ear that the sale was under way or were you given other advantages in the process?

When you offer the highest price, you don't need any connections, only money, vision and courage. The rest are myths and illusions. The problem of our public opinion is that it is formed without control of the state authority and institutions. State institutions are not credible, nor are the people leading them concerned about it. In America no one will call Bill Gates a thief because he became enormously rich in a short period of time because everyone knows that American administration charged every dollar in tax and in that way guaranteed the legitimacy of his property and that he gained the money legally. That is not the case in Serbia. This is why hard work, talent and financial risk are not accepted as essential factors behind someone's success, but it is seen as corruption and having close links to the government.

If the people criticizing you accepted your evidence that the sale was legal and economically justified, how will you dispute what is attributed to you as the biggest "sin" that by purchasing Luka Beograd for small amount you obtained the usage right over city construction land of great value. Most of the citizens take that as injustice.

What sin? That is exactly why we purchased Luka. Only for that. We paid over 40 million euros for Luka and to this day we have invested over 50 million euros in it. What would be Luka's value without the perspective of construction?
And what would it be?
Somewhere below ten million euros. And why does anyone think that there is something to hide? It has been concluded on various occasions in the development plans of Belgrade starting from 1972 including the one from 2003, that the city will expand to the area which is currently used for storage and which belongs to Luka. Secondly, the city has always been aware of the port's limited development perspective in the city center and therefore from its foundation in 1961 Luka has never been a public company nor has it been classified as the company of public interest. It was privatized without special conditions when we didn't even take it into account. Luka has at its disposal around 300 000 m2 of legally constructed buildings and it is there sole user according to the Law on construction. Only Luka can build on that land and no one else. We are sorry but we can't abandon that right because someone wants to profit from us.

Therefore you didn't purchase it below the price as it is speculated and calculated?

We have invested around 100 million euros so far. When the conditions for construction are met we should pay the city around 880 million euros in fees for construction land, successively, following the construction over the years. There are also demolition expenses and land decontamination which require around 100 million euros. Overall around billion euros.

That will be, as you said, the most expensive land in Serbia?

No, the most expensive in the region.

It was claimed that the city was damaged for 2.5 billion euros in case of Luka Beograd. It seems that even mayor Đilas confirmed that. How do you explain this?

It wasn't like that but the process was clumsy. Also false and ignorant. 2.5 billion? Does anyone know any construction land that was purchased for 2.5 billion euros anywhere in the world? It hasn't happened yet. We should discard ignorant sensationalism. Recently there has been a similar sale at an auction in Milan which makes a nice analogy to Luka: the city of Milan sold the industrial steel complex "Falck" and reached the price of 350 million euros for 146 ha of land including construction land fees.

So how did we get to 2.5 billion euros?

Because the land of "Marina Dorćol" was taken as a reference and was calculated in ares, as was said in the TV show, as if it were an agricultural land for growing cabbage for instance. However if it is calculated correctly according to the right of future constructed area, "Marina" has reached the price of around 200 euros per square meter. Luka's square meter is unfortunately twice as expensive.

The Anti-Corruption Council issued a number of accusations towards Luka and the city authorities. They claim that you want to relocate Luka?

Port operations generate our income and we will conduct that business as long as we have interest. Those who consider it profitable can construct another port. We won't do it.

The Council's accusation is stronger if we take into account that it is the advisory body of the Government of Serbia and Prime Minister Cvetković. They both remain silent. Is that a sign of approval?

The Council issued a number of false claims that we will easily disprove in court. Two days earlier at the Survey Committee which was formed for this case, it became clear that the Council issued their accusations sensationally and without arguments, above all against the mayor. The agreement which was proposed to the city states the opposite. However, I don't understand how the mayor and his party can remain silent about such serious accusations which are entirely false. The public should be aware that there was no expert opinion of Public prosecution, Secretariat for property rights, Belgrade development public agency. If the mayor is proved guilty he has to bear the consequences, and if he isn't, the Government shouldn't allow such arbitrariness of the Council. This is not a way to build respect and trust in the state. They both backed down because they chose the path of least resistance, afraid of the populism which they brought on in the first place. As you see, in this case silence should be accepted as the sign of approval, so let them speak. We in Luka are calm because we are certainly right.

You say that you won't stop port activities. Can you then explain how you plan to keep them and realize Libeskind's "City on water"? It doesn't seem logical?

The "City on water" will be built in phases for several years according to the needs of the market. We are talking about 2.2 million of new square meters. Port services will continue because there is enough space for them on the land of around 80 ha. We will "sacrifice" storage facilities which we have more than enough for the port needs. In that way Belgrade will finally come to the 6 km long part of the Danube riverbank which is currently completely inaccessible to its citizens. Belgrade will also be freed from the great part of hard traffic which contributes to traffic collapse in the city center. But it seems that there are people who prefer warehouses.

What will you do if the city decides not to change the purpose of the land but to keep port activities?

If the mayor and authorized institutions change its purpose and don't create the possibility to urbanize this part of the city with plan changes and if the city gives up significant revenue, we won't give up. We will wait for a better government. The next one.

Lots of people found themselves in crossfire against you in public - Anti-Corruption council, Public prosecutor Strahinja Sekulić, the president of the Board for the prevention of conflict of interest...

It was more prominent in public than in the institutions. Too much careerism, too little professionalism. This is the second time that the Council tackles Luka. The first report compromised it in front of the experts. It is in court's hands now. The last two letters are similar, false, ignorant and unproved. We will take it to court because Luka is a serious business system and our business partners and banks expect us to defend our credibility. The Public prosecutor Mr Sekulić was free enough in his appearance on TV show "Utisak nedelje" ("Impression of the week") to publicly criticize and put the pressure on the District court because of the verdict that he didn't like. That was my biggest impression of the week. Nobody defended the court. Here no one defends the institutions. We were not the subject of the Board for the prevention of the conflict of interest because none of us is a government member.

For the third time

You claim that the City is using violent illegal means in trying to take away the right of ownership over Luka. You even call it an attempt of nationalization. Aren't those qualifications too strong?

It is not about Luka's facilities which we own. It can't be disputed. It is about the right of use of disputed land which has partially been built. This is currently in the hands of the District court. Since Public prosecution again failed to present the documents that the court found necessary in order to let the City be registered on the disputed land, I don't see what else could happen but that the City loses for the third time. That probably explains the Prosecutor's raised eyebrows and a higher tone. I hope that the court isn't frightened. We certainly aren't.

We are waiting for Đilas

What guarantees can you give us that there won't be dredges overnight and level everything to the ground in order to start building residential and office space?

I guarantee that we will bring dredges the moment that the City finally does what has been envisaged by the planning documents: removes warehouses and the traffic from the city center and starts investment activities. We are waiting for Đilas and his city administration to finally define their vision of Belgrade's development. To see if it is investment-related or populist. We like the idea about the bridges because it brings optimism. I hope that they won't stop there. What will happen to the waterfront, and not only the port?