UNMIK/FR/0061/01
FEATURE RELEASE - 17 August 2001

Economic Development

The Challenge of Trepca: Taking a Realistic Approach

By Andy Bearpark

Deputy Special Representative of the Secretary-General for Reconstruction and Economic Development

On 12 August it will be a year since UNMIK took over the Trepca complex. UNMIK's EU pillar, which is responsible for economic development, administers this industrial enterprise. Its head, DSRSG Andy Bearpark discusses the Administration's efforts to attract investment and restart the plant.

Trepca was Kosovo's industrial giant: the largest mining complex in former Yugoslavia and well-known in metallurgical business circles throughout Europe. Times have changed. Trepca, administered since last year by UNMIK, is today a shadow of its former self. However, with the efforts of the international community, with the support and co-operation of the workers, with the help of donors, such as the EU, which have already put substantial money into the complex, Trepca will operate again.
UNMIK is making Trepca a priority because it is the key to economic prosperity and jobs. And jobs are our priority. Nevertheless, people should not expect miracles from Trepca. But they should expect maximum effort on UNMIK's part to ensure that what remains viable of the complex functions as effectively as possible - and provides jobs.
Earlier this year a consortium employed by UNMIK to look at Trepca's viability, completed its financial, technical and environmental report. The report revealed that elements of the complex were salvageable and could work again-but only with benefit of substantial investments. To ready Trepca for such investments, the JIAS Department of Tradc and Industry (DTI) took on international mining expert, Pat Gorman, to act as the complex's interim manager.
A number of repair plans are already on the drawing board. Although Trepca's new international manager cannot give a precise time-frame, Gorman is cautiously optimistic: "We are doing everything possible to make Trepca operational again. Despite many difficulties, including major costs for restarting production, research shows that Trepca can be economically viable. Although it won't be as remunerative as in the past, it is still potentially profitable."

Hurdles

Key areas requiring attention in the coming months include Trepca's environmental hazards, improving safety standards, and asset preservation. But the overriding need is further investment in asset preservation. To that end donor support is being actively sought. Some DM 10.2 million has already been spent on repairs. The reconstruction effort so far is being financed by the EU's European Agency for Reconstruction (DM 5.4 million), the Arcobaleno Fund (DM 1.5 million), the German Fund for Minorities (DM 1 million) and the Swedish Agency for International Development (DM 1.2 million). Potential avenues of commercial investment are also being investigated.
Pat Gorman's Trepca team, in consultation with local stakeholders, have drawn up 71 action plans for the complex's revival. By the end of 2001, or in early 2002, a business start-up strategy will be on the drawing board.

A symbol of future cooperation

Currently Trepca employs some 2,000 workers, with a near equal number of Kosovo Albanians and Serbs. When UNMIK first took responsibility for the complex, the then SRSG Bernard Kouchner articulated his dream of seeing these workers "once again working side by side." Perhaps this vision is a long way from being realized , but it is one shared by the European Union and the rest of the international community. Trepca, as a potent symbol for Kosovo, could one day become a symbol of unity instead of division.
Before then, a number of issues around the ownership of Trepca will also need to be resolved. UNMIK will ensure the complex is properly managed until the proprietorship question is settled. Trepca, of course, shares with many of Kosovo's industries the need to establish clear legal facts. They are undergoing thorough investigation by the DTI's legal team. The difference between Trepca and some other socially- and state- owned enterprises is that Trepca's private ownership is not in dispute. What is needed is definitive clarification as to who is the legitimate claimant.
Thus considerable hard work and effort lies ahead before this industrial giant once again plays its proper role in Kosovo's economy. Cooperation is central to Trepca's revival. Its workers, Kosovo's politicians, the Kosovo public of all ethnicities need to recognise the necessity of co-operating on Trepca, of supporting the earnest efforts to get the complex working again.

BOX: Trepca: The Way Forward

- A strategy based upon action plans and business concepts has been
formulated
- This is now are being validated with the aim of preparing business plans
- Indications are that Trepca may be able to provide work in the future
- The level of economic activity will be much less than achieved in the past
- The strategy requires increased cooperation and commitment from all
stakeholders
- Funding needs to be secured and mobilised during 2001
- Major efforts are underway to raise the necessary funds
- If successful further progress may be made in developing Trepca during 2002

Note for editors
The full document may be consulted online in English at http://www.unmik.org/. Albanian and Serbian versions can be provided.

For a selection of photographs, please contact Mr Ky Chung at 038 504-604 ext. 5467