- The written statement of the director of SE Trebinje 1 was sufficient to approve the transfer of the concession from Elektroprivreda RS
- The company SE Trebinje 1 was given to the management of SNSD personnel in Trebinje
- Problems have arisen in Hungary with the business operations of the businessman who is supposed to build this solar power plant
The written statement of the director of “SE Trebinje 1” Milutin Mastinović was sufficient proof for the RS Commission for Concessions to determine that this newly established company with three employees and 800 KM in revenue has the conditions to realize the concession for the solar power plant project worth 100 million KM.
This is evident from the documentation that Transparency International in BiH, after a prolonged legal battle, received from this Commission, which was supposed to approve the transfer of the concession from Elektroprivreda RS to “SE Trebinje 1”, in which the majority share was taken over by the Hungarian investor LUGOS Renewables (LREN). It was evidently a way to bypass the obligation of issuing a public call as the legal possibility was used to grant the concession to Elektroprivreda RS as a strategic public enterprise.
However, this company did not intend to build this project, as just ten days later, ERS established the company “SE Trebinje 1” at its address, to which the concession was first transferred, and then 70 percent of that company was transferred to the Hungarian company LREN.
Before approving this combination, the Commission, as a regulator, had to, according to the regulations governing this area, examine the financial condition of the new concessionaire “SE Trebinje 1”, as well as evidence of its technical equipment, previously performed works, and evidence that it has secured financial resources.
What Were the Proofs?
Initially, the Commission did not approve the transfer of the concession and requested that according to “Regulations on the procedure for transferring concession contracts” the documentation be supplemented and proof of the technical equipment of the new concessionaire be provided, which in that year 2021 had three employees and the mentioned revenue of 800 KM.
After that, the director SE Trebinje 1 Milutin Mastilović in April 2021 submitted a statement, and in just a few sentences stated that he does not possess equipment for the construction of the solar power plant but that in the future period, through public procurement procedures, he will “secure all necessary technical equipment.”
Following this statement, the Commission considered that all conditions were met and on May 21, 2021, issued a decision on granting the rights to this concession to the newly established company. The decision briefly states that all documentation was reviewed and without any argumentation concludes that the “financial condition of the acquirer” which has financial resources was considered.
Such a decision by the commission is questionable because no proof was offered that ERS, for justified reasons, cannot realize this project, while the newly established company can. Likewise, the director’s statement that he will in the future make procurements could not be taken as proof on which the decision was based, because the mentioned regulation clearly states that the concession acquirer must “have technical conditions,” not that they “will have” in the foreseeable future.
Who is Milutin Mastilović?
The company “SE Trebinje 1” was initially given to the management of young members of the Trebinje SNSD. Milutin Mastilović, a councilor of the SNSD in the Trebinje city assembly, was appointed as acting director, who was legally in a conflict of interest, as at the time of appointment it was a public company and as a councilor, he could not simultaneously perform both functions.
Mastilović has been a councilor of the SNSD in the Trebinje Assembly since 2016, and according to media reports, he entered the solar power plant business and received a Certificate from the Regulatory Commission for Energy (RERS) for his first small solar power plant (MSE).
Maja Kolak was appointed as the executive director for financial-economic and legal affairs of SE Trebinje 1, who, according to media reports, was the secretary of the city election headquarters of the City Board of SNSD. It should be emphasized here that at the time of her appointment it was a public company and the Law on Public Enterprises states that members of the executive bodies of the party cannot hold positions in public enterprises.
However, this law has long been openly violated, considering that the general secretary of SNSD, Luka Petrović, is at the head of ERS itself.
Case Study
The project for the construction of the solar power plant in Trebinje has been accompanied by numerous controversies from the very beginning, and TI BiH has already pointed out that the Hungarian investor was introduced into the business by bypassing the law and public bidding. In addition to the mentioned dispute with the RS Commission for Concessions, it should be noted that TI BiH could not obtain information from Elektroprivreda RS, which hides the conditions under which the majority ownership of SE Trebinje 1 was transferred to the Hungarian investor.
Meanwhile, problems have arisen in the business operations of companies owned by businessman Roland Lugos. In Hungary, the liquidation of his company Optimim solar ZRT was ordered, which was one of the largest players in the solar energy market, and the issue of collecting government bonds invested in this company has also arisen. His company
TI BiH has published a study of this case which indicates the existence of a broader problem in the field of concessions, where the introduction of a foreign investor under non-transparent conditions often has negative consequences for the public interest.
For example, in the case of the Bistrica Hydroelectric Power Plant, the concession was also granted to ERS, under the same pretext that it is a strategic project of a public enterprise. Then the concession was transferred to a newly established company, which was sold to the controversial company Kaldera company from Laktaši.
Everything was done for 6.8 million, and the same concession was eventually repurchased for 10.6 million KM. In addition, through non-transparent public contracts with potential investors, Republika Srpska has already suffered significant damage reflected in hundreds of millions of KM that taxpayers are paying today.
The company SE Trebinje 1 is now majority-owned by the Hungarian Lugos Renewables (LREN) and the mentioned solar power plant has not yet been built, although the original deadline from the concession contract expired in October 2022. The latest published information is that the Hungarian investor has submitted a request to approve an increase in the power of the plant. At the end of December 2024, a request for a preliminary environmental impact assessment was submitted to the Ministry of Spatial Planning, Construction, and Ecology of RS.
