FBiH Government: Neither the millions, nor the building

Tuesday July 9th, 2013
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The government was late in terminating the contract on the buying of land in Mostar and it will not recover 3 million KM that it had paid for it.

Hotel Hercegovina

Along with the selling price of the ruin of Hotel Herzegovina, the FBiH government paid also 150,000 KM of tax on the transfer of real property. (Photo: CIN)

By The Center for Investigative Reporting
The Federation of Bosnia and Herzegovina (FBiH) governments failed in its attempt to cancel a bill of sale agreement and recover 3 million KM that it paid for the ruins of Hotel Herzegovina in Mostar at the end of 2007. The deadline for the termination of the agreement expired a year after the signing which was a long time ago.

The government bought the land of 1,639 square meters from the family-run firm of Ante Vidačak, a member of Croatian Democratic Union. The government planned to clear off the hotel debris and construct a 10,000 square meters office building to house the FBiH agencies. However, five years later it is still waiting for a construction permit.

Local authorities have blocked the construction until outstanding property claims of the owners of two private apartments within the Hotel were to be resolved. The apartment owners have asked for over 330,000 KM in compensation funds according to Supreme Audit Office’s 2012 audit of the FBiH government’s Joint Affairs Department. This government agency takes care of the government’s real property issues.

The report read that in 2011, the FBiH government requested an investigation into whether it was legal to buy the Hotel’s ruins and it set up a Commission made of the representatives from three government agencies to take steps toward the termination of the contract and the recovery of the money.

The Commission found that the buyer could not have known about the land’s legal issues because the seller neither disclosed them, nor were they recorded in the land register. The commission also informed the government in April 2012 that the exit clause deadline has run out years ago.

The auditors did not find any records that would show that the FBiH government has looked into the Commission’s finding and acted upon it.

The Center for Investigative Reporting wrote in 2010 about the buying of the Hotel Herzegovina ruins and the fact that the FBiH government has spent millions on the rent of offices in Mostar and Sarajevo while it’s Joint Affairs Department has been ignoring the auditors’ recommendations to do an inventory of the real property in owned by the government.

Published July 10, 2013.

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The Center for Investigative Reporting in Sarajevo (CIN) work is available for free to all organizations that credit CIN as their source and link to www.cin.ba.

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