BiH gov't seeks budget rebalance amid arbitration crisis over airspace control

SARAJEVO, April 17 (Xinhua) -- Bosnia and Herzegovina's (BiH) Council of Ministers has adopted two key conclusions to address the growing fallout from an international arbitration case, Minister of Communications and Transport Edin Forto announced Thursday.

BiH risks losing control of its airspace after the country's air traffic agency was hit by a funding freeze, a consequence of international arbitration enforcement, warned the minister.

The crisis stems from a ruling by the International Centre for Settlement of Investment Disputes (ICSID), which sided with a Slovenian firm, Viadukt, in a case against the government of Republika Srpska, one of BiH's entities, over the cancellation of a hydropower concession.

The legally binding award now exceeds 110 million BAM (64 million U.S. dollars), with interest accruing daily.

The enforcement came through a Belgian court, which ordered Eurocontrol -- the intergovernmental organization responsible for coordinating and collecting air navigation fees in Europe -- to freeze payments owed to the BiH Air Navigation Services Agency (BHANSA). The move triggered salary cuts and threatened BHANSA's operations.

The Council of Ministers tasks the Ministry of Finance and Treasury to propose a budget rebalance that would enable payment of the award.

The second conclusion calls for emergency financial assistance to BHANSA to prevent further disruptions that could lead to the loss of BiH's airspace control and closure of national airports.

Forto stressed that measures must be implemented by next Tuesday to prevent further damage to BiH's finances, reputation, and aviation safety. ■