Siniša Mali, Mayor of Belgrade: We did the impossible

The city’s debt is under control, we have 500 active construction sites, and we are very agile in issuing building permits and implementing projects. All of the aforementioned have made Belgrade a desirable location for investing and creation of new jobs. Many international partners are participating in the transformation of our city which commenced with the construction of the Belgrade Waterfront

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By getting its own credit rating Belgrade has proven that it has enough discipline to manage its own finances which has additionally spurred investors on. In 2017, a financial plan for six large-scale projects will be drafted, and the construction of a new bus station will commence, as will the reconstruction of the Sava Centre. The project partner for the latter will be chosen next year too. The investment momentum is accompanied by serious planning activities, primarily through public-private partnerships for which Belgrade has hired the IFCas an adviser.

Did the Belgrade Waterfront project draw in other investors to Belgrade? How much progress has been made on this project?

— The Belgrade Waterfront has instigated many things in the city that have been at standstill for decades. Apart from now having cranes instead of old shacks in that part of the town, we are also going to build the required infrastructure up to the project’s geographical border which, again, is something that has been waiting for decades to be done. There are several hundred very dilligent workers on the construction site and they are working very hard on completing the facilities envisaged in the first stage of the project. Of course, other potential investors have noticed the changed investment environment in the city and have expressed a wish to invest here. Naturally, our doors are always opened to them.

How important is the adoption of the General Spatial Plan for the investment community?

— After many years, Belgrade has finally become a good investment destination. At the foundation of this is the adoption of the planning documents which cur- rently cover exactly a half of the city’s territory. This was a huge and very important job because now we know exactly what we can offer to investors. Back in the day, they had to wait for years to be issued with permits. For instance, we have issued IKEA with a permit for construction of their department store in two days flat. By adopting a serious approach to investors, we have resolved the problem which, ten years ago, seemed unsolvable. To corroborate this, I would like to say that Belgrade has become the city of cranes with 500 active construction sites all over the city. More investors means stronger construction industry, more jobs and a city that is more beautiful and more contemporary.

Considering that you often talk to the EBRD, EIB, KfW, Chinese companies and other investors, could you tell us what projects are closest to implementation in terms of having already prepared financial plans and commencement of works?

— The final decision regarding the financial resources for construction of a waste water filtering facility and the completion of an interceptor will be made in early 2017. Possible sources of financing could be either a loan from Japan or KfW, and we are also negotiating with the Chinese investors about their financial terms. Tenders for formation of public-private partnerships (PPP) for replacement of street lights in suburban areas and assigning concession for six underground garages in downtown Belgrade, for which several financial institutions have already expressed readiness to provide funding, should be launched in the same period. Of course, all major international financial institutions are also going to fund the public-private partnership for the landfill in Vinča which will be forged in spring 2017. Last but not least, we have already achieved a preliminary agreement with KfW regarding the construction of a heating system that would run across the Gazela Bridge and a cogeneration facility in Voždovac. So, all in all, we have a total of 6 largescale projects for which we are going to have a financial structure in place in 2017. Furthermore, in the same year, we expect the construction of the new bus station in the Block 42 to start. This project will be implemented together with the company Beogradska Autobuska Stanica a.d. Also, we expect the reconstruction of the Sava Centre to start in 2017. We will have chosen a project partner for this endeavour by early 2017. Both projects will be fully funded by our project partners.

Considering the IFC’s advice, which projects did the city government choose to be implemented via PPP?

— The IFC is our adviser on PPP project regarding the Vinča landfill which is one of the worst landfills in Europe. Then there is the question of funding of the construction of the main sewage system and waste water processing facility in Veliko Selo, as well as establishing the Energy Efficiency Fund. PPP is a great format for implementing large-scale projects which are necessary for the city’s development especially when you find the city budget drained, which is what happened when we took over. Apart from financial reasons, we need private partners because they already have enough experience in certain areas and the know-how that we don’t have.

How important is the fact that Belgrade now has its own credit rating for implementing the said plan?

— Credit rating of B1 with positive outlook, which we have been given by the renowned global credit rating agency Moody’s, just validates our all efforts on consolidation of public finances in the last three years. We now have the same credit rating as Serbia, and this is actually the highest rating that local authorities can get. The reaction from bankers and investors to us being given this rating was excellent and I am proud to say that we really did a good job. This is definitely going to positively affect all our ambitious plans and projects and it will be a good foundation for realizing what we have planned.

The B1 credit rating was assigned after the city had reduced its deficit. How ready is the city to fund its projects from its own budget?

— We did the impossible in the last three years. We have reduced the deficit four- fold, paid 443 million EUR of debt, and our public enterprises have started to become profitable. Next year, we need to pay another 72 million EUR of debt and, only at the end of 2017, we are going to be able to say that we have stable finances. We have been trying to set realistic priorities and to spend the saved money in a proper way. This, among other things, entails having enough money to do city projects like extending the pedestrian zone and reconstructing our squares and streets. For instance, the Serbian government has agreed to financially assist us in restoring building fronts because Prime Minister Vucic cares a great deal about having neat building fronts so that Belgrade can look its best.

What is your vision for developing Belgrade’s tourism potential?

— I think that Belgrade is a town with a huge tourist potential which hasn’t been used properly so far. Foreigners know what Belgrade can offer which is why we have invested a lot of effort into having the best tourist offer possible and to draw tourists in. Having a direct flight from Belgrade to New York will certainly contribute to this because we know occupy an inviolable position in the region thanks to this flight. The number of tourists has gone up by 12% since the beginning of this year compared to the same period last year and it is still growing. Our goal for next year is to attract more tourists from China. We are going to have a large campaign in that country while all of the tourist signs in Belgrade will be written in the Chinese language too.

How important could the aforementioned projects be for the higher economic output of Belgrade and creation of new jobs?

— Everything we do – from giving free work space to unemployed people to opening our doors to investors – is for the benefit of new jobs. For the first time in many years, the city of Belgrade has less than 100,000 unemployed persons. The negative trend of growing unemployment has finally stopped and I think that things will continue to improve in years to come. To illustrate what kind of healthy business environment we have created, let me just say that we have never had so many operational small businesses in the city. Their number has grown by 5,000 in the last three years.

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