New funds for the still unopened Chinese vaccine factory in Serbia

In May 2024, it will be exactly two years since the construction of the factory was completed. However, the drives are still standing.

Despite the fact that it is not known if and when the factory will start working, more money has been allocated for it from the city budget.

The decision on new allocations was adopted in December by the Provisional Authority of the City of Belgrade, which performs the work of the assembly and executive bodies until the formation of a new city government after the elections.

The decision states that these funds are allocated from the city's budget for 2023 for "equipment of the site for the construction of the factory".

It was previously announced that this factory, which is being built jointly by Serbia, China and the United Arab Emirates, will produce 30 million vaccines per year.

The foundation stone for its construction was laid by the President of Serbia, Aleksandar Vučić, in September 2021.

However, the factory building is empty, and Serbian institutions do not answer RFE's questions about why the opening of the factory is delayed, as well as whether vaccines will be produced there at all or whether the facility will be repurposed.

The construction of the factory began at the time of immunization with the second dose of the vaccine against COVID-19 in Serbia, in September 2021. The largest number of Serbian citizens received that vaccine then because it was the first available.

The World Health Organization (WHO) declared in May 2023 the end of the global crisis caused by the corona virus.

 

 

What is stated in the decision of the city of Belgrade?

The temporary body of the city of Belgrade adopted at its session on December 15, among other things, a decision by which funds of about 423 thousand euros are allocated from the budget for the year 2023.

This is stated in a document published by Dobrica Veselinović, one of the members of the Provisional Authority and the leader of the opposition "Green Left Front".

 

The funds are intended for technical documentation for arranging the traffic infrastructure leading to the factory.

Part of the funds, about 117 thousand euros, should be spent in 2023, while the other part of 305.5 thousand is scheduled to be spent in 2024.

RSE approached the city of Belgrade regarding the adoption of a decision on the distribution of funds from the city budget for 2023 for the factory, but the answer to the questions about it did not arrive.

 

How much was invested in the factory?

According to data from the Republic of Serbia's budget, more than 36 million euros were spent on the construction of the factory and the accompanying infrastructure.

On the other hand, the money for the factory is provided in the local budget of the city of Belgrade.

According to the decision on the city's budget for 2022, about 9.5 million euros were allocated that year for the construction and improvement of roads connected to the factory.

No funds were foreseen for 2023, while an investment of around 11.4 million euros was foreseen for 2024, but the documents do not clearly show how much money was spent.

RSE did not receive an answer to the question of how much money the city of Belgrade has invested in the factory and infrastructure so far.

According to the announcement on the website of the city of Belgrade from June 2021, the Serbian side will, according to the agreement with the partners, provide land and infrastructure for the factory.

RSE did not receive an answer as to how much Serbian partners invested in the factory.

In the register of the Agency for Business Registers, it can only be seen that the majority owner of the company that manages the factory - the Arab-Chinese company "Hayat Biotech" has paid about 98 thousand euros in cash to the company.

 

What was promised?

"Today we are laying the foundation stone for a new factory, the deadline for the completion of construction is the first quarter of next year," said the announcement of the Government of Serbia, which was delivered to the media in September 2021, on the occasion of the laying of the foundation stone.

The announcement also predicts that the first produced quantities of the vaccine will be intended for the Serbian market, and after that for placement in the region.

Serbian President Aleksandar Vučić said during the laying of the foundation stone that "as early as April 2022, we can appear on the market and supply our and other markets with vaccines."

 

Factory under the jurisdiction of the Ministry of Defense

The public procurement for the construction of the factory was announced in 2021 by the Military Construction Institution "Belgrade" under the Ministry of Defense of Serbia, and before that, in the same year, the Ministry of Defense formally made a decision on the construction of the factory.

In the construction procurement documents, the vaccine factory is designated as a special purpose facility (military facility).

As to why the vaccine factory is a military facility, the Ministry of Defense did not receive an answer.

What can also be seen in the documentation on public procurement for the construction of the factory is that several procedures were carried out in an urgent procedure, that is, the public call for tender was not published, but the price was negotiated with the selected bidders.

In the decision on the award of the contract for the construction of the factory from September 2021, it is written that unforeseen circumstances, such as the worsening of the epidemiological situation and the appearance of more dangerous strains of the virus, were not caused by the will of the client of the work, and it is not possible to conduct an open procedure and issue a public invitation.

It was also stated that due to the urgency of building the facility, it is not possible to act within the deadlines set for the open procurement procedure.

 

The company operating the factory is losing money

A few months after laying the foundation for the factory, the company "Life Biotech" was founded in Belgrade.

The company is located at Jovana Marinović 2 in Belgrade, which is the address of the Republic Health Insurance Fund. Also, the company's email has the extension "rfzo", as if it is a branch of the fund, even though the company is privately owned by the majority.

The Republican Health Insurance Fund did not answer the question why "Life Biotech" was registered at their address.

The majority owner of the company is "Hayat Biotech" from the United Arab Emirates, which has a 67 percent share, and the minority is the Government of Serbia with a 33 percent share.

"Hayat Biotech" was founded by the Chinese "Sinofarm" and the Arab company "G42".

According to the American New York Times, "G42" was the target of an investigation by the CIA, the US intelligence agency, due to its ties to Chinese companies that are on the country's blacklist.

In an article published in late November, the NY Times said that "G42" sells surveillance technology to police forces around the world, including software that is almost identical to that used by Chinese police.

The Government of Serbia cooperates with "G42" in other areas as well.

 

In February 2022, the Serbian Office for IT and E-Government signed a Memorandum of Understanding with the subsidiary "G42" in which, as stated in the announcement, they "expressed interest in working on the joint development of artificial intelligence and cloud computing."

RSE did not receive an answer about the vaccine factory from the Government of Serbia and the company "Hayat Biotech".

The company "Life Biotech", based in Belgrade, ended the year 2022 with a loss of around 104 thousand euros.

 

"Non-transparent" project

Nemanja Nenadić, program director of the Belgrade non-governmental organization "Transparency Serbia", tells RFE/RL that at the beginning, that is, during the pandemic, it was not clear whether building a factory was a good business idea.

"However, what was disputed from the beginning of the story was the very method of contracting this public-private partnership. There was no procedure that would lead to the state partner being chosen through competition," says Nenadić.

Serbian President Aleksandar Vučić announced the construction of the factory in March 2021 while he was in the United Arab Emirates.

After a meeting with Crown Prince Mohammed bin Zayed al-Nahyan, he told reporters that an agreement had been reached on the construction of the factory without giving details of the project.

The Emirates participated in the final, third phase, clinical trial of the Chinese Sinofarm vaccine and was the first to approve the vaccine for use.

Nenadić says that, two years later, this project is being followed by new questions because the public is not aware of the details of the investor's obligations.

"It is not known to the public whether the private partner has failed to fulfill some of its contractual obligations. Secondly, why the planned vaccine factory is not working," he says.

Nenadić notes that the representatives of the institutions are obliged to present these facts to the public, even in case it is estimated that the factory's initial business idea cannot be realized, that it is not profitable.

 

"The constructed building of the factory has value, that's why it is important to know who will dispose of it in case its purpose is changed," said Nenadić.

In recent weeks, around 3,200 people infected with the corona virus have been recorded in Serbia, and there have been no hospitalizations or deaths.

 

 

By Sonja Gočanin

 

//slobodnaevropa.org