From 2.5 to 1.2 billion euros “overnight”: How was the price of the “EXPO 2027” project suddenly halved? – Economy

Work on the “EXPO 2027” project is well underway, at least according to the representatives of the authorities, and on May 1st, the foundation stone for the construction is expected to be laid. the national stadium in Surčin.

However, the public is still not aware of where the “EXPO 2027” project ends, and where the other projects planned as part of the “Leap into the Future – Serbia 2027” vision begin. The only thing that is known is that the state investment of around 18 billion euros is planned for all of this.

“No more money than one billion or one billion and two hundred million euros will be invested in the EXPO,” said the Minister of Finance Siniša Maliguesting on Pink TV.

This information, however, contradicts those that were presented before Mali by other representatives of the government and people involved in this project.

So far, we have heard from the Minister of Construction Goran Vesić, then from Dušan Borovčanin, the director of the company “EXPO 2027”, and from the President of Serbia, Aleksandar Vučić, that around 2.5 billion euros will be allocated for this exhibition.

This means that the price of this project is now lower by around 1.3 billion euros, and the public did not get an explanation of how and why.

We have not been able to find out how Mali came up with these figures and what they should cover. We have not received answers to our questions from the Ministry of Finance until the publication of this text.

On the other hand, Milojko Arsić, a professor at the Faculty of Economics in Belgrade, thinks that it is very strange that the price of this project has now been reduced by more than half.

“Since the beginning, more precisely since the decision on the implementation of that project, we have had unclear and confusing messages sent to the public. At one point, the government itself linked all the big projects that will be implemented in Serbia in the next few years to the EXPO project, so the public got the impression that the EXPO costs 18 billion euros, but in fact that price includes the traffic structure, energy facilities and various other investments,” he explains.

Only after that, as Arsić adds, did the government representatives come up with an estimate that roughly corresponds to the costs of organizing similar exhibitions, of around 2.5 billion euros.

“Now they have come out with this third number, which is probably due to the difference in coverage of what is meant by EXPO.” Are only facilities that will be used for the organization of exhibitions and accommodation of participants included, or also access roads and some other sports facilities and the like”, asks Arsić.

He emphasizes that government representatives have an obligation to citizens to present the structure of costs in detail.

“They have to say that, for example, those costs will be financed from loans first, but that those loans will be returned from taxes, that is, from citizens’ funds.” “To come out with an indicative estimate of how much it costs and what is included in that project,” says Arsić.

He repeats that it must be a difference in scope.

“Once they include one group of projects, another time another, and the third time a third… it is not clear whether that project includes the national stadium, whether it includes sports centers, access roads and other things that are planned there,” says our interlocutor.

However, as he states, government representatives believe that they have no obligation to account to citizens and get angry when someone asks them a question about it.

Economist and editor of the publication “Strateo” Saša Đogović is of a similar opinion, who believes that there are two possibilities for this.

“We don’t know what all falls under the EXPO project, there is no publicly available specification, so most likely there was a reduction in investments, that is, a reduction in needs, and therefore the price was reduced,” he explains.

Another possibility, he adds, is that something was thrown out of the project.

“It is possible that certain things were transferred to other projects, outside of this one, which forms the core of the EXPO itself. So that value is lower because of that,” says Đogović.

However, he assumes that it is still the first option.

“Investments were probably reduced, so as not to overstretch the budget and lead to even more generous and additional borrowing.” “Now they tried to rationalize it in order to preserve budgetary stability,” Đogović believes.

Nemanja Nenadić from Transparency Serbia says that the amount presented by Mali is closer to what was predicted.

“This amount is closer, but not exactly the same, to what was documented in the budget proposal for 2024, where those costs for this and the next two years were projected at slightly more than one billion euros, while the calculation included and the construction of the national stadium,” he explains.

However, the problem, he adds, is that it is still unknown what exactly is included in this project.

“Given the conflicting statements of government representatives so far, it is very important what the costs will be for the EXPO 2027 exhibition and what it includes, that is, what makes up those costs,” he emphasizes.

Nenadić also points to the problem of transparency itself in this project.

“It is very important to see which part of those costs will be realized on the basis of a special law, which excluded the application of the Law on Public Procurement,” he reminds.

Professor at the Faculty of Economics in Kragujevac, Veroljub Dugalić, also believes that this is an unusual situation.

“Financial decision-makers generally increase the amount of what should be paid at every opportunity, and now we have the unusual situation that there has been a reduction from 2.5 billion to 1.2,” he says.

Dugalić reminds that we still do not have a feasibility study or a project for the EXPO.

“Based on that, you can see what the total costs and the structure of those costs will be, and on the other hand, the income, that is, the expected profit.” So further decisions are made based on that,” he explains.

Instead, he adds, we got the lex specialis.

“So now what they are doing is not subject to the public procurement system and I have no control over the funds that are being spent.” “We don’t know what that money will be spent on,” warns Dugalić.