The company Resalta, which is backed by American businessman Mark Crandlal, is at the center of a scandal that could be of interest to the Croatian public as well, because that company is increasingly operating in their market as well.
Resalta, under the old name of GGE doo, received a project for the installation of more energy-efficient lighting in Novigrad, Istria, and the construction of a power plant is underway near Slatina.
In addition, the company signed contracts with state-owned companies such as Croatian Forests and the Croatian Electricity Market Operator (HROTE).
In addition to having a business relationship with the Serbian Prime Minister, Crandall's company in Slovenia made a big deal with the City of Ljubljana, which has been headed by Mayor Zoran Janković for many years.
He has behind him a series of indictments for alleged corruption and other criminal acts in which, according to state lawyers, the city budget was damaged by tens of millions of euros.
At the center of the affair are jobs for the energy renovation of 49 public buildings in which the City Municipality of Ljubljana and private partners invested in a ratio of 49:51, while the profit is returned in a ratio of 10:90 in favor of private partners, among whom is the aforementioned Mark Crandall.
Income from an investment worth 18,8 million euros, including VAT, will bring the City of Ljubljana only 15 million euros in return over the next 1,9 years, while private partners will receive as much as 17,5 million euros.
At the same time, it is only the minimum guaranteed contracted amount, which may be even higher if the energy renovation brings greater energy savings.
This created a large property benefit for the private partner at the expense of Ljubljana's budget.
Since Ljubljana finances the energy renovation of buildings mostly from European cohesion funds, it is likely that the budget of the European Union was also damaged by these projects.
The longtime mayor of Ljubljana, Zoran Janković, who was also the general manager of Mercator, today owned by Agrokor, has been leading an intensive election campaign for the local elections that will be held in Slovenia on November 18, 2018.
It opens energy-renovated schools, kindergartens and public swimming pools, and according to the City of Ljubljana, this reconstruction will save one million euros per year, while more than 2 trees will be saved due to lower CO170.000 emissions.
As part of the largest public-private partnership in the field of energy renovation of buildings in Slovenia, worth 18,8 million euros, the reconstruction of 49 buildings should be completed this year, from schools, kindergartens, health centers, galleries, sports facilities and public swimming pools to city facilities. administration.
A year earlier, on March 24, 2017, the City of Ljubljana chose a consortium of Petrol dd and GGE doo for the energy renovation of the aforementioned 49 buildings.
In the publicly available decision on the selection of that consortium, it is interesting that the two most important pages are missing, on which the financial amounts and the ratio of revenue sharing between the private and public partners are probably stated.
From the other pages of that document, it is possible to see that the private investor offered only 10 percent of the guaranteed contractual savings over a period of 15 years, and for possible higher energy savings than the guaranteed, the division ratio is 40:60, again in favor of the private partner.
However, the first contract dated April 6, 2017 shows that for a smaller part of that public-private partnership, more precisely for five facilities within 1A, the return of profits in the ratio of 90:10 in favor of the private partners was agreed.
This contract for the renovation of two elementary schools, one kindergarten, the Tivoli public pool and the Ljubljana-Šiška Health Center foresees an investment worth 5,3 million euros, of which the City of Ljubljana invested 2,6 million euros, partly from European cohesion funds, and a private consortium in which, in addition to the oil company Petrol and the company GGE doo, there is only 100.000 euros more.
Due to the unforeseen increase in costs, Mayor Zoran Janković and Petrol director Tomaž Berločnik signed an annex on May 21, 2018, which increased the investment value of the renovation of five buildings to 6,2 million euros, while the ratio of roles of the public and private partners remained the same.
According to the contract and the annex, the annual savings due to lower energy consumption in those five buildings after the energy renovation will amount to 411.863 euros, and according to the 38th article of the contract, the private consortium will receive 90 percent of that amount, and the City of Ljubljana only 10 percent.
This means that after the signing of the annex from May. In 2018, the private consortium will receive 370.676 euros per year, and the City of Ljubljana will receive 41.186 euros.
Thus, during the 15-year concession period, the City of Ljubljana will receive only 2,9 guaranteed return for the investment in which it invested 618.000 million euros, while the private concessionaire will receive the entire 5,5 million euros in profit for almost the same invested figure.
If the real energy savings will be higher, the income will again increase more for the private partner, because the additional savings are divided 40:60 in his favor.
On the same day, the mayor of Ljubljana, Zoran Janković, and the director of Petrol, Tomaž Berločnik, signed seven more identical contracts with the same parameters for an additional 44 facilities, so that the total value of the investment in the "Energy renewal of Ljubljana" project is 18,8 million euros.
Of this, the City of Ljubljana will invest 9,2 million euros, of which at least 4,8 million euros from European cohesion funds, and the private consortium only 370.000 euros more or 9,6 million euros.
The contracted annual minimum energy savings due to lower costs for all 49 buildings is 1,3 million euros, of which the private partner will receive 1,16 million euros, and the City Municipality only 129.602 euros.
Thus, during the 15-year concession contract, the private consortium Petrol - GGE will generate revenues of 17,5 million, and the City of Ljubljana only 1,9 million euros.
This means that almost the entire savings will end up in private hands.
If a 40:60 ratio were hypothetically maintained in a public-private partnership, which would, for example, bring the private investor a nine percent profit on the investment in public facilities, the citizens of Ljubljana would hypothetically be damaged by that contract for 5,8 million euros, which is the difference between the signed 10:90 ratio and the hypothetical 40:60 ratio in favor of the private partner.
In early October 2018, the City Municipality of Ljubljana again selected a bidder for the energy renovation of an additional 11 buildings, including three elementary schools, three kindergartens, the Kodeljevo sports hall and swimming pool, two city administration buildings and the building of the Krim sports club.
There was only one offer at the public tender - the consortium of Petrol dd, Resalta doo and Javna svetnijava dd, which was also selected by the City Municipality.
The decision on the selection of the best offer in the public-private partnership, signed by Mayor Zoran Janković, states the amount of the investment worth 5,8 million euros, and the guaranteed annual savings within the concession for the next 15 years would amount to 11 euros for all 385.000 facilities.
In this case too, the bidder offers 10 percent of guaranteed annual savings to the City Municipality.
The signed contracts from the new tender are not yet available, but the data from the selection decision are identical to those from the first tender in April. 2017
One day later, on October 4, 2018, Jankovič and Berločnik signed the contract based on the tender mentioned above.
With this discovery by Nacional, Mayor Zoran Janković's statements during the signing of the concession contract with the private consortium Petrol-GEE on April 6, 2017, take on a new meaning.
The mayor then stated: "We are responsible for these savings and if we don't make them, we and the consortium of Petrol and the company GEE should pay for these savings. Everything that will be more than the planned savings, we share." Savings belonging to the Municipality will remain in the ownership of the manager of the renovated facilities. "The plan is to motivate directors and managers to save money for the education of the young and the elderly," explained Janković.
However, directors of public organizations, schools and kindergartens in Ljubljana will receive only 15 million euros from these revenues in 1,9 years, or 129.602 euros per year.
When this is divided into 49 energy-renovated buildings, each public institution "for educational purposes" will receive an average of only 2.644 euros per year or 220 euros per month, while private partners will get 1,1 million euros from energy renovation every year.
In practice, it looks like the directors and managers of 49 Ljubljana schools, kindergartens and other public institutions will have lower monthly bills for electricity and heating in the next 15 years due to energy renovation, but almost all of these savings will be charged by a private consortium, which means that energy renovation will not be seriously noticed in the budget of public institutes.
Director of the new partner of the private consortium Javna Razsvetljava dd, which has been taking care of lighting on the streets of Ljubljana since 1952, since the end of June. In 2018, it was Igor Hrzić from Zagreb.
And in Croatia, that company cooperates with the company GGE, that is Resalta.
Two years ago, the consortium of those two companies applied for a tender in Novigrad, Istria, in which a similar model to the one in Ljubljana was selected.
Two years ago, a project was presented to replace the existing public lighting fixtures with new LED lighting fixtures.
As reported by the city authorities at the time, it was an extensive project to modernize public lighting in the area of Novigrad, which reconstructed or modernized the existing public and outdoor lighting throughout the city, applying measures of energy-efficient and ecological public lighting.
The project was financed with the funds of the Fund for Environmental Protection and Energy Efficiency, and with the funds of selected bidders for the execution of lighting reconstruction works.
The value of the investment was about HRK 3,5 million, of which FZOEU financed HRK 1,4 million, and the rest of about HRK 2,1 million was financed by the bidders for the execution of the works, a consortium of Slovenian companies GGE doo and Javna Razsvetljava dd
The Novigrad management said that Slovenian companies will compensate themselves by saving electricity.
During the entire project, 900 lighting fixtures were replaced with new LED lighting fixtures, which represented approximately half of all lighting fixtures in the city.
The Novigrad management said that this is an ESCO model, on the basis of which the selected competitors undertake to carry out modernization at their own expense and risk, i.e. reconstruction of public lighting and in doing so bear all technical, technological, financial and commercial risks, and the service they provide will be charged exclusively from the electricity savings achieved.
Namely, they guarantee annual savings of around HRK 300.000 for the next eight years.
According to this calculation, Novigrad would save HRK 2024 million by 2,4, which means that the Slovenian consortium would leave the job with a profit of HRK 300.000.
In the whole story, the name of the company is interesting, which, along with one of the most famous Slovenian oil companies, Petrol, is the second partner in that consortium.
In March 2018, GEE doo got the new name Resalta, but, despite the name change, the 100% owner remained the same, the company GEE Netherlands BV from the Netherlands.
Nacional already wrote about that company in March 2018, when, as part of the Malta Files project, it published a detailed investigation into the involvement of Serbian Prime Minister Ana Brnabić in an offshore affair.
Behind the large octopus of companies from tax havens, which were behind the largest private investment in Serbia - the construction of the Dolovo wind farm - were the American entrepreneur Mark W. Crandall and his partners, who have been investing in renewable energy since 2007, mostly in Eastern Europe and Australia.
Crandall previously co-owned Glencore and Trafigura, the world's largest oil and strategic commodities trading companies.
The company GEE Netherlands BV today has four owners: the Slovenian company Gorenje, the Public Company Energetika Ljubljana, Postscriptum Ventures from Luxembourg and Black Peak Capital based in Sofia, Bulgaria, whose co-owners are Postscriptum Ventures, Gorenje and Chinese and Saudi investors.
According to the annual reports of the owner of the company Netherlands BV, Gorenje has 30 percent of the shares, Public Company Energetika, which is 100 percent owned by the City of Ljubljana, has 20 percent of the shares, and the other 25 percent is shared by Postscriptum Ventures and Black Peak Capital, which are related to Crandall.
Also interesting is the mistake that happened when Slovenia introduced mandatory registration of the company's final owners at the beginning of this year.
On the last legal day for registration in the official register, January 19, 2018, Resalta (formerly GEE Slovenia) reported Mark William Crandall, with a permanent address in Belgrade, as the sole owner of more than 20 percent of the shares, but they deleted that entry four days later.
The Dutch company GEE is the owner of a wider network of companies dealing with the energy renovation of buildings in Italy, the Czech Republic, Slovenia, Bosnia and Herzegovina, Montenegro, Serbia, Bulgaria and Croatia.
According to the court register, Resalta doo with headquarters in Zagreb is 100% owned by Resalta from Slovenia, one of the members of the consortium that will make millions in profits at the expense of the City of Ljubljana.
Of course, the Croatian branch of the company also entered into public-private partnership deals in Croatia.
A biomass heating plant of five megawatts will be built in Slatina, and 14-year contracts for the supply of biomass with Croatian Forests and the supply of electricity with the Croatian Electricity Market Operator (HROTE) have already been signed.
IZ Petrol responded to Nacional's question, saying that the stated ratio of sharing savings between the primary and public partners is "certainly appropriate and understandable, fair and in accordance with the principle of good management".
Resalta (GGE) responded similarly, from which they stated that this relationship is "fair and in accordance with the principle of good management because it was established on the basis of concluded negotiations between public and private partners".
Both private partners replied that they did not achieve any financial benefit to the detriment of the city of Ljubjana and its citizens.
When asked, in what proportion Petrol and Resalta share profits, they stated that it is a business secret.
The Mayor of Ljubljana, Zoran Janković, did not answer the questions that Nacional asked him last week until Monday afternoon.
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