BOWING TO INVESTORS 'Handing Over Gacko to a shady company'

The authorities in Gacko are determined to transfer ownership rights of nearly 62 thousand square meters of land, along with the barracks building in Avtovac, to the Republika Srpska Chinese company “SolarWin”, registered in Banja Luka. Despite the company having no employees or business activities, the authorities in Gacko are confident that it will bring new jobs, so they are willing to disregard their own decisions.

Member of Parliament Vukota Govedarica alleges that the reason behind this is the involvement of Veljko Vukelić – a close associate of Milorad Dodik – and that the authorities in Gacko are simply carrying out orders from Banja Luka.

The system is adjusting for investors

At the last session of the municipal parliament in Gacko last year, Mayor Ognjen Milinković began by announcing the arrival of investors who would build a solar power plant and a solar panel factory. It was said then that this would solve the problem of the abandoned barracks building in Avtovac, which is slowly deteriorating. The factory would occupy 5 thousand square meters, with the investment estimated at 3.5 million marks.

At the next session, at the end of February, a decision was presented to the council defining the conditions under which municipal property could be transferred below market value or given as a gift.

It was stated that the investment should amount to at least five million marks and employ at least 30 workers. Additionally, the investor must submit an investment elaboration – a document containing not only a brief overview of the project and information about the investor but also employment plans, economic-financial projections, investment plans, project success analysis, project conceptual design, and the latest balance sheet and performance.

This decision also envisages that when the mayor deems these conditions fulfilled, a decision on determining a special interest shall be requested from the Assembly, based on which the implementation of the investment project will be initiated.

A month and a half later, a decision was presented to the council on determining a special interest, which would transfer ownership rights over nearly 62 thousand square meters of municipal land to the company “Solar Win” without compensation, to build a solar panel factory on that site.

“This is not a sale, this is not a gift”, said Mayor Ognjen Milinković, determined to attract investors and stimulate development.

“The contract will protect the municipality. Let's set aside politics and focus on the people. Let's find common ground. In the contract, we will clearly outline what must not happen. Let's make life easier, better, and more beautiful for the people. Let's transform the Avtovac facilities, which currently look terrible, into something good. They must provide a bank guarantee of 2 million as compensation. Let's move towards development, not hinder it”, Mayor Milinković convinced the councillors.

“This is of special interest not only to Gacko but also to the wider region. Considering the economic situation in the municipality, the opening of any production capacity represents significant progress, especially if it is export-oriented, which is in the general interest and something each of us should support and strive to initiate here. The decision does not transfer ownership but creates conditions for further procedures. The decision is just the first step”, emphasized Milinković, repeatedly stressing that municipal interests will be protected by the contract.

In order to hear what SolarWin has to say and what their plans are for Gacko, we called the phone number listed in the Business Entities Registry of APIF. A person answered the call and initially stated that it was a private number. Upon our suggestion that they might need to take action because the number is listed in the official registry, the gentleman who answered introduced himself as lawyer Miloš Aleksić, who had previously registered that company. When we asked if we could obtain information about the company and references, he said that he had not been in contact with them for more than two years and had no information.

“The Municipality of Gacko will request a bank guarantee for the full value of the estimated real estate, specifically 2.13 million marks. We must bear in mind that these properties have been neglected and in ruins for 25 years. If the investor does not respect the provisions of the contract, the Municipality of Gacko will activate or collect the bank guarantee, and the land and all real estate will revert to the ownership of the municipality. So, we will not give anything away without protecting ourselves”, emphasized Milinković, adding that the investor will cover all fees. He guarantees transparency throughout the investment by having a commission composed of experts from various fields monitor the implementation and periodically inform the assembly.

“If the commission determines that the terms of the contract are not being respected, we will terminate it and collect the guarantee”, Milinković asserted, adding:

“This Municipal Assembly, the councillors sitting here, can be remembered as the people who, after 45 years, contributed to the opening of a factory in Gacko”.

Solar in the mist

Vukota Govedarica, a member of parliament from Gacko, does not share the mayor's optimism. He claims that it is a shady company backed by Veljko Vukelić, a close associate of Milorad Dodik and that everything is happening under directives from Banja Luka.

“I believe that the decision made is unlawful because it is not in line with the previous decision of the Gacko Municipal Assembly, and the moment it is adopted, there is no doubt it will be adopted because a directive has come from Banja Luka, we will initiate a review of the legality of this document before the Constitutional Court of Republika Srpska”, Govedarica categorically stated and expressed doubt that the investor has provided documents on the basis of which it is possible to adopt a decision on a special interest.

“We hear that the document is about 10 pages long, that it is not numbered, that there is no memorandum indicating which company prepared it, that there are no signatures, and that there is no seal. I believe that the councillors should have seen an analysis justifying why there is a special interest in accepting this investment endeavour by the Gacko councillors”, explained Govedarica.

Shared residence - 'Natalija' Apartments

The company set to build a modern factory for solar panel production in Gacko was founded with an initial capital of 5,000 marks in 2021. The owners are Dragan Čigoja, Hui Čen, and Dragomir Menićani. They not only share ownership of the company but also a residence. Namely, the registration resolution states that Menićani and Hui Čen reside at the “Natalija” apartments in Banja Luka.

“SolarWin” is registered for 84 activities – from ceramic production, machine tools, and locomotives to hotel management and catering services.

According to data from the business portal Akta, the founder, or the first owner of “SolarWin”, is Veljko Vukelić, who is publicly claimed to be a close associate of Milorad Dodik.

For Govedarica, Vukelić is the one officially presented, but behind the scenes, he manages the company.

“They founded the company at a non-existent address, they don't have a pencil, they don't even have a chair, they have nothing anywhere. In 2021, their total revenue was zero marks, the average number of employees zero, and that's why they didn't provide data, and that's why it's a business secret even though the decision says they must provide a profit and loss statement”, says Govedarica, adding that similar operations without revenue and employees continued in 2022. In that year, they were 40 marks in the red, owing some state taxes. In 2023, they had zero revenue, a loss of 1,682 marks, and an average number of employees zero.

“We have Čigoja, Hui Čen, and Menićani, and behind them is Veljko Vukelić, the best man of the president of the Republic, who wants to invest in Gacko. They have no employees,they are registered in Banja Luka, and they live in Belgrade”, summarizes the ownership structure.

Investing with closed eyes

Despite the opposition's insistence, Mayor Milinković did not allow the public, not even the councillors, to have access to the investment plan and analysis, which, according to the municipal decision, preceded the declaration of general interest. Instead, they expect people to trust their word that everything is fine, citing that the investment will contribute to reducing unemployment, creating new jobs, and stimulating “economic development and social progress”.

For the municipal authorities in Gacko, it was not problematic that the document provided by the investor states that the “balance sheet and success are business secrets that cannot be disclosed to other parties”.

MP Vukota Govedarica sees the biggest danger in the fact that planning documents are tailored to the investor, rather than the other way around, and that everything depends on the investor.

“The moment the accompanying facilities are slightly improved and obtain usage permits, at that moment Hui Chen will be able to mortgage all of this, and take a loan through political connections; at that moment, IRB will likely get involved, as it has done before, and spent 180 million marks without return. At that moment, Hui Chen, Menićani, Čigoja, and the godfather will take what the bank gave and go their separate ways. They will leave us with an empty guarantee with zero marks”, predicts Govedarica, outlining the situation's development and pointing out that the Municipality of Gacko is obliged to obtain the consent of the Ministry of Defense of BiH, which, otherwise, could sue them.

“In the end, we will be left empty-handed and will have to pay for everything”, Govedarica fears.

After the majority in the assembly adopted the decision to determine special interest, it remained to draft the contract and obtain the approval of the RS Legal Office, and then for the councillors to express their opinions.

The final word will be with the councillors. The authorities in Gacko seem determined to sign the contract with the investor at all costs before the elections, during the term of this assembly.

“Our” Chinese

Little is known to the general and business public about the three owners of “SolarWin”. In this regard, it can be said that they justify the practice associated here with Chinese investments and companies – contracts are hidden from the public, and inspectors avoid them. The business portal Capital.ba reported that the RS Inspectorate only inspected one Chinese company in five years and found that it only lacked a Risk Assessment Act for

workplaces. All Chinese companies in RS are connected and operate under the control of the Chinese state.

In the Federation of BiH, hundreds of Chinese companies have been established, and some of them owe more than half a million marks in taxes, wrote the portal Fokus.ba.

“Chinese economic influence is quite specific because it is marked by geopolitical influence and overlaps, making it difficult to see that line. China has a range of geopolitical interests linked to the economic sphere. This is happening in BiH as well. Unlike the 2000s, when trade was the focus, it is now mostly shifting to large infrastructure projects, such as energy and road projects, etc. Certainly, not only in BiH but also in the region”, assessed economic expert Admir Čavalić for Fokus.