BHANSA’s accounts frozen: Air navigation agency teeters on the brink

The blockade stems from a 2022 arbitration ruling in favour of the Slovenian company Viadukt. While not directly linked to BHANSA's operations, the ruling has had significant repercussions for the agency.

"The account blockade prevents BHANSA from operating normally, with route charges—comprising 90% of its budget—currently inaccessible. To mitigate the impact, BHANSA has implemented precautionary measures, including salary reductions for the previous month. This decision was made in consultation with union leaders to ensure transparency, legality, and the protection of employees' rights," the agency stated.

The situation in Bosnia and Herzegovina has been further destabilized, with recent developments placing BHANSA at the centre of the crisis. Despite the challenges, BHANSA expressed confidence in its resilience and ability to overcome the crisis, emphasizing its commitment to emerging stronger and more prepared, even if sacrifices are required.

The agency called on relevant institutions to recognize the urgency of the issue and find a solution to ensure uninterrupted operations, safeguard employees, and maintain the country's international reputation in civil aviation.

Viadukt arbitration and broader implications

The financial strain on BHANSA is part of a larger legal and financial fallout for Bosnia and Herzegovina following its loss in the arbitration case against Viadukt. The Washington arbitration panel ordered BiH to pay €40 million, with the debt increasing daily due to interest. Failure to pay could lead to the seizure of Central Bank properties in Banja Luka, Mostar, and Brcko District, as well as further disruptions to BHANSA's funding from Eurocontrol, jeopardizing air traffic in the country.

The dispute originated in 2004 when the Republika Srpska government granted a concession to Viadukt's subsidiary, HES Vrbas, for hydroelectric plant construction on the Vrbas River. The same year, RS awarded a concession for HE Bocac 2, effectively blocking Viadukt's original project. Viadukt initiated arbitration in 2014, claiming damages from the contract termination.

The arbitration ruling has broader implications, with additional arbitration cases looming over BiH. Deputy Finance Minister Muhamed Hasanovic warned that Republika Srpska's financial liabilities could further burden the state, describing the situation as an attempt to financially destabilize BiH.