SARAJEVO (Bosnia and Herzegovina), October 4 (SeeNews) – The finance ministry of Bosnia's Federation entity said on Wednesday that state-owned motorway construction company Autoceste FBiH will be unable to service its debt unless excise duties on fuels are increased.
Autoceste FBiH, which has previously funded investment cycles with revenues raised on the basis of excise duties on petroleum products and loan deals with international financial institutions, currently has a significant amount of outstanding liabilities, the finance ministry said.
It explained that Autoceste FBiH has planned to conclude new loan deals to fund a new investment cycle but an analysis of its finances has shown that the company's ability to pay back these loans has diminished.
"The ministry of finances has determined that Autoceste will not have a sufficient amount of revenue to properly service its debt under new loan agreements without a hike in excise taxes," the ministry said. It added that this could endanger the company's operations and jeopardise the liquidity of the entity's budget.
According to the ministry, excise duties on motor fuels have to be increased by 0.10 marka ($0.06/0.05 euro) per litre in order to ensure the long-term sustainability of the company.
A hike of excise duties in Bosnia has been postponed several times this year, which has resulted in the IMF delaying the release of the second loan tranche under its current three-year funding deal with the country.
Earlier this year, the European Bank for Reconstruction and Development said it will put on hold up to 400 million euro in loans intended to finance the construction of Corridor Vc through Bosnia, because the country has failed to adopt amendments to excise tax law needed to ensure repayment of the loans.
Autoceste FBiH is responsible for motorway and road construction projects in the Federation, one of two entities that make up Bosnia and Herzegovina. The other entity is the Serb Republic.
(1 euro=1.95583 marka)