Report on BACID Activity. Capacity Building for Investment Attraction in the Canton Sarajevo

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1 Report on BACID Activity Capacity Building for Investment Attraction in the Canton Sarajevo SA Consulting GmbH in cooperation with the Ministry of Ecenomy, the Chamber of Economy of Sarajevo Canton and the Municipality Ilidža organized a three-day seminar/workshop event on the topic: Building Capacities for the Investment Projects in Sarajevo Canton. 'The event was carried out in the period from 09. to 11. March, at the premises of the Municipality Ilidža. In total the Event had more than 30 participants over 3 days. For details on the Agenda please refer to Annex 1 a to this Report During the preparations for the realization of the seminar, Chamber of Economy of Sarajevo Canton, according to the signed contract, performed a series of activities: Introduction speeches at the beginning of the seminar have been given by the Major of the Municipality Ilidža Mr. Senaid Memić, the President of the Chamber of Economy of Sarajevo Canton Mr. Muamer Mahmutović, the Head of the Austrian Trade Mission in Bosnia Herzegovina Mr. Sigmund Nemeti and Mr. Gerhard Sabathiel from SA Group. During the first 2 days several lectures related to investment opportunities have been held by Gerhard Sabathiel, the General Manager of SA Consulting GmbH from Austria and Aldin Ćelović, the representative of the SA Consulting GmbH for the Western Balkans. The lectures covered the following topics: - Investment Preparation Approach - Bank Institutions and Financing - PPP Introduction - PPP Preparation - PPP Structuring - PPP Implementation 1

2 For detalis to the presentations please refer to Annex 2-7 to this Report The Third day of the seminar/workshop was focused on th eintroduction and discussion of concrete planned investments and included a visit to the industrial zone Famos, in the Municipality of Ilidža. During the morning session the Municipality of Ilidza introduced the following investment projects: 1. Tram Project Ilidza The Tram project is directly related with Civil Zone Butmir. With the realization of the Project the tram could additionally link the Industrial Zone FAMOS. There are plans to use the tram tracks during the night for the transport of material from / to the Industrial Zone FAMOS. Next steps are final Feasibility Study, as well as Business plan, and final negotiation with potential investors from Czech Republic. 2

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4 S - Strengths Political willingness Profitability in combination with other services possible Location as the Area is situated around the airport W - Weaknesses Very limited public funding available Hugh investment amount for public transport project needed Missing experience in the public sector to develop such a complex project structure O - Opportunities Develop additional businesses and services inside industrial zones Chance to develop the project based on a PPP model Growing demand of transportation in the area Accessibility of the area supports development of whole location incl. industrial zones Creation of jobs T Threats Necessary investment amounts High investment Very limited PPP experience Limited access to financial sources Complex project structure 4

5 2. Cable Car Project The Cable Care project shall create a direct link from the City to the Olympic Mountains. The projected investment amount is calculated with EUR 10 Mio. 5

6 As next steps a Feasibility Study as well as a Business plan shall to be finalized. Based on that direct negotiations with potential investors from Germany, Italy and Switzerland shall start. S - Strengths Early stage of project Profitability in combination with other services could be possible Importance of project for development of tourism in the area Would avoid cars in the national park areas W - Weaknesses Big investment Complex PPP model required Lack of expertise with similar projects Competitive market Weather dependence and climate change issues O - Opportunities Develop additional business and services for the whole region Tourism industry development Creation of jobs in the region Establish a direct link to the City T Threats Large investment for the area needed Winter tourism dependent on Weather conditions Climate change issues Tourism Competition needs investment in whole infrastructure 6

7 Municipality Ilidza Industrial Zones The Municipality Ilidza contains several zones. At the moment it also has two Civil Zones under construction. One of four industrial zones, FAMOS, is totally privatized. The zone contains approximately 60 companies representing different businesses and industries with around 700 working people. A Second industrial zone, Energoinvest, is under construction, just one small part is already in use. Owner of this industrial zone is Energoinvest JSC, established in a mixed scheme of public and private shares. For this industrial zone, municipality and Energoinvest are looking for a potential investor to establish an industrial zone according to international standards. At the moment there are negotiations with potential investors from Czech Republic, Germany and Austria ongoing, but no real movement. The third industrial zone Blazuj Bosanka, is currently under development. Owner of the land and the industrial zone is the Municipality of Ilidza. The municipality is looking for potential investors. Some facilities have been sold to private companies already. At the moment HETA ASSET RESOLUTION BIH sells some facilities in this industrial zone. In cooperation with Canton Sarajevo, FIPA Foreign Investment Promotion Agency, and Chamber of Economy of Canton Sarajevo promotes this project trying to attract investors and to create an attractive PPP model structure in order to finish the project. The fourth industrial zone, Vreoca Plandiste Vrelo Bosne, exists only as a project idea. The Municipality of Ilidza as owner of the project looks for potential investors. At the moment the project documentation needs to be finished. 7

8 Annexes Annex 1: Agenda of the 3 day seminar/workshop Annex 2: Presentation on Investment Preparation Approach Annex 3: Presentation on Bank Institutions and Financing Annex 4: Presentation on PPP Introduction Annex 5: Presentation on PPP Preparation Annex 6: Presentation on PPP Structuring Annex 7: Presentation on PPP Implementation The Action is funded by the Austrian Development Agency (ADA) through the BACID grant scheme (Building Administrative Capacities in Danube Region & Western Balkans), managed by the Austrian Association of Cities and Towns (AACT) and KDZ Center for Public Administration Research. Disclaimer: This publication/document has been produced with the assistance of the Austrian Development Agency (ADA). The contents of this document are the sole responsibility of the author/s and can in no way be taken to reflect the views of ADA nor the Austrian Government. 8

9 Pictures taken during the Event 9

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