The City of Osijek Wants to Terminate the Sublease of City Land to a Private Company

The Collegium of the City Administration of Osijek today requested the city’s professional services to prepare an analysis of a possible exit strategy for the contract with Mediametro regarding the sublease of city land, which the City Transport Company (GPP) leased from the city for the installation of kiosks in its sales network, a matter currently under police investigation and the state attorney’s office.

At the suggestion of the President of the City Council, Ante Đapić (HSP), who attended the meeting, the possibility of terminating this contract or revising it, as well as terminating all contracts for the installation of kiosks in the city, will be considered in order to achieve higher rents for city land in the future. The conclusion of the police investigation, which is to determine whether any criminal offense was committed in the conclusion of such a contract, will also be awaited.

Explaining the case, GPP Director Darko Marković stated that the company wanted to expand its sales network to facilitate the implementation of a new system for selling contactless tickets, for which it leased 14 locations in the city from the city at a price of 10-15 kuna per square meter, totaling 1,810 kuna per month.

Due to last year’s crisis in the government and the then financial situation in GPP, it was assessed that the company would not have sufficient funds to implement the project worth 2.7 million kuna, so, although there was no obligation for a public tender, four offers were collected. After their consideration, the company Mediametro was assessed as the most favorable, with which a sublease agreement was concluded, with the possibility of further subleasing, as this, according to Marković, had not been explicitly prohibited until then. Therefore, he could lease the land, assessing that he could not know that the sublessee would further sublease the land to the Zagreb company Smoking for a price of 104,000 kuna per month. He added that a protective clause was included in the sublease agreement, stating that in the event of contract termination, there would be no harmful consequences for the company or the city, and he called on the relevant authorities to clarify the case.

Representatives of the professional services and the city secretary Jadranka Nikolov stated that the city regulations on leasing and the decision on communal order stipulate that no commercial company in city ownership, including GPP, can sublease already leased land. She confirmed that the contract between the city and GPP did not include a legal provision explicitly prohibiting the subleasing of land, but there is a provision that the contract is terminated if the lessee does not adhere to the decision on communal order and the leasing regulations, which do not foresee the possibility of subleasing.

Marković’s argument was supported by the President of the City Council, Anto Đapić, who stated that he believes there are no elements of a criminal offense in the entire deal, but that this needs to be determined by the police investigation. Marković’s claims were disputed by Deputy Mayor Ivan Vrdoljak (HNS), who assessed that a public tender should have been announced, as this would have gathered higher quality offers, and that the contract must be terminated due to violations of city regulations.

Vrdoljak assessed that if, despite Marković’s claim, harmful consequences for the city arise due to a possible termination of the contract, everyone in the Administration will be responsible for it. The Collegium of the Administration concluded that the legal services should once again verify the provisions of the sublease agreement. (Hina)