After settling its debts to the company Viaduct, the Republic of Srpska (RS) is now facing another arbitration case in Washington, this time valued at over 50 million euros. The dispute has been initiated by the Slovenian company Elektrogospodarstvo against the RS, and by extension Bosnia and Herzegovina, over the failure to deliver electricity from the Ugljevik thermal power plant (TPP Ugljevik).
The joint investment agreement between Slovenia and Bosnia and Herzegovina, signed during the former Yugoslav period for the construction of two coal-fired units at Ugljevik, was neglected by Bosnian authorities for years. This oversight led to arbitration proceedings in both Belgrade and Washington, raising concerns that a repeat of past costly disputes could occur.
Opposition members in the RS National Assembly argue that such negligence has direct consequences for citizens, emphasizing that the financial burden of these disputes falls on taxpayers. They contend that funds spent on international litigation could have been used for pensions, salaries, child benefits, infrastructure, and education.
Management at the Ugljevik coalmine and thermal power plant rejects these criticisms, asserting that efforts are ongoing to resolve the case and that the outcome will not mirror the Viaduct situation. However, the potential financial liability remains unclear, as company officials emphasize that negotiations are confidential.
In 2016, the RS Government signed an agreement with the Council of Ministers of Bosnia and Herzegovina, committing to cover any damages should the case be lost. Nevertheless, there remains the possibility that RS authorities could refuse to honor these obligations, as has happened previously. Former state legal representatives warn that the case could again become a lengthy and costly process, imposing additional expenses on both the entity and the state.
The previous arbitration between Slovenia and Bosnia and Herzegovina resulted in a ruling against RS and BiH for approximately 125 million euros. In addition, Ugljevik was required to pay Slovenia another 65 million euros for undelivered electricity for the period from 2022 to 2024.
