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High-level corruption cases in the Western Balkans and Turkey

Railways Serbia - High-level corruption cases in the Western Balkans and Turkey

Railways Serbia

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Introduction

In April 2013, the Higher Court in Belgrade sentenced the former director of the public enterprise Railways of Serbia Milanko Šarančić to five years in prison, and his two associates Zoran Milićević and Milorad Čelebić to four years in prison, for abuse of office and direct violation of the Law on Public Procurement. Another defendant, Dragoslav Pejčić, was acquitted.

Country
Serbia
Sector
Public finance
Offence
Abuse of office
Phase
2nd instance verdict

Description of the case

In April 2013, the Higher Court in Belgrade sentenced the former director of the public enterprise Railways of Serbia Milanko Šarančić to five years in prison, and his two associates Zoran Milićević and Milorad Čelebić to four years in prison, for abuse of office and direct violation of the Law on Public Procurement. Another defendant, Dragoslav Pejčić, was acquitted.

The court found that the defendants had caused damages of €908,000 to the public company Railways of Serbia through the controversial procurement of locomotives and trains.

Six diesel electric locomotives were purchased from Slovenian Railways and ten diesel vehicles from Sweden Rail, resulting in damages to the Serbian public enterprise because the same procurement could have been made in Serbia at a lower cost. For each of the 33-year old locomotives purchased from Slovenian Railways, roughly €400,000 was paid even though the Slovenian company had sold the locomotives to an initial buyer at €350,000 each. The supplier of the locomotives was a boutique registered at several false addresses and owned by Čelebić, who is one of the defendants.

The judge explained that the same scheme was used in both controversial procurements. Railways of Serbia received bids before the tender was published and the first offered price was always final. Locomotives from Slovenia were purchased at a significantly higher price through an intermediary company and not directly from the Slovenian bidder. The same thing occurred with the Swedish locomotives.

In July 2015, the Appellate Court overturned the first instance verdict and ordered a retrial. In March 2019, the Higher Court in Belgrade cleared the defendants of all charges and finally, in May 2021, the Appellate Court confirmed the second first instance verdict.