Money spent on house renovations, beneficiaries blame the contractor for the works

Almost two years ago, specifically in July 2021, the construction of 40 residential buildings for permanent housing and the return of internally displaced persons whose homes were destroyed during the war began in Foča. The deadline for completion of the works was 10 months, specifically May 2022, but it was not met as only 31 buildings were constructed. Meanwhile, the allocated funds were exhausted, leaving nine families without the promised housing, and the constructed houses were of significantly poorer quality.

Families feel deceived and identify the main culprit as the contractor who, despite making millions in profit and receiving funds, claimed there was no money available for constructing the buildings.

The project, which started in 2020, announced the construction of 500 houses and 125 apartments in Republika Srpska as part of the Regional Housing Project coordinated by the Ministry of Human Rights and Refugees of Bosnia and Herzegovina and implemented by the Republic Secretariat for Displaced Persons and Migrants. The funds, mostly provided by donors, were secured by the European Commission, the U.S. Government, UNHCR, and OSCE.

Foča is one of the municipalities benefiting from this project.

The Republic Secretariat for Displaced Persons and Migrants transferred 1,789,761 KM to the company “Konstruktor” Ltd. Foča for the reconstruction of 43 residential units (later reduced to 40) in the municipality of Foča.

The project announcement brought hope to many displaced individuals that they would finally be able to return to their pre-war addresses.

Medhiba Termiz is one of the returnees in the municipality of Foča who has been applying for similar projects since 1996. After being selected for the latest project, she hoped to move into her renovated house soon, but that did not happen, and it seems unlikely to occur anytime soon.

In July 2021, Medhiba signed a contract for the renovation/construction of a residential unit.

“As of today, the contractor is being introduced to the project, and the contractual deadline for the completion of the works, lasting 300 days, will commence from July 14, 2021”, according to the minutes of the contractor’s introduction, signed by Nemanja Gavrilović (representative of the Secretariat), Milivoje Davidović (representative of the contractor – Konstruktor Ltd.), Amir Čaušević (representative of the Foča municipality), Zdravko Lozo (representative of the supervisory body), and Medhiba Termiz (owner of the property/donation beneficiary).

The deadline expired in May 2022, and Medhiba is still waiting for the reconstruction of her completely destroyed house, even though she has fulfilled all the requirements as a beneficiary.

“We did some preparatory work and poured a foundation slab. Problems started after the contract was signed”, Medhiba tells Spin Info.

The contractor, the company “Konstruktor,” reportedly told the affected families that they couldn’t build the houses with the funds they received from the Government of Republika Srpska, even though they themselves submitted a proposal to the government and signed a contract in 2020.

After persistent inquiries from the deceived families whose houses were not built despite the allocated funds, “Konstruktor” allegedly stated that the problem lies with the project and advised them to contact the project designer, namely the company “Vizija” from Sarajevo.

“It has been two years, we have a signed contract, they received the money, but they haven’t implemented anything. They haven’t done anything for us. Even the preparatory work we did is starting to deteriorate”, Medhiba explains.

The contractor’s response: “Don’t call me, goodbye”

Milivoje Davidović, the representative of the contractor “Konstruktor,” had no answers to the questions posed by our portal regarding why the houses were not built and where the money went.

“As a journalist, you should know who I am, what I am. I am not responsible for that; the Ministry is responsible for those houses”, Davidović said.

When we insisted that he should know the answer because they are the contractors who received the funds and committed to building all the houses by May of last year, Davidović replied, “You have no reason to call me, goodbye”.

The Foča municipality, which was responsible for granting the necessary approvals, claims that they have done everything within their jurisdiction.

“We issued building and urban planning permits for each building, and we completed our part of the job two years ago”, said Amir Čaušević, the representative of the Foča municipality, in an interview with Spin.

He also mentioned that he heard “Konstruktor” using the project as an excuse. On the other hand, the design company denies these claims and states that everything is in order with their projects.

“My company has designed 500 houses both in the Federation and in Republika Srpska. In the Federation, all the houses were completed without any issues, and they are the same houses. The contractor worked in both Foča and Novi Goražde. The problem is that this contractor did not do their job properly. They discontinued the project in Novi Goražde, and in Foča, they simply refused to work”, said Edin Hodžić, the owner of the design company “Vizija”, in an interview with our media outlet.

Hodžić recalls that all the contractors who were awarded the construction job for the 500 houses in the mentioned project have completed their work except for “Konstruktor.”

“Out of the 20 companies working on the 500 houses, 450 have been completed, and only the houses built by one company remain unfinished. That is a problem. The problem lies with that particular company, not the others”, Hodžić stated.

Where is the money for the reconstruction of the housing units? Returnees: We have been deceived!

Medhiba states that “Konstruktor” should not have offered an amount that was insufficient for construction, but it is evident that they took the money.

“I feel deceived. My agony has lasted for 20 years. My house was destroyed in 1995. Someone took the money and did not deliver the houses. My husband died waiting for donations, and now I’m waiting to die as well, and that’s it”, Medhiba tells us.

Šemsa Bećirević‘s father also signed the same contract as Medhiba Termiz in July. However, he passed away, and the construction work for the donated house has not even started yet. Šemsa, as the legal heir, explains that they had to take on debts to create a foundation slab for the house, so they only have expenses from the mentioned donation.

“Of course, we have been deceived. How can we not be deceived? We have been waiting since 2019, and all these years we have been waiting. We built a foundation slab that freezes and deteriorates, and nothing is happening. We cannot return to our homes,” Šemsa speaks about the problem caused by “Konstruktor” to the returning families.

“Konstruktor” also used the project as an excuse with Šemsa, and whenever the donation beneficiaries offered a solution, the contractor would come up with new excuses.

“The contractor said they were supposedly seeking funds because the cost of materials has increased, and they claimed to be waiting for more money to be given to them”, Šemsa adds.

However, it is unclear how “Konstruktor” found itself in “financial difficulties” since in 2021, the company had revenues exceeding 4,000,000 KM with a profit of over 1.4 million KM. In the previous year, the company generated revenues of 3.2 million KM and ended the year with a surplus of 331,339 KM.

According to data from the Public Procurement Portal, they received nearly seven million marks (6,964,445 KM) from the Republic Secretariat for Displaced Persons and Migrants and the Federal Ministry of Displaced Persons and Refugees since 2017 for projects in the Foča municipality. This is not the only municipality in Republika Srpska where they have carried out construction projects. According to available information, the owner of the company is Novica Ivanović. Furthermore, they have received contracts for building kindergartens in Foča and many others. Ivanović is also the owner of the mini hydropower plant MHE Krupica, for which the concession contract was terminated, and he is a co-owner of the Bk2 mini-hydropower plant on Krupica, which has been in operation since 2016.

Receiving contracts for which they did not have workers

Despite the significant amount of money, this company received from the budget, failure to fulfil contractual obligations is not the only irregularity attributed to “Konstruktor.” Donation beneficiaries also claim that the company did not have an adequate number of workers and often relied on subcontractors or completely unskilled workers.

Šemsa remembers that “Konstruktor” even asked donation beneficiaries to find workers themselves because they did not have enough workers, although they should have known and stated this during the tender application process. However, they remained silent about it at that time.

“They told us to find workers because they didn’t have enough. So, on our own, we found workers who were supposed to be paid by the contractor. However, the contractor eventually backed out”, Bećirević explains.

Medhiba Termiz expresses similar concerns.

“Konstruktor lacks the workforce; they take on projects and then hire subcontractors”, claims Medhiba.

Multiple sources have confirmed to Spin Info that “Konstruktor” indeed faces issues with a shortage of workers, but they still manage to secure contracts.

“We feel deceived. We participated in all possible tenders and submitted the required documentation, which is not a small expense. My father lost his life while going and signing. The day he signed the paperwork, my father broke his hip and died. We have been deceived no matter how you look at it. We haven’t received anything; they have taken everything from us”, Bećirević says.

“And what ‘Konstruktor’ has built is of poor quality.”

While nine families are still waiting for the construction of their houses to begin, Spin has learned that even the families who received the keys to their homes are not satisfied with the work done.

According to the contract, it states that “In case the reconstruction of the housing unit is not carried out in a satisfactory manner, the implementing body (State Project for Housing Accommodation) is obliged to organize necessary corrective works on the renovation/construction of the housing unit as soon as possible, but no later than within seven working days”. However, even that has not been fulfilled.

“Konstruktor” is also accused of violating the project obligation to build a biological treatment plant with continuous activated sludge recirculation technology, with a capacity of 2-5 ES, intended for the biological treatment of sanitary wastewater. Instead of the treatment plant, they received ordinary barrels.

Sado Selimović is one of the returnees who, instead of a treatment plant, received a regular blue barrel. His son, Samir, tells Spin Info that the house is uninhabitable because they haven’t received water or electricity, which were supposed to be generated from solar panels due to the high cost of connecting to the public power grid.

“We received the keys, but we didn’t get water, electricity, or the treatment plant. The planned collector, which purifies and separates sewage waste, was not built. They just covered it up with a regular barrel”, Selimović says.

Considering that one treatment plant can cost up to 6,000 KM, it is clear how much “Konstruktor” has “saved” on dozens of returnee houses.

“The project originally included biological treatment plants in septic tanks for the purification of sanitary wastewater. However, according to the supervisory body’s opinion, this would have posed maintenance problems for the beneficiaries. Therefore, approval was granted to install septic tanks without biological treatment, which are in compliance with the law on wastewater”, explains the Republic Secretariat for Displaced Persons and Migrants, justifying the decision.

In 2019, Mašo Đozo received an unfinished building as part of one donation. In 2021, he received another donation, which included the construction of a water treatment plant, the construction of stairs, façade work, and the installation of windows and doors. As expected, “Konstruktor” was awarded the contract for this project as well, but problems with the contractor began right from the start, according to Mašo’s son, Muhamed.

“So much misery and trouble with them. None of it was done properly. The septic tank that was planned according to the project was poorly executed. Instead of a planned septic tank costing 6,000 KM, we ended up with 12 meters of pipe and two plastic barrels”, explains Đozo.

The Secretariat states that “Konstruktor” raised objections to the project documentation after the deadline expired

The Republic Secretariat for Displaced Persons and Migrants confirms to Spin Info that a certain number of houses, for justified reasons, have not even been started. One of the main reasons is the lack of necessary infrastructure (roads, water supply, and power grid), as well as project documentation not being aligned with the actual conditions on the ground.

“The company ‘Konstruktor’ was aware of all the steps taken by the Republic Secretariat for Displaced Persons and Migrants and did not raise any objections to the project documentation during the tender or at the start of the works. However, after the deadline expired, they raised objections, well aware that there was no time for corrections and revisions”, the Secretariat states.

They further mention that the contracted value for 43 houses amounted to 1,789,761.23 KM without value-added tax (VAT), but due to the aforementioned reasons, including material shortages, price increases in the market, and a lack of workforce, this amount was reduced to 1,320,258.38 KM without VAT through Annex 3.

Instead of facing sanctions for failing to fulfil their contractual obligations to the detriment of the beneficiaries, and regardless of the (un)justified reasons for the delays and poorly executed housing units, “Konstruktor” continues to receive contracts from the same institutions and companies.

Meanwhile, over 20 years after the war, the returnees in Foča are still waiting for a roof over their heads.