Serbia: South Stream Serbia, minority stake on the pipeline route?

Published on 11. December 2014., News Serbia Energy

Only the company South Stream Serbia is not established in the territory of the mother country, but in Switzerland. This means that the Serbian government did not and would not have had any control over its operations.

The whole deal with Gazprom about the construction of the South Stream in Serbia has remained hidden from the public eye, because all documents about investing money in the establishment of the new Serbian-Russian company for future work, practically are marked as secret.

However, according to the available data, compared with other countries through which it was supposed to pass the South Stream,Serbia has made the most concessions.

On the route of the pipeline from Russia under the Black Sea via Bulgaria, Serbia, Hungary and Slovenia to Italy, Serbia is the only country that has a minority stakein the company founded for this job. Besides only the company South Stream Serbia is not established in the territory of the mother country, but in Switzerland.

This means that the Serbian government did not and would not have had any control over its operations. The public has never wonthe official response of the Government why this company is not established in Serbia.

Member of the Management of the South Stream, Director of Srbijagas Dusan Bajatovic, said in July last yearthat Serbia was considered as a country with great credit risk. “We founded the company in Switzerland to be able to get cheaper loans”.

In response for Insider B92 Gazprom wrote on the same question that, unlike Bulgaria, Hungary and Slovenia, the agreement with Serbia allowed them to choose where they would set up a company. This shows that Serbiaagreed to worse conditions in negotiations than other countries.