GSP Beograd facing account freeze – Suppliers threatening lawsuits and forced collection due to debt of 6 billion dinars

The Belgrade City Transport Company (Gradsko saobracajno preduzece – GSP), the capital’s largest transport company, could soon face account freeze. The reason is several months of debts to suppliers, of which there are more than 200, as well as state and city utility companies. As eKapija has learned, suppliers alone are owed as much as 6 billion dinars (excluding loans, leasing installments and other debts that GSP has). As a result, lawsuits and requests for forced collection could soon arrive at the address of the company in Kneginje Ljubice Street, which would be the introduction to a very unenviable financial situation and business problems, and in the long run, bankruptcy.

A meeting was organized with GSP’s largest suppliers last week, as a source from the company’s management confirmed to eKapija, during which GSP’s management informed the companies that the company owed to that they did not have the money to pay their debts and that it was not known when the money would be available, because the City of Belgrade had announced for the most recent budget revision adopted on June 25 that part of the funds would be directed to covering the costs of the city’s current operations. However, at the last moment, as we were told, this was abandoned.

The management asked the suppliers for their patience and expressed their desire to continue cooperation, but with a clear indication of the fact that it was not known when the money would be available and how much in the coming period and when the old debts would be settled. As an eKapija source pointed out, some suppliers have been owed money since December last year, although the legal deadline for the public company to settle an invoice is 45 days.

Some of GSP’ largest creditors are DAT Holding, MPN Promet, SDT Group, Cryogas, as well as state and city enterprises such as Elektrodistribucija Srbije, JKP Beogradske elektrane, JKP Gradska cistoca, JKP Beogradski vodovod i kanalizacija and many others. Two city enterprises, as we were told, have already initiated lawsuits and forced collection proceedings through public bailiffs, which is creating additional costs for GSP. In addition, some suppliers have emphasized that they will be forced to suspend servicing GSP’s buses because they cannot finance the purchase of parts and the engagement of workers, and that they are owed indefinitely and it is not known when this will be regulated. One of the suppliers, as our source said, has already announced that in the next 10 days it will be forced to withdraw 50 buses from regular repairs and services if at least part of the debt for the previous six months is not settled, which would mean a huge problem for the functioning of GSP.

Private suppliers have also announced that they will file a lawsuit and force the collection of claims through the courts, which would mean blocking all accounts of the largest city company and completely paralyzing its operations. At the meeting, suppliers stressed that this would be the next step if a solution was not urgently found and GSP did not provide funds, but management said that at this point the City was not willing to react so quickly, and that only “after the summer can we discuss covering part of the debts.”

If the scenario were to come true in which the largest suppliers and creditors initiate forced collection from GSP, it would greatly increase the costs of court fees, lawyers, bailiffs and all procedures, but would also completely disable the regular operations of the largest city transport company, because it would not be possible to procure any new parts, materials and equipment necessary for regular maintenance of buses, trolleybuses and trams, and would consume existing stocks in warehouses, which are already running low and would be used up in about a month if new parts and materials were not procured.

– I am afraid that this situation is not accidental and that a systemic collapse of the company is at work. We have not had such a situation for a long time that we have not received any funds from the City for months, even though the City Assembly adopted the Subsidy Program under which the money for the second quarter was to be paid by June 30. Instead, we are getting promises that GSP will receive a loan of 2.1 billion dinars, first that it will be in July, then that it has been postponed to August, and the latest information is that it will not be in August either. If the situation does not change drastically in the next few weeks, there is a serious fear that GSP will be pushed into bankruptcy when suppliers initiate forced collection – warns an eKapija source.

As the source adds, as if all this were not enough, in May, GSP was deprived of almost 70 million dinars of funds for the transport of passengers due to unrecognized departures in the vehicle monitoring system.

– Although most of these departures were physically made, the system did not register them correctly. The city told us that this would be compensated in another way, but it has not yet been agreed or confirmed specifically in what amount and when. This practically means that GSP cannot plan its revenues and that it only has the costs of hiring vehicles and drivers for the passenger transport carried out, and that the revenues for a part of that service are absent. Although all those responsible are aware of this and declaratively want to help, in practice all these are empty words and the company is without funds – emphasizes our source.

D. Aleksic

JKP GSP Beograd

DAT HOLDING DOO BEOGRAD

M.P.N. promet d.o.o. Beograd

SDT Group d.o.o. Beograd

Elektrodistribucija Srbije d.o.o. Beograd

JKP Beogradske Elektrane Beograd

JKP Beogradski vodovod i kanalizacija Beograd

JKP Gradska čistoća Beograd

Kryogas d.o.o. Beograd

Gradsko saobraćajno preduzeće Beograd

Cryogas

GSP Beograd operations

GSP Beograd debts