The monetisation of assets through concession and applicability in the sector of energy in Bosnia and Herzegovina

Abstract

IntroductionDue to the lack of investment funds the economies of many countries are often in unfavorable and seemingly hopeless situations, where incomes are insufficient for necessary new investment, which slows the growth of capital and production and finally results in slowing of the income growth. Such economic situation is very difficult and depressing, and the way out of this situation is not easy and requires adequate knowledge and hard work.One of the possible way-outs is through new investments, which can change and direct a vicious circle of this situation towards the revival and development of the economy and overall society. The question is how to acquire new investments, i.e. how to ensure the necessary funds for this purpose?In this regard, the governments have an important task, especially in providing funds, which is not easy.Public infrastructure in many countries, because of their high value, may be the basis for new investments, because this potential can be exploited so that the existing resources and assets available in the network industries can provide fresh money. This can be achieved by of assets through concessions. The government's funding source of increased importance is the monetization or insuring the cash flow from existing public assets. Revenues made by the may be used for: new infrastructure funds directly, or for other purposes. On the other hand, this process is a good opportunity for the government to gain the capacity of new technologies, increase production and exports, achieve stability in the energy system, and to avoid possible risks of worn out and technologically obsolete capacities or losses, etc. A new concession management structures, in partnership with the public sector, with an agreed concession fee, receive infrastructure to manage, which in long-term involves: investment, exploitation, maintenance, sale of services and all other that is related to the specific activity and agreement.The process of has to take in account large interests of stakeholders, this is especially true for the public sector, concessionaires, financial institutions and service users. Their interests are different, but they are strongly connected to each other. The implemented project which presented in this paper (page 4.) and experiences of countries show different interests of stakeholders and main reason for 44 Journal of Economic and Social Studies through concessions in network industries. These practical examples of projects and results of research presented in book Achievement in Finance of Infrastructure, PFI/PPP, Izet Bajrambasic, 2004, (chapter: Participants and the interest of the participants in the PPP Projects) give very clear explanation of stakeholders different interests.The interests of the public sector are: new financial resources, continuous provision of public services, faster development of infrastructure and economy, allocation of risks, safety in the delivery of public services, quality of services, market competition and others.Interests of concessionaires are: long-term investments, an increase in the volume of business, applying experience and knowledge in the field of work, protection of property and copyright, freedom of financial transfers and alike.The interests of financial institutions are: long-term borrowings, safety in money return (guarantees for the return of money) and to ensure the priorities of payments compared to other costs in the operational work of the concessionaire.The interests of service users are: to have developed network industry (infrastructure) and services, to have adequate service quality and price, to have the option of investing in these industries and alike.Interests of all stakeholders must be met, achieved and to be sustainable for a longer period of time, because it is the greatest guarantee for the success of the project. …