Will Croatia lose 30 million euros for the building in Zagreb’s Kajzerica?

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What is happening with the building of the European Center for Innovation, Advanced Technologies, and Systems located in Zagreb’s Kajzerica? So far, 32 million euros (240 million kuna) have been spent, and from that money, it is possible for the EU to co-finance up to 96 percent from the European Union’s cohesion funds. However, as confirmed to us by the Ministry of Regional Development and EU Funds, the project has not yet been submitted for co-financing.

According to that Ministry, the funds are planned from the Priority Axis Business Competitiveness of the Operational Program Competitiveness and Cohesion 2014 – 2020, for which project implementation is still ongoing, and the Ministry of Economy and Sustainable Development is responsible for its preparation and publication.

This is the only concrete information we have received during all this time we have been sending inquiries to the relevant institutions and trying to talk to the people who work in them. Although we do not want to raise panic, the silence of the Ministry of Economy and Sustainable Development, as well as the Government Office in Banski Dvori, is somewhat concerning as time passes, the deadline for project submission is approaching (as we were told, the end of 2023), and there is a possibility that Croatia may remain without about 30 million euros (230 million kuna) from the mentioned Operational Program if EU co-financing of a fantastic 96 percent is approved.

Ćorić sent the Regulation to Plenković

Our source close to the Ministry of Economy, who wished to remain anonymous, claims that this could indeed happen if the Regulation on the establishment of the European Center, which has been sitting somewhere in a drawer in Banski Dvori for over a year waiting for Prime Minister Andrej Plenković to sign it, is not adopted.

Namely, after a series of years-long complications regarding the construction of that building, whose contractor was Zagrebgradnja (now in bankruptcy), the contract with that company was terminated, and a new one was signed with Strabag for an additional 9.3 million euros (70 million kuna). After that, the works on the building were finally completed, and as we mentioned, 32 million euros (240 million kuna) have been spent so far, and the occupancy permit was issued in February 2020. This means that, at least regarding construction and equipping, the condition for obtaining money from EU funds has been met, or, as our interlocutor explains, generally speaking, the condition for EU co-financing is that the money allocated for that project is spent by the end of 2023.

Equipping has also been resolved, but since then, and it has now been three years, the final step to establish the Center has not been made, which, along with spending money for construction and equipping, is the second condition for submitting a request for EU co-financing. Therefore, without that, there is no money from the EU. However, our interlocutor claims that the Regulation on the establishment of the Center was sent long ago for signature to Prime Minister Plenković in Banski Dvori, back in the spring of 2021, almost two years ago, during the time of former Minister of Economy Tomislav Ćorić. However, neither has the Regulation been adopted, nor has a director been appointed. If this is not resolved by the end of this year, Croatia will, claims our interlocutor, lose the right to non-repayable funds from the EU.

Mutual denial

We did not take our interlocutor’s views for granted, although we could confirm that he knows the structures of the Ministry of Economy well. However, we were surprised by the silence of the Ministry of Economy, headed by Minister Davor Filipović, as well as the silence of Banski Dvori. Indeed, the Ministry of Economy responded to the first set of questions we sent, more precisely, only to part of the questions, while some were omitted.

For example, we did not receive an answer to who is the project leader in the Ministry of Economy. When asked why the Regulation has not yet been adopted and why the director of the Center has not been appointed and whether there is really a danger of losing the money allocated to us by the EU, the Ministry responded before the New Year that a project team had been appointed for the establishment of the Center. But unlike our interlocutor, they claim that ‘the procedure for adopting the Regulation on the establishment of the Center is not related to the use of funds from the EU budget.’

We asked our interlocutor again, but he resolutely maintained that the Regulation is a condition for withdrawing money from Brussels. The Ministry of Economy confirmed that the Regulation has indeed been prepared with an explanation of why Prime Minister Plenković has not yet signed it.

–  After obtaining positive opinions from the relevant ministries, it will be sent for adoption to the Government of the Republic of Croatia – they claim in the Ministry of Economy.

If it is true that opinions need to be provided by some other ministries, the question is how it is possible that they have not done so for two years since it was prepared. However, as we mentioned, according to our interlocutor’s claims, the Regulation has not been sent to any ministries, but was sent to Banski Dvori for signature to Prime Minister Plenković by former Minister of Economy Ćorić. We asked the Government about this before the New Year, and then we repeated the inquiry at the end of January, but we never received answers from Banski Dvori. We were interested in why the Government has not yet adopted the Regulation and why the director of the Center has not been appointed and whether there is really a danger of losing the money allocated to us by the EU.

Given that the Ministry of Economy claimed that they are waiting for opinions from other ministries after which they will send the Regulation for signature to Markov trg (although the regulation is already in one of the drawers there, claims our interlocutor), we sent them an additional set of questions at the end of January. We were interested in whether positive opinions from the relevant ministries for the establishment of the Center have been obtained and we asked them to specify which ministries they are. We were also interested in how much truth there is in the claim that the Center project in Zagreb’s Kajzerica has not even been submitted for EU funding (which they later confirmed to us, but not from the Ministry of Economy, but from the Ministry of Regional Development and EU Funds).

However, we did not receive an answer to that second set of questions. Moreover, we sensed that we would not receive it either because at the beginning of February, a person from the Ministry of Economy contacted us by phone, informing us that we would have to wait for an answer for another 15 days, which is the legal deadline. We pointed out that the legal deadline of 15 days does not run from today (i.e., from the day we received the phone call), but from January 26 when the inquiry was sent, to which the other side of the phone line replied: ‘Okay, from January 26.’ But there has been no answer even to this day.

Can the building be rented?

Our source told us that there is one more thing that could affect the approval of money from the EU fund. Namely, for a while, there was talk of the idea of even relocating the Government Office to the building in Kajzerica, but that was ultimately abandoned, but in the meantime, negotiations began last year with the Rectorate of the University of Zagreb to temporarily relocate to that building in order to repair the current buildings of the Rectorate in Trg Republike Hrvatske (formerly Trg maršala Tita) and in Nazorova street from the damage caused by the earthquake in March 2020. In response to the first set of questions from the Ministry of Economy, we were confirmed that negotiations were held, and from the Rectorate, we were confirmed that they have not yet relocated, but that they plan to do so in the foreseeable future.

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European Center for Innovation, Advanced Technologies, and Skills Development

photo Ratko Mavar

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Our interlocutor claims that due to the relocation of the Rectorate to the building in Kajzerica, the European Commission could challenge the allocation of money from the EU fund, or at least could raise issues about it. Namely, he explains, the money is strictly intended for the building where the European Center for Innovation, Advanced Technologies, and Systems will operate, and in Brussels, they do not intend to finance the renting of the building because it was not built for that purpose. However, the Ministry of Economy thinks differently.

– Any temporary accommodation of the Rectorate in the mentioned facility does not affect project activities or the funds allocated for the Center’s activities – they stated from the Ministry in response to our first set of questions sent before the New Year.

However, the information about the interest of the European Commission in the whole story indicates that there is something to it. Allegedly, a query was sent from Brussels to Banski Dvori regarding the status of the establishment of the Center and what is happening with the building in Kajzerica. We contacted the European Commission’s Representation in Zagreb, asking them this question. We also asked whether the EC agrees that the Rectorate be temporarily accommodated in the Center’s building, rather than being used for its original purpose, and whether the condition for co-financing is that the Regulation on the establishment of the Center be adopted and its director appointed.

The Representation of the EC in Zagreb diplomatically informed us that ‘the Commission is closely monitoring the implementation of that operational program,’ while directing us to contact ‘the relevant managing authority that has detailed project information – the Ministry of Regional Development and EU Funds’ for all details about the specific project.

But as we have already mentioned, the Ministry of Regional Development and EU Funds could not tell us anything about it because the project has not been submitted for EU funding. In fact, even the Representation of the EC in Zagreb did not directly answer our questions, but to avoid leaving everything at a bare and dull diplomatic response, they did note that it is actually a matter of joint management of the project by the Government of Croatia and the EC, which means that Brussels is interested in the project’s development.

– Both the member state and the Commission are responsible for financial management. Within such a type of management, it is the responsibility of the member states to ensure that projects are implemented in accordance with the applicable legal framework, that they meet the objectives defined in the operational program, as well as the conditions for operational support, while the Commission retains a supervisory role – they stated from the Representation of the EC in Zagreb.

Uninformed Plenković and Filipović?

Therefore, although we did not receive a direct answer, it could be said that our interlocutor is right and that the EC could raise issues regarding the renting of the building in Kajzerica by the Government, as indicated by the words that the EU member state, i.e., Croatia, must ‘ensure that projects meet the objectives defined in the operational program, as well as the conditions for operational support,’ and not some other objectives, such as renting a building.

Despite various attempts to obtain any coherent answer regarding why the building in Zagreb’s Kajzerica has been empty for three years after completion and almost full equipping, we have not managed to get an answer. We tried to contact some people in the Ministry of Economy, but no one wanted to speak anonymously for fear of being sanctioned. However, their silence practically indicates that something is wrong because if everything were as it should be, they would probably vigorously assert that we are raising issues without reason.

Our interlocutor close to the Ministry of Economy actually blames Prime Minister Plenković and Minister Filipović the least.

– Objectively, in the sea of major problems that the two of them are solving, the problem of the building in Kajzerica is not something they would deal with, even if the situation were calmer. For that, there are subordinate bodies responsible to them. I believe that the two of them are not even aware that the Center project in Kajzerica has stalled – says our interlocutor.

And we must emphasize again, our goal is not to seek scandals, but to point out the problem. Perhaps everything is actually fine, but the silence of the Ministry of Economy and Banski Dvori further intensifies the suspicion that someone is obstructing the establishment of the Center. If it is true that the Regulation on the establishment of the Center has been stored in one of the drawers in Banski Dvori for two years, which is a condition for obtaining money (perhaps even 96 percent or about 30 million euros, or 230 million kuna) from the EU fund, and if it is true that the upcoming temporary relocation of the Rectorate of the University of Zagreb could provoke numerous problematic inquiries from Brussels, then it is time for those responsible for this job to roll up their sleeves or explain to the public what this is all about.