Court Case Further Delays Bosnia's State Prison

Long-delayed plans to build maximum-security state prison in Bosnia have been hit by fresh delays and the loss of about 630,000 euros as the result of a commercial dispute.

The prison, whose total budget is 40 million euros, is financed by loans from the Council of Europe's Development Bank, EU and foreign government grants, as well as Bosnian state funds.

The legal tussle began in July when a would-be subcontractor, electronics company Galeb Internacional, lodged a complaint against the contractor.

Galeb Internacional, based in East Sarajevo, had been a potential subcontractor for the project, but Spanish-Czech consortium OHL ZS gave another bidder the tender to install electrics on-site.

In July, Galeb Internacional submitted a claim to the Commercial Court of East Sarajevo for nearly 1.8 million euros, stating OHL ZS had included its documentation and licenses in its bid to win a tender to build the prison, but later nominated another subcontractor for the works.

In a written statement to BIRN, Galeb Internacional wrote that OHL ZS won the bid thanks to Galeb's documents and licenses, but that OHL ZS did not engage Galeb to do the work despite it having been "envisaged and agreed".

OHL ZS disputes this version. In a written response to BIRN, OHL ZS said that special conditions were defined in the tender and that Galeb's inclusion as a possible subcontractor did not make it a confirmed subcontractor "without the concluded contract in written form according to the local law".

Following Galeb's legal complaint, a district court ordered all electrical work to be suspended at the site pending resolution of the case - a measure that lasted three monthsfrom July to September, and, according to Zoran Basic, director of the...