Category: Money and deals
Period: from Sep 2017
Outcome: Indictment filed (as of 11 Jul 2024)
For an industrial railway from Stig station to the Kostolac B Thermal Power Plant, EPS paid the contractors Italiana Costruzioni and Bauwesen 95 percent of the $13.5 million invoiced, and according to BIRN much of the railway was never finished. Prosecutors put the unlawful gain at around $7.46 million. After six people were arrested in February 2023, prosecutors Bojana Savović and Jasmina Paunović were taken off the case. An indictment against ten defendants from July 2024 was not confirmed, and the Prosecutor's Office for Organised Crime, which was assigned the case in November 2025, says it is still drafting a new one.
The track, around 22 kilometres long, was meant to carry coal to the new unit of the Kostolac power plant, part of a project funded by a loan from China's Exim Bank. The $14 million contract went in 2017 to a consortium of Italiana Costruzioni and Lazarevac-based Bauwesen, and a month after work began Bauwesen, according to BIRN, took over all the obligations.
Supervision went to the CIP Transport Institute under an 80 million dinar contract, and reports certifying that the work had been done to standard were also signed by EPS engineers; on the strength of those reports the bank released tranches and EPS paid the contractors. BIRN journalists found an empty, weed-covered stretch and rusted equipment along the route.
According to an expert report obtained by BIRN, the damage is $7.5 million: $3.5 million for poorly executed works and four million dollars for works that were not carried out at all. The contractor obtained gravel, which under the tender it could have taken free of charge from the Drmno pit, at a price well above the market price, and EPS approved the payments; charges were also made for thousands of hours of machine work from machines that were not engaged.
According to Radar, when EPS established that part of the ‘completed’ railway does not exist, it called in a bank guarantee of €3.5 million and reported the case to the prosecutor's office. Bauwesen is now in bankruptcy, and in 2021 EPS hired it again to transport coal from Kostolac, a €35 million job.
The Prosecutor's Office for Organised Crime opened the case in October 2019 on a complaint from EPS's internal control unit. Two years later it handed the case over to the Higher Public Prosecutor's Office in Belgrade. On the orders of prosecutor Bojana Savović, police arrested six people on 22 February 2023, among them employees of Kostolac and CIP and former directors of the contractors.
The same day, Higher Public Prosecutor Nenad Stefanović took the case away from Savović. A week later he also took it from Jasmina Paunović, who had been investigating financial malpractice. The prosecutor's office claimed that Savović had been moved at her own request and had been dragging out the pre-investigation proceedings. Paunović says she was given no explanation and that the investigation was cut short as it was „getting close to the tip of the iceberg“.
On 11 July 2024, the Special Anti-Corruption Department of the Higher Public Prosecutor's Office indicted ten defendants from the contractor firms, EPS and CIP for unlawful gain of $7,458,019.71, money laundering and tax evasion. According to BIRN, only two engineers from EPS were charged, and no one from its management.
The construction expert witness resigned because the geodetic survey had been carried out by a firm that is not on the register of court experts. Prosecutors and legal experts BIRN spoke to believe that an indictment based on such findings could be overturned.
The prosecutor's office proposed that the indictment be taken over by the organised crime department of the Higher Court in Belgrade, because the gain exceeds 200 million dinars. According to Insajder, the court's anti-corruption department declared that it lacked jurisdiction, the Special Court sent the indictment to the Prosecutor's Office for Organised Crime in March 2025, and in October 2025 that office asked the Special Court to declare that it, too, lacked jurisdiction. In November 2025, the Supreme Court assigned the case to the Special Court and the Prosecutor's Office for Organised Crime.
In March 2026, the Prosecutor's Office for Organised Crime replied that the new indictment was still being drafted. The Higher Public Prosecutor's Office says no time was lost and that Savović and Paunović did not prepare the indictment, and it accuses Paunović of having dismissed a criminal complaint during the pre-investigation.