1. PROJECT TITLE

Infrastructure development for Vranjes Business zone

2. SECTOR

The initiative is part of the sector of industry and small-and medium-sized enterprises (SMEs)

3. LOCATION

The municipality of East New Sarajevo is located in the Republic of Srpska (RS) and makes part of the city of East Sarajevo, and Vranjes Business Zone is located in the central urban area.

4. BRIEF PROJECT DESCRIPTION

The municipality of East New Sarajevo is a very fast developing new urban area of the city of East Sarajevo. During the last 20 years, more than 2,500 apartments have been built, and the Government of the Republic of Srpska has located several technical faculties with more than 1,600 students as well as many public institutions in East New Sarajevo. Out of the 11,477 inhabitants of the municipality, 4,199 were employed and 1,330 registered as unemployed in 2013. It is estimated that about 100 young people enter the labor market at annual level.
A consequence of the above is high demand for workplaces. By this project, the municipality of East New Sarajevo intends to benefit from its potential reflected in qualified young labor force, favorable position close to an airport, market potential, seat of the university and lack of quality business locations in the entire catchment area of Sarajevo, and to establish a modern business zone.
By its regulation plan, the municipality of East New Sarajevo identified the area of 9,254 ha for business purposes, located to the south and east of the Famos production company which is already operating in the Business Zone.

The project includes preparatory activities (amendment of the regulation plan, technical project) and construction of basic infrastructure network, including:

  • internal transport network,
  • land development,
  • water supply and sewerage network,
  • electricity supply,
  • telecommunication network.

 

The investment is expected to result in 13 parcels (one of which is located within the Famos complex, and two have already been sold to SME owners) fully fitted with modern infrastructure, of the total area of 9.5 ha. The area of individual parcels ranges from 2,080 m2 to 3,715 m2, with a possibility of parcel division into smaller areas, i.e. parcel merger based on needs.
Vranjes Business Zone will be primarily focused on domestic and foreign export-oriented SMEs seeing growth in the sector of light industry or technological sectors and providing technical and business services, including representation offices and offices of international companies.
Vranjes Business Zone is relatively small, but it represents the initial step in further business and technological development of the entire urban area of East Sarajevo.

5. PROJECT DETAILS

5.1 What type of project is it?

Vranjes Business Zone is located in the eastern part of the urban center, to the northeast  of Sarajevo Airport. The location of 9.5 ha which is the subject of this project is partly a greenfield area and partly the existing brownfield complex of the Famos engine factory.

5.2 Project status

Prepared preliminary design/feasibility study.

5.3 Reasons to invest in the project

The analyses of advantages and drawbacks, demand, technical/technological feasibility and cost-benefit analysis indicate that the investment in Vranjes Business Zone in East New Sarajevo is acceptable and justified.
The value of the investment is estimated at 1,482,997.46 euro excluding VAT, and implementation period as 2016-2017 (operational component), under the condition that grant funds are provided.
The justification of the investment is supported by the economic indicators which indicate that the investment would have a positive impact on a wider social and economic environment. The establishment of infrastructure in the zone would contribute to the improvement of conditions necessary for growth of the local small-and-medium-sized enterprises and upgrade the attractiveness of the municipality for foreign investments. That would also contribute to job creation and fulfilment of development objectives of the municipality.

Impact on employment
It is estimated that by attracting new investors to Vranjes Business Zone, 200 workplaces would open by 2022.

Environmental effect
Based on a preliminary environmental impact assessment, it was concluded that the project would not have adverse effects on the environment, since all measures of consequence mitigation and protection would be honored in full.

6. PROJECT FINANCING:

6.1 Estimated project value in €

EUR 1,729,253.28

6.2 Planned sources of financing

Planned sources of project financing:

  • Financing by EU funds (IPA – Instrument for Pre-Accession Assistance),
  • Municipal budget,
  • Loan,
  • Other donors.

 

6.3 Inputs by local partner

Currently, the municipal package of incentives for investors includes:

  • grants for job creation,
  • grants for micro investment in production and agriculture,
  • deferred payment of rent and development fee for construction of new buildings, for up to five years,
  • freezing of further growth of municipal taxes, rent and land prices during recession.

 

6.4 Inputs by investor

 

7. Has physical location for project implementation been identified

The location of 9.5 ha is partly a greenfield area and partly the existing brownfield complex of the Famos engine factory. Vranjes Business Zone is in the newly developed urban area of East New Sarajevo, 2 km from the international Sarajevo Airport.                                                                                                                                        Infrastructure to serve the development of a business zone has not been built within the Zone.

Existing infrastructure on the location:

  • Transport infrastructure: The location is accessed by the built road leading to the parcel of the existing Famos complex, while access to the zone from the west is under construction.
  • Water supply: A distribution pipeline is laid close to Vranjes Business Zone, and this business zone can be connected to it.
  • Sewerage: Close to the future zone there is a built sewerage network which could have the function of a recipient of wastewaters and rainfall waters from this industrial zone.
  • Electric power infrastructure: The area covered by Vranjes Business Zone includes an existing 10-20/0.4 kV Famos substation which meets the needs for electric power.
  • Telecommunications: Vranjes Business Zone has no telecommunication infrastructure for the needs of a business zone, but there is a possibility of connection of the future telecommunication network of the zone to the central office in East New Sarajevo.
  • Existing facilities on the location: One part of the zone is greenfield, while about 5 ha are brownfield and accommodate Famos complex and several separate small facilities.

 

Existing spatial planning documentation and regulations:

  • Vranjes Business Zone is covered by the Urban Plan of the municipality.
  • Regulation Plan of the municipality is in force.

 

8. Have the activities on project implementation already started
9. Project applicant and contact information

MUNICIPALITY OF EAST NEW SARAJEVO, REPUBLIC OF SRPSKA
Address: Stefana Nemanje no. 2, 71123 Istocno Novo Sarajevo
Tel: 00387-57-340-710
E-mail: info@opstinains.net
www: www.opstinains.net