Completion of Tender for the Purchase of 85 Short Trams Delayed: Is an Unstable Financial Foundation Postponing the Award of the Contract to Bozankaya?

The final day of 2025 marked the launch of a major public procurement procedure for public transport in Serbia—the tender for the purchase of 85 short trams for Belgrade Public Transport Company (GSP Beograd). Initially scheduled to conclude on February 4, the tender was repeatedly extended following amendments, requests for additional information, and legal challenges. The latest deadline for submitting bids was April 20, yet nearly three months later, the procurement process still has not been formally concluded.

According to information obtained by eKapija, Končar (Croatia), PESA (Poland), and Škoda (Czech Republic) each filed separate appeals during the tender process. However, Serbia's Republic Commission for the Protection of Rights in Public Procurement Procedures rejected all of these appeals.

Only one bid submitted

According to eKapija's sources, the only bid was submitted by Turkish manufacturer Bozankaya. The bid was opened on April 20, 2026, with a total contract value of EUR 187.424.000 excluding VAT (EUR 224.9 million including VAT), equivalent to approximately EUR 2.2 million per tram (EUR 2.465 million including VAT).

The proposal includes trams with a total passenger capacity of 147 passengers, delivery of the first vehicle within nine months, and a 24-month general warranty. The body shell, chassis, and floor structure are covered by a 96-month warranty, while the paintwork carries a 60-month warranty.

The contract also envisages a mandatory 10% advance payment upon signing, with delivery of all 85 trams to be completed within 36 months.

Despite the bid being opened nearly three months ago, no contract award decision has been made, meaning that no agreement has been signed between GSP Beograd and Bozankaya. This raises questions as to why the final decision has been delayed despite the formal procurement requirements having been met, and whether the purchase will proceed at all.

It appears that one of the main reasons appears to be the project's financial viability.

According to our sources, GSP Beograd reportedly lacks sufficient funds to finance the purchase without substantial subsidies from the City of Belgrade. The company is currently burdened with approximately RSD 6.7 billion in outstanding liabilities, while numerous suppliers have suspended cooperation and are threatening legal action and debt collection.

At the same time, the City of Belgrade has reportedly sought financial assistance from the Serbian government for the procurement, but no decision has yet been made regarding such support.

There are increasing indications that the entire procurement may ultimately be cancelled. According to eKapija, the City currently lacks the funds required to provide the advance payment needed to launch production of the new trams. Additionally, there are reportedly pressures from the manufacturer to revise the offered price upward, and the city's leadership has allegedly been informed of this.

Belgrade Mayor Aleksandar Sapic recently acknowledged during a press conference that tram prices have increased by "several hundred thousand euros" since the previous procurement and announced that the City intends to launch a new tender for 80 to 100 trams, despite the current procurement formally remaining active with no contract yet signed.

Unofficially, similar views have reportedly emerged at the national level, suggesting that the current tender should be cancelled and restarted under conditions that would allow greater participation by multiple manufacturers.

Tender criticized from the outset

From the moment the procurement was announced, the Center for Local Self-Government (CLS) and the Centar GSP trade union argued that the tender specifications had effectively been tailored for Bozankaya, preventing major European rolling stock manufacturers from competing.

According to these organizations, the lack of competition would ultimately translate into higher procurement costs and a greater burden on Belgrade's budget.

They have consistently argued that while Belgrade undoubtedly needs new trams, the procurement should be repeated through a transparent and competitive process open to the world's leading tram manufacturers rather than favoring a single Turkish supplier.

The organizations have also proposed that a future tender should include provisions encouraging trams to be manufactured or assembled in Serbia, arguing that such an approach would support domestic industry, create jobs for engineers and skilled workers, reduce production costs, and simplify long-term maintenance.

Concerns over existing Bozankaya fleet

It is worth recalling that the most recent batch of trams purchased for GSP also came from Bozankaya under a procurement process that attracted similar allegations of preferential treatment toward the Turkish manufacturer.

That tender ultimately resulted in the purchase of 25 trams, with the final vehicle delivered on May 5.

According to eKapija's sources, two of the 25 trams have reportedly remained out of service for several months, while on a typical weekday only 12 to 14 of the new vehicles operate in passenger service, with up to six running during weekends.

The publication also claims that many of the new Bozankaya trams have experienced operational shutdowns, reported defects, and warranty claims that have not been resolved efficiently, raising questions as to whether contractual penalties may eventually be imposed on the manufacturer.

CLS calls for immediate new tender

Following the continued delay, the Center for Local Self-Government (CLS) has again called for the procurement to be cancelled and relaunched.

Although the tender formally concluded on April 20 after numerous appeals concerning alleged discrimination and corruption, CLS notes that no contract has been signed and no new trams are in sight.

- Whether the problem lies with disagreements over the evaluation committee, the City's inability to pay the advance, or Belgrade's overall financial difficulties is no longer the key issue, because it is likely a combination of all three. What matters now is that this problematic procurement should be cancelled and a new, fair tender for 85 short trams should be launched immediately, because Belgrade urgently needs them, said Nikola Jovanovic, Director of the Center for Local Self-Government.

CLS is calling for a new procurement to be launched as soon as possible, with support from international financial institutions and participation by the Serbian government.

JKP GSP Beograd

Republička komisija za zaštitu prava u postupcima javnih nabavki Republika Srbija

Centar za lokalnu samoupravu Beograd

GSP Belgrade

Bozankaya

Koncar

PESA

Skoda

Republic Commission for the Protection of Rights in Public Procurement Procedures

Trade Union Center GSP Belgrade

Center for Local Self-Government

purchase of 85 short trams for GSP Belgrade