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Who enabled the Chinese to take over natural resources in Herzegovina?

15/06/2022

Having in mind China's reputation for corrosive capital, and that their funding sources lack transparency and accountability, which is understandable because all finances come from one authoritarian regime, it is clear that China through its companies in some way buys the favour of some BiH politicians who favour them in mastering natural resources. Tomorrow, it can be used as a means of influencing political decisions in favour of the Chinese and their interests in BiH

In the euphoric mood and symbolic cutting of the ribbon, representatives of the Government of Canton 10, Livno and Tomislavgrad municipalities, as well as Chinese state companies China National Technical Import & Export Corporation and Powerchina Resources in December 2021 pompously announced the construction of Wind Farm “Ivovik”, with the power of 84 MW.

The companies CNTIC Capital CO Limited and Sinohydro Holding Limited from China are registered as the founders of WF “Ivovik”. A statement on behalf of the “investor” was given by Xin Xiao, who was introduced as the director of Powerchina Resources, although the company is not mentioned in the BiH Business Register. However, a person named Xin Xiao in the same register is now listed as the director of WF “Ivovik” ?!

By: Semira DEGIRMENDŽIĆ

Investors and their enthusiastic hosts have ambitiously announced that the construction of the Ivovik WF will cost 130 million euros and that it will start operating in 2023 ?!

 

Facsimile of the Register of Business Entities in BiH: Chinese Founders and in the Management of WF “Ivovik”

These days, Fokus visited the site of the Ivovik hill where the construction was announced, but we did not fall upon or find any trace or evidence that anything is being done to realize the bombastically announced investment.

We learned from several locals in the nearby settlement that they did not see anyone coming after the December ceremony, for whose needs a rich scenography was done on the hill.

Our attempt to contact the company WF “Ivovik” in Sarajevo and get information about it failed, because no one answers the available phone number for days, and the company does not have a publicly available e-mail address.

A Fokus source, who wishes to remain anonymous for now, claims that it is important for the Chinese to achieve their goals and get a concession, and that the construction contract with local institutions is secret anyway, and that their relations with many politicians in BiH are such to be given benefits that other and certainly more credible investors do not have.

HOW DID THE CHINESE GET THE CONCESSION AT ALL?

In order to understand the connection between the Chinese and the politicians who provided them with concessions, under extremely suspicious and unexplained circumstances, it is necessary to go back to 2008 when Ivica Matković, a member of the People's Party, won the concession for a wind farm in that area. At the time Matković's company received a concession for the wind farm, his brother Stjepan Matković was the Minister of Agriculture, Water Management and Forestry in the Livno Canton Government.

After that, Ivica Matković “gifted” the concession to his brother, who died in the meantime, and the permit for the construction of the Ivovik Wind Farm was inherited by his children.

The Chinese are frequent guests in the Livno Canton, but apart from signing the memorandum, there are no concrete investments

However, the company “Ivovik” Ltd. Livno moved its headquarters from Livno to Sarajevo a few years ago, and according to the Register of Business Entities of BiH, it is stated that the founders of this company for production and distribution of electricity are Ekrem Nanić, and CNTIC Capital CO Limited and Sinohydro Holding Limited from China.

It is an open secret that the Chinese paid Matković eight million euros to get hold of these concessions, our source claims.

HDZ'S RELATIONSHIP WITH THE CHINESE

– The Chinese have been preparing the ground for taking over the concession for the construction of WPP “Ivovik”, but also some other projects with meetings with Marinko Čavar, President of FBiH and Vice President of HDZ since 2015, says our source and adds:

– Although he (Čavara) in the position of President of the Federation of BiH has no authority over investments and concessions, he met with the Chinese several times. At one time, visits by delegations of Chinese state-owned companies to local officials, primarily Ivan Vukadin, who was a member of the HDZ at the time, intensified, but he continued to support the Chinese even after he was expelled from the party and became prime minister of Canton 10. These meetings certainly contributed to China becoming a partner country of the Mostar Fair in 2019, says our interlocutor.

We sent an inquiry to the Government of the Livno Canton, headed by Ivan Vukadin, about whether they are monitoring the construction of the Ivovik WPP and why the works, which were ambitiously announced at the end of last year, are late. We are still waiting for their answer and if we get it, we will publish it later.

Lokalitet “Ivovik” / FOTO: D. B.

What is evident from publicly available documents and photographs is that, when it comes to investing in renewable energy sources, especially in wind farms and solar parks in Herzegovina, so far, the Chinese have been the most interested, or at least the HDZ officials have provided the most information about meetings with Chinese alleged investors. Such numerous photographs testify to the meetings of Marinko Čavara, the President of FBiH, but also other officials with representatives of Chinese companies. During all these meetings, investments were announced that did not take place even after a few years.

However, probably counting on the “short-sightedness” of the BiH public and the fact that no one is dealing with alleged Chinese investments and their spontaneous takeover of natural resources in BiH, those whose interests are connected and coincide with China's often serve the public information that agrees with them.

Xiao Xin: A person of the same name also appears as the director of the Ivovik WF, a Chinese company that is not on the register of business entities in BiH

For example, in 2016, the media reported that a Memorandum of Understanding had been signed in Mostar between Gradina from Tomislavgrad and China Machinery Engineering Corporation (CMEC) and China-Africa Investment and Development Corporation (CAIDC) with the aim of building a wind farm in the municipality of Tomislavgrad, worth about 150 million euros.

The memorandum of understanding was signed by the director of the company “Gradina” Mate Dukić, the owner of the concession, and representatives of Chinese companies – project investors from CMEC and CAIDC (China-Africa Investment and Development Co.).

The signing of the Memorandum was also attended by the President of the Federation of BiH Marinko Čavara, who praised this project and thanked Chinese companies, then praises about this project were expressed by the then Prime Minister of Livno Canton Draško Dalić and the then Mayor of Tomislavgrad Ivan Vukadin, who is today the Prime Minister of Livno Canton.

Everyone then praised the success of these Chinese companies in the world and expressed confidence that the project will be realized quickly. But six years have passed, and this project has remained a dead letter.

All this is evidence of how unserious and unreliable Chinese investors are, and that in situations when they announce multimillion-dollar investments that BiH would benefit from, they are mostly “bound” by memoranda, but where they benefit and the benefits are exclusively theirs, then they seek to be bound by secret treaties and clauses that benefit them.

To date, it has not been clarified whether these Chinese companies have entered into a contractual relationship when it comes to concessions for this wind farm as well. However, these days the topic of building this wind farm has been brought up again, but under new circumstances and with new actors.

It was recently announced that the company VE “Gradina” wants to build a wind farm in Tomislavgrad and that it is in the process of obtaining an environmental permit, but now the Chinese and Mate Dukić are not mentioned as the concession owner, but Milenko Bašić, owner of the company “Lager” from Posušje. Bašić is known as a controversial businessman from Posušje and a suspect in the Krš-Pađen wind farm affair in Croatia, uncovered in 2020, in which a large number of Croatian officials were arrested, including Josipa Rimac, former Croatian State Secretary and former Knin mayor. The suspects were linked to favouring Bašić’s company in building the wind farm. Bašić hid in BiH from the Croatian USKOK, an Interpol warrant was issued for him, and he later surrendered himself, but to this day it has not been clarified how he crossed the BiH-Croatia border illegally and who helped him in that. The affair has not yet received a judicial epilogue, and it was reported by the US State Department last year.

However, all the negativities regarding Bašić are not an obstacle to the fact that documentation is currently being prepared for his companies in the federal ministries that will enable him to build a wind farm in Tomislavgrad.

As we have already written, although this investment does not mention the Chinese, but Bašić's companies “Lager”, VE “Gradina” and CEMP in Croatia, it is interesting that Bašić's connections with Chinese companies are very evident. Namely, Bašić's “Lager” in Posušje is, among other things, the representative of the world's largest manufacturers of construction machinery.

THEY ARE CLOSING THEIR EYES BEFORE CORRUPTION

However, it is even more interesting that Bašić's “Lager” has signed an agreement with the Chinese corporation China Energy on the construction of a 700 MW thermal power plant in BiH.

Three years ago, BaŠiĆ and his Chinese partners sent a letter of intent to the Sanski Most municipal authorities expressing interest in building a thermal power plant in the municipality, stating that it was “a potential investment of 2.3 billion KM”.

Marinko Čavara: The President of FBiH often gives support to alleged Chinese investors, but the results of cooperation are invisible

Bašić tried not to talk too much about this investment and the partnership with the Chinese. While it is evident that few want to say anything publicly about relations with Chinese potential investors in BiH, it is clear that there is much uncertainty about how Chinese state-owned companies, which in turn operate under Chinese government rules, get the right so easily for the use of our resources and why they are favoured in these businesses, that is, how they are actually enabled to trade in concessions. According to our source, well informed about the “Chinese investment offensive in BiH”, who himself was involved in some negotiations with the Chinese and only, he says, some agreements that are still in force oblige him to remain silent and anonymous, above all, the accounts should have been taken by state institutions.

– I must say that every investor is welcome. However, what is worrying, given China's reputation, in the sense that their capital is corrosive and their funding sources lack transparency and accountability and all of this funding comes from an authoritarian regime, is whether China through its own companies in a way buys the favour of BiH politicians who benefit them today in mastering natural resources, and tomorrow this can even be used to influence political decisions that work in their favour. It is high time that the state level, first of all, the Parliament of BiH, determine according to the actions and attitude of China in BiH. Because, so far, according to the alleged investors, many of whom have not even realized the announced projects, we have seen only a servile attitude of domestic politicians who should protect the interests of this country and its citizens, not China, according to the Constitution and laws. We testify that the European Union, to which BiH aspires, has received numerous criticisms of various Chinese initiatives in Europe, in terms of respecting EU rules, and in BiH, no one takes this into account, but information about alleged Chinese investments, which are mostly credit debts and the rights of Potemkin's villages, is being made public. And that is why it is astonishing that everyone is turning a blind eye to the well-known fact that secrecy, lack of transparency and corruption are mostly the way Chinese companies do business, which can only further affect the already rampant corruption in BiH – concludes our interlocutor.

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