Six years after the end of the war, much of the road network has been repaired. Attention is now turning to restoring the railways and bringing telecommunications into the modern age
econstruction
of road networks, telecommunications systems and other infrastructure
has been the priority since the end of the civil war to help Bosnia
and Herzegovina to revive its battered economy.
The damage to bridges made much of the road system inaccessible. Replacing
or repairing the highways went to the top of the list under the $5.1
billion national reconstruction programme funded by Western donors.
The task of rebuilding the roads has fallen to building and civil engineering
firms such as Sarajevo-based Bosnaputevi.
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General
director of the company, Muhamed Gavrankapetanovic,
says it was “devastated to a large extent” by the war. But
when peace came Bosnaputevi won contracts for projects under the national
reconstruction programme.
Since then it has regained some of its former presence. “We emerged
as one of the companies that carried out most of the works in the transport
sector,” says Mr Gavrankapetanovic.
Bosnaputevi’s biggest undertakings have included the reconstruction
of Sarajevo airport and the highway linking the capital to Zenica. Some
schemes were carried out with the support of US aid.
“Through
the construction of these projects we succeeded in building the firm
up again,” he says. “Today, the company is again among the
best-equipped, leading companies in the sector.”
Founded as a state-owned enterprise in 1968, Bosnaputevi was privatised
last year. “We are now a corporation with shareholders and have
established the conditions for further development,” says Mr Gavrankapetanovic.
“We have complete freedom in terms of creating development programmes,
making decisions, looking for jobs, connecting with foreign firms, making
business connections and seeking strategic partners.”
Bosnaputevi
has carried out projects elsewhere in the former Yugoslavia and hopes
to win back the Middle East business it lost. “We are trying to
regain our pre-war market position, both here and abroad, especially
in the United Arab Emirates,” says Mr Gavrankapetanovic.
He sees parallels between the position of Bosnaputevi and that of the
country as a whole. “Our biggest problem is the financial situation,”
he says, highlighting the openings awaiting potential investors.
80
per cent of the rail system was put out of action
“It would
be a good challenge and opportunity for foreign investors to start a
significant business here – one that would yield a substantial
profit in the end.”
Six years after the end of the war, much of the road network in the
country has been rebuilt and attention is turning to the railways, which
were even more severely damaged. According to some estimates, as much
as 80 per cent of the system was put out of action and only limited
repairs have taken place so far.
The chief cause of the delay is the high price that will have to be
paid to get the railways back in service. The cost is estimated at $1
billion – a sum the country simply cannot afford.
The
telecoms industry has required reconstruction and modernisation and
is moving towards privatisation. Three firms operate telecoms systems,
two in the Bosniak-Croat Federation and one in the Serb Republic. PTT
BiH, based in Sarajevo, covers most of the federation, while HPT
Mostar is centred on Mostar. Telekom
Srpske, based in Banja Luka, serves the republic.
The privatisation agency of the Bosniak-Croat Federation has named PTT
BiH and HPT Mostar as candidates for a fast-track sale. PTT BiH, as
the biggest of the three telecoms firms, has been given a market valuation
of about $322 million, while the state’s 69 per cent stake in third-ranking
HPT Mostar is put at $82 million.
Officials
have talked of issuing an international tender in February, but PTT
BiH and HPT Mostar are supposed to split off their postal services as
separate operations before the sell-off can go ahead and this could
cause delay.
Meanwhile, the likely fate of Telekom Srpske, the second-largest operator
in the country, is even less clear, even if all the signs point towards
privatisation.
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The
government of the Serb Republic has unveiled plans to liberalise the
tele-coms market. “In six months we expect to get real competition,”
says Telekom Srpske general manager Zeljko
Jungic. “We have always taken competition seriously,
from the very beginning of this company, and have always tried to make
our prices competitive, especially since the citizens of big cities
like Sarajevo and Mostar can now become our customers.”
There appears to be plenty of growth potential in the domestic market
as well. Although Telekom Srpske, which still holds a monopoly in the
Serb Republic, has won more subscribers since 1995, fixed-line penetration
is still low at around 20 per cent, while that of mobiles is only 10
per cent. In a population of 1.5 million, Telekom Srpske has around
220,000 fixed-line customers and 150,000 mobile subscribers.
Mr
Jungic believes most growth will occur in the mobiles market, in which
he expects Telekom Srpske to have 300,000 subscribers by the end of
this year.
Just how much of the market goes to rival operators remains to be seen.
Five companies have posted bids for a third GSM licence, put up for
tender by the Communications Regulatory Agency (CRA) in Sarajevo.
The licence was priced at a low $879,500 in what was seen as an attempt
by the CRA to attract interest from foreign investors. Bidders include
relatively big regional players such as Hrvatski Telekom of Croatia,
in which Deutsche Telekom has a 35 per cent interest, and Turkish conglomerate
Rumeli.
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