VZCZCXRO4154
RR RUEHIK
DE RUEHVJ #1297 3241424
ZNR UUUUU ZZH
R 201424Z NOV 09
FM AMEMBASSY SARAJEVO
TO RUEHC/SECSTATE WASHDC 1003
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SARAJEVO 001297 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/SCE 
 
E.O. 12958: N/A 
TAGS: ENRG ECON PGOV BK
SUBJECT: BOSNIA: TRANSCO BOARD APPROVES ACTING MANAGEMENT 
TEAM 
 
REF: A. SARAJEVO 1280 
     ¶B. SARAJEVO 147 
 
1.(SBU) The management board of the state-managed electricity 
transmission company Elektroprenos (Transco) met November 16 
and unanimously approved an acting management team. 
Transco's management board, embroiled in a political battle 
between the RS and Federation (reftels), had not met as a 
whole for over 18 months.  Acting Executive Director for 
Operations and Maintenance Zdenko Vukic told us November 18 
that the board gave blanket approval to proceed with spare 
parts and equipment purchases, necessary to improve and 
repair the power grid in advance of this year's winter 
storms.  However, potential political challenges remain, 
including the transfer of Transco's 110 kilovolt assets. 
 
BOARD RETURNS TO WORK 
--------------------- 
 
2.(SBU) The reconstituted board directed the following 
previous managers to hold their positions in "acting" status: 
Dusan Mijatovic as general manager; Zdenko Vukic as executive 
director for operations and maintenance; Zlatko Vidovic as 
executive director for finance and administration; and Ramiz 
Mehmedagic as executive director for legal affairs.  The 
board also approved hiring permanent staff in their 
respective departments.  Transco has been increasingly 
dysfunctional as the mandates of these officials expired over 
the last several months, culminating with that of the general 
manager September 18.  Vukic told us that the board approved 
equipment procurement to resolve allpending spare parts 
purchases in the next seven ays -- and improve the power 
grid in advance of inter.  He noted, however, that the board 
appointed the same management (who had caused previous 
bockages in company operations). 
 
110-KV ASSET ISSUE MAY CAUSE MORE BLOCKAGES 
------------------------------------------- 
 
3.(SBU) Although not addressed in the November 16 meeting, 
the November 6 agreement between the Federation and RS Prime 
Ministers directed the Transco management board to commission 
a study to consider transferring all physical assets and 
employees related to the 110-kilovolt lines from Transco back 
to the regional Elektroprivredas companies (headquartered in 
Sarajevo, Mostar, and Trebinje (RS)).  Energy experts here 
believe that working out details of such a transfer could 
still cause political blockages with Transco operations. 
 
COMMENT 
------- 
 
4.(SBU) The complexity of disentangling 110-kv assets 
involves human resource, operational and legislative issues, 
which are likely to create more friction within the 
management board. When RS Prime Minister Dodik proposed this 
same 110-kv asset transfer in February 2008, then-Federation 
PM Brankovic refused. Only after PM Dodik raised the stakes 
by threatening total RS withdrawal from the company did the 
Federation agree to consider it. It is possible that 
Federation PM Mujezinovic promised PM Dodik the 110-kv asset 
transfer in their November 6 meeting. If that is the case, 
then Transco will overcome the technical challenges of 
transfer. What will remain of the company following such a 
divestiture is yet unknown. 
ENGLISH