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17 Jul 17

Asset Rows Slow Sale of Serbia's Neglected Spas

Despite repeated announcements of the imminent privatisation of Serbia's 50 or spas, legal disputes over ownership of the assets is delaying the whole process.

Maja Zivanovic
BIRN Belgrade
Niska Banja. Photo: Wikimedia/Micki

Long-drawn-out court cases to determine who owns the assets of Serbia's 50 or so spas - many of which are run down - are slowing down their announced sale.

Serbia's Ministry of Economy told BIRN that litigation is ongoing between the state fund for pension and disability insurance, PIO, and the spas and the state over the PIO's percentage of ownership of the assets of the spas.

“Resolving this issue is a starting point for the further privatization process of the entities ... Resolving these cases will determine the amount of the PIO's investment [assets] in the objects and equipment of the privatization entities,” the ministry explained.

Serbia's 50 or so spas remain a popular attraction. According to the Serbian Touristic Organisation, 477,102 people stayed in the spas in 2016, which was 12 per cent more than in 2015.

The most visited were Vrnjacka Banja and Sokobanja, Bukovicka Banja in Arandjelovac, Banja Palic, and Banja Vrdnik.

Some already have privatization portfolios on the web portal of the Economy Ministry, with all the information for eventual buyers, but before courts resolve ownership and asset disputes, privatisation is on hold.

“The Ministry of Economy is unable to anticipate when and in what way the court proceedings that are currently underway will be completed,” the ministry noted.

Serbia's Minister of Tourism, Rasim Ljajic, said last year that the first sales of spas were expected this year.

“We are talking to potential investors, they are interested, but I cannnot say that all spas will be sold,” Ljajic told Serbia's Tanjug news agency, as was reported last December 22.

Hinting who might be interested in their future, Health Minister Zoran Loncar on May 15 predicted that visitors from the UAE would start to frequent Serbian healthcare facilities in larger numbers by the end of the year.

A Gulf delegation has been visiting and inspecting Serbian spas, and during May stayed in Vrnjacka Banja in order to check the capacities and the conditions.

But the Tourism Ministry has agreed that resolving of the property issues is a must for privatisation, adding that this would also increase the value of tourist destinations in Serbia in general.

“The state will continue to invest in tourism infrastructure ... but without resolving property-legal relations, the spas cannot make their full contribution to the development of tourism in Serbia,” the ministry told BIRN.

The secretary general of the Spa Association of Serbia, Vladan Veskovic, meanwhile told Vecernje novosti newspaper on June 19 that the spas are currently in a neglected state and have lost a lot of their beds.

“From 2008 to 2015 alone, our spas lost 17,300 beds, which is around 43 per cent,” he said, adding that the loss had deprived the state budget of around 26 million euros.

Prime Minister Aleksandar Vucic, at the joint session of the two governments last November, invited investors from Slovenia to buy or invest in Serbian spas.

Fromer Serbian President Tomislav Nikolic the same month urged Qatar officials to look at 36 spas that were in the process of privatization and which Qatari companies were believed to be interested in.

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