Council of Ministers of Bosnia and Herzegovina Holds Its 114th Session

BIH INSTITUTIONS’ EXPENDITURES LOWER FOR KM 6.6 MILION 

The Council of Ministers of BIH  adopted a Report of the Ministry of Finance and Treasury on Budget Execution of Institutions of Bosnia and Herzegovina and International Obligations of Bosnia and Herzegovina for January-September 2014.

Total realised revenues and support for funding of institutions for the first nine months of this year were KM 726,249 or 77 per cent of total planned sum (KM 950,000,000), while realised expenditures of BIH Institutions were KM 631,644,608 or 66 per cent, and are less for about KM 6.6 million or one per cent due to decreased capital expenditures relative to same period last year.

BIH Institutions fulfilled their commitments from 2012 Letter of Intent for realisation of the Stand-By Arrangement with the IMF, and continued their saving measures on salaries, daily allowances for meal, holiday allowances, per diems and supplies expenses , and new employment were limited under a Decision of the Council of Ministers only to employment with new institutions, formed in 2014.

All due liabilities based on foreign borrowings were regularly settled, and total sum of realised payments was KM 557,179,078.82.

 

SUPPORT TO DOMESTIC ECONOMY

 

Upon a proposal of the Public Procurement Agency, the Council of Ministers of BIH took a decision on mandatory application of preferential treatment of domestic products, aimed to support domestic economy and boost-up competitiveness of business community in bidding for contracts at domestic market.

Under the decision, domestic supplying will be discounted in relation to foreign ones in the next five years, so in 2015 and 2016, the preferential factor for contracts to be awarded in 2015 and 2016 will be 15 per cent,  10 per cent for contracts in 2017/2018 and 5 per cent for contracts to be awarded in 2019.

Application of the preferential factor will be excluded towards counties signatories of Addendum 1 to an Agreement on amendment and accession to Central European Free Trade Agreement, consolidated version CEFTA 2006.

 

AT LEAST KM 150.00 PER DAY OF STAY IN BIH

 

Upon a proposal of the Ministry of Security, the Council of Ministers took a decision on the least amount of funds needed for support of a foreigner during his intentioned stay in Bosnia and Herzegovina, which defines that a foreigner, on his entry to BIH has to dispose of KM 150.00 or equivalent in foreign currency for each day of his intended stay in BIH.

 

TO CONTINUE DRAFTING REGULATIONS ON ORGANIC FOOD

 

The Council of Ministers of BIH noted information of the Ministry of Foreign Trade and Economic Relations on transposing regulations in the area of organic food production in Bosnia and Herzegovina and recommended to competent institutions to continue their efforts on development of required regulations and their harmonisation with relevant EU regulations.

There is no legislation in the Federation of BIH and Brčko District of BIH on organic food production, while the Law on organic food production, adopted on Feb. 15, 2013 is in application in Republika Srpska.

 

MODEST ECONOMIC GROWTH, DECREASED UNEMPLOYMENT

 

Upon a proposal of the Directorate for Economic Planning, the Council of Ministers of BIH, the Council of Ministers adopted a document the “Economic Trends in Bosnia and Herzegovina” or first six months of this year, which identifies a modest economic growth in BIH.

Besides, the number of employees in BIH was increased in the first half of this year and it stands now at 697.1 thousand. Encouraging is the fact that for the first time since 2009, an annual level of unemployment was decreased to 550.6 thousand.

The cause to only a slight economic growth was a drop of exports, slowing-down of domestic demand with increased foreign exchange deficit of 17.5 per cent in the Q2 this year, while the economic growth of 2.5 per cent in Q1 this year marked relatively good start of the year.

The situation was additionally aggravated by the May floods in BIH, which affected export demand, in addition to domestic both supply and demand. The interruption in production in flooded areas caused a fall of industrial production for 5 per cent this May, relative to April.

Civil construction works in Q2 were 5.8 lesser in comparison to Q1 this year, when a considerable growth of 7.8 per cent was made, compared to Q4 last year.

The Report indicates that FDIs in the first half of this year were KM 76 million, or 54.3 less than in the same period last year, while total direct investments reached KM 492.7 million and were less for 13.5 per cent relative to the same period last year.

A Report of the Directorate for Economic Planning of BIH on macroeconomic indicators trends for January-September 2014, adopted by the Council of Ministers, suggests that data on export of goods indicate at a slight betterment of the economic situation in BIH in Q3, compared to Q2 this year. A growth of export was 6.5 per cent, and industrial production grew slightly for 0.4 per cent, while a growth of import in Q3 for 9.3 per cent indicates at strengthening of domestic demand.

 

REGIONAL COOPERATION IN AIR TRAFFIC

 

The Council of Ministers of BIH defined two sets of proposal basics for negotiations on agreements with neighbouring countries on assigning responsibility for service provision in air traffic. Proposal basics were defined for conclusion of agreements between the Council of Ministers of Bosnia and Herzegovina and Government of the Republic of Croatia, as well as between the Council of Ministers and Governments of the Republic of Serbia and Montenegro, respectively.

This would mark a continuation of cooperation of countries of the region in air traffic, aimed to facilitate international flight operations across state borders, in the interest of users of air space and their passengers.

Individual agreements were concluded in accordance with the Single European Skies legislation, for promoting its purposes and ensuring benefits for users of the air space.

The Ministry of Communications and Transport will provide individual proposals basics to the BIH Presidency for further procedure, and the Minister of Transport and Communications was proposed as the BIH signatory.

 

DISTRICT HEATING RECONSTRUCTION IN PRIJEDOR

 

The Council of Ministers of BIH defined a Proposal Guarantee Contract (pertaining to a EUR 7 million Loan Contract for Reconstruction of District Heating Utility in Prijedor Project) between Bosnia and Herzegovina and the European Bank for Reconstruction and Development, with basics for its conclusion.

The Project for improvement of district heating in Prijedor is co-funded from a EUR 2 million grant.

The loan proceeds will be used for construction of a new boiler on biomass for district heating, and grant funds will be used for heat spending control measures on the part of users.

This project will help reduction of energy costs current KM 5.5 million to KM 2.1 million.

The Ministry of Finance and Treasury will provide the Proposal Guarantee Contract, with basics for its conclusion, to the BIH Presidency for further procedure, and the Minister of Finance and Treasury was proposed for the BIH signatory.

 

EUR 6 MILLION FOR WATER SUPPLY UTILTY IN GRADAČAC

 

The Council of Ministers of BIH adopted an Initiative of the Ministry of Finance and treasury and appointed a delegation for negotiations on a Loan Contract (Water Supply in Gradačac Project) between Bosnia and Herzegovina and the European Bank for Reconstruction and Development, worth EUR six million.

The existing water supply pipeline in Grdačac will be extended to include communities in tis Southern part. The project will be co-financed from investment grant worth EUR 2 million from the SIDA – EBRD Fund - Communal Environment and Climate Protection Programme, and from EUR 600,000.00 technical assistance.

The loan term is 15 years with three year grace period, and the Project is planned to be completed by the end of 2017.

The Ministry of Finance and treasury will provide a Draft Loan Contract to the Council of Ministers, the following the completion of negotiations.

 

TO SECURE TRANSPARENT AND EQUAL TREATMENT IN ADMINISTRATIVE SERVICE PROVISION

 

Upon a proposal of the Public Procurement Agency of BIH, the Council of Ministers of BIH took a Regulation on allocation of contracts on services under Annex II, Section B of the Law on Public Procurement, with a view to secure preconditions for an adequate and full application of the Law on Public Procurement, which took effect last month.

The regulations should secure transparency, equal treatment, non-discrimination, just and fair competition and most effective use of public resources in special regime procedures of procurement of administrative services, under Annex II, Section B of the Law on Public Procurement.

 

GENERAL AFFAIRS SERVICE OF BIH TAKES OVER BIH PRESIDENCY BUILDING NEXT YEAR

 

The Council of Ministers of BIH tasked the General Affairs Service of the BIH Institutions to take over the management of the BIH Presidency building, following the adoption of the 2015 Budget of BIH Institutions and International Obligations of BIH.

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