Leading construction company that “rose from the dust”
GENERAL MANAGER URGES U.S. INVESTORS TO COME TO BOSNIA AND HERZEGOVINA FOR BOTH BUSINESS AND ALTRUISTIC REASONS: OPPORTUNITIES TO REBUILD THE COUNTRY'S INFRASTRUCTURE ARE NUMEROUS

The three year civil war devastated Bosnia’s communications infrastructure, leaving bridges, roads, airports and a railway system in chaos. A pivotal role in the recovery is being played by the contracting company Bosnaputevi, founded in 1968 and a cornerstone of the infrastructure sector for the past 35 years.

IN COMPETITION with 26 companies, Bosnaputevi won the tender to rebuild Sarajevo’s airport.

Pre-war Bosnaputevi had up to 3,000 staff and plenty of work. “We constructed all kinds of roads, first, second and third class highways, airports, bridges and tunnels,” says their general manager of 17 years, Muhamed Gavrankapetanovic, who has a degree in Civil Engineering and an MA in Technical Studies. The war temporarily put a halt to business but today it has re-emerged as a leaner private limited company with just 300 employees who are all shareholders and own 75% of the assets.

“We managed to rise from the dust and are very proud of that,” he says. “We recovered the leading position and acquired many of the fast construction projects financed by USAID and the EU.” The biggest coup, won in the face of 26 competitors, was to reconstruct Sarajevo airport. He also aims to start rebuilding bridges, using pre-cast concrete elements, and constructing Bosnia’s first real highway. The company owns quarries and land where it can organize processing and material.
Mr. Gavrankapetanovic is concerned with the question of refugees, of whom he estimates a million are still displaced. “They need to come back to their homes, live together, work and build up the country,” he says. Their return, coupled with the already high unemployment rate, is a double incentive for U.S. investors to come and make use of the low cost local work force and resources. “They can do business and help Bosnia at the same time,” he says.

MATAN ZARIC General Manager of Elektroprivreda Herceg-Bosne

The war also seriously damaged the energy infrastructure as transmission facilities and interconnection lines were hit. After the war, the country’s original single vertically-integrated state-owned power company was replaced by three vertically-integrated electric power utility companies with specific service territories.
Prominent among them is the Mostar-based Elektroprivreda Herceg-Bosne, a nine-year old limited liability company whose activities range from power generation and distribution to building and maintaining the power facilities and network. Its 1,700 well-qualified staff supervize the regular supply of electricity to 160,000 customers in 36 Federation municipalities. Currently the company generates 1,500 GWh and consumes 3,000 GWh. “So we have to import 50%, this year from Switzerland,” says general manager Matan Zaric.

Various projects are attempting to remedy this. “We constructed all five power plants which are operating now as well as a large part of the distribution and high voltage network,” says Mr. Zaric. “I am particularly proud that the construction of a hydropower plant at Péc Mlini, the first in the Balkans since the war, has begun.”
Elektroprivreda is now working on the reconstruction of the 400kV network and associated sub-stations. So far, the telecommunications part of this program has been launched and the company is preparing the project for transmission lines and sub-stations with the World Bank. “The reconstruction of this network is important not only for U.S., but for all southeast Europe,” says Mr. Zaric.

In conjunction with a U.S. consulting company, Elektroprivreda is preparing the privatization of the sector, which should be implemented early next year. “Consumers will be able to buy cheap electricity. The monopoly will be broken,” he says. “It is the right time to search for strategic partners.” He has been negotiating with English, Spanish and German companies and discussing re-investment with the U.S. “In my opinion the process of privatization is inevitable and U.S. capital should participate in this process,” he says. “We are open for business.”