IS THE CONSTRUCTION OF NINE STADIUMS IN SERBIA ECONOMICLY JUSTIFIED?

20. Dec 2022
Photo: NACIONALNI FUDBALSKI STADION, FOTO: MFIN.GOV.RS

In the budget, 540 million euros are planned for the construction of the national stadium in Surčin with threatening infrastructure. The construction of three local stadiums costs an additional 80 million euros. FIFA and UEFA do not participate in the financing, and the Ministry of Public Investments announces that projects for the construction of five more stadiums are being prepared: in Kraljevo, Kikinda, Kragujevac, Subotica and Niš. If the local stadium costs about 25 million on average, will the new five stadiums cost us an additional 125 million euros?

On the day when the Serbian national team played the first match against Brazil at the World Cup, the stands were full not only at the "Lusail" stadium in Qatar, but also in the amphitheater of the Faculty of Economics in Belgrade.

Just a week before the start of the World Cup in football, the budget proposal for 2023 plans to build the National Stadium in Surčin, which, for now, together with the accompanying infrastructure, will cost - 540 million euros. For that project, Minister Siniša Mali planned for the state to borrow 190 million euros for the supporting infrastructure and another 350 million euros for the stadium.

The fans at the Faculty of Economics also commented that evening. It is interesting how students have different opinions about whether Serbia needs a sports infrastructure. And almost all the relevant views regarding the construction of the stadium were heard at the Faculty of Economics at the time when the Brazilian national team beat Serbia with 2:0.

Veljko Petrović, a student, told Oko magazin that building a stadium can be an example of fiscal policy, which in economic theory can be considered a way to boost the economy in a recession.

"In the medium term, it is justified. But in the long run it has to be seen how profitable it is, where the ticket money will go and whether more money will be needed in the future. So, like everything in the economy, there are arguments for and against," says Petrović for RTS.

The arguments "for" were given by student Dunja Smiljanić, who also watched the game that evening in the amphitheater at the Faculty of Economics. She is convinced that Serbia needs a stadium as a "national landmark". Her colleague Marko Marjanović was against it. He says that there are so many more important things to do in the country than sports infrastructure.

Nevertheless, after the budget for 2023 was adopted by the Parliament on December 9, the construction of the national stadium is unquestionable, at least from the point of view of fiscal policy.

But Serbia is divided on this issue, just like the views of the students who watched the game of our national team that evening at the Faculty of Economics.

"We definitely need a national stadium, because we don't have one." Many countries have national stadiums. It is known that the national team plays there, so I have nothing against it," says Vladimir Stanković, sports journalist and author of the book Montevideo, Bog te vide.

On the other hand, sports journalist in the newspaper "Alo" Miloš Topalović Maratonac reminds that many countries, such as Croatia, for example, do not have national stadiums, writes RTS.

"Those stadiums only work in London and Warsaw." The stadium in Warsaw is in the city center, it has an underground garage that is charged. In Surčin, who is alive and who is dead. How to get to that stadium is a big question. What, will the people on Zeleni venac be waiting for some bus 596? Funny," says Topalović.

The Fiscal Council, in its analysis of the state budget for 2023, writes that sports projects should not be automatically removed from the list of priorities. However, not all documentation has been published, which would confirm that it is a project that is economically and socially profitable in the long term, according to the Fiscal Council.

Vladimir Vučković, a former member of the Fiscal Council and a lecturer at the Mokrogorska School, says that from an economic point of view, these are big expenses, which are already huge on paper.

"In such projects, one should always look at what else can be done with that money." Are there any immediate needs and higher priorities for society. The total cost can only be guessed at. Since it was even in more serious, responsible, precise states, it was many times higher than thought," says Vučković.

This is demonstrated by the example of the construction of "Wembley" in England, where the budget was around 450 million euros, and the final costs reached 900 million euros. The costs for the "Puškaš Stadium" in Budapest, which were projected at 350 million, ended up being higher than 600 million euros.

The idea to build a national stadium was born after the match between Serbia and Albania in the qualifiers for Euro 2016, in which our national team won 2:0. Aleksandar Vučić, then Prime Minister, announced the construction of the national stadium.

At that time, the cost of construction was estimated at 150 million euros. With the rebalancing for 2021, the price has already risen to 250 million euros.

In the budget for 2022, in the planning part of the state treasury, it was seen that the stadium will cost 417 million euros. In the budget for 2023, with the accompanying infrastructure, the price has already reached 540 million euros. That is a little less than one percent of gross domestic product (GDP), i.e. everything that citizens and the economy create in a year.

But that's not all. Because Belgrade is not the only city that will get a big stadium, according to RTS.

For the stadiums in Dubočica, Timok and Loznica, the budget provides almost 80 million euros. The plan is for all three stadiums to be finished next year.

These stadiums are built according to FIFA and UEFA standards, and the newly established Ministry of Public Investments told Oko magazine that the works are fully financed from the budget of the Republic of Serbia.

However, not a single football club from these three cities plays in the Super League, the strongest Serbian football league.

STADIUM MANAGEMENT PUBLIC COMPANY

As announced, the stadiums will be managed by a new public company that will be established. But, as the Ministry of Public Investments says, "currently, construction projects for five stadiums are being prepared, which are also designed according to UEFA category four standards. And that in Kragujevac, Kraljevo, Niš, Subotica and Kikinda". If one local stadium in Serbia costs on average around 25 million euros, does that mean that five additional stadiums will cost Serbia an additional 125 million euros?

The answer to that question is not yet known, according to RTS, but what is known is that a new public company will be established to manage the stadiums.

The mayor of Zaječar says that it is an extraordinary idea that the republic, which financed the construction of the stadium, manages it.

It is an extraordinary idea for representatives of local self-governments, because the business will not be subsidized from the municipal coffers, but what if the subsidies are paid from the national budget, asks RTS Boško Ničić.

"So what? These are all our children. We all need to finance sports!", replies the mayor of Zaječar.

By the way, the annual budget of the city of Zaječar is 1.99 billion dinars. This means that if the city were to finance the stadium on its own, it would have to spend almost one and a half years' budget for its construction, and that without republican money the city would never be able to build the stadium on its own.

The question is, however, how and at which competition did Zaječar get the stadium? The Fiscal Council says that the selection system for infrastructure projects, including stadiums, should be made more transparent. Namely, according to the Regulation on the management of capital projects, a justification and feasibility study must be carried out, with an analysis of costs and benefits. But it must also be published, says RTS.

Economist Vladimir Vučković says that perhaps the resistance to such projects would be less if the results of such a study were publicly presented.

 

Source: rts.rs

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