Projects Home

Multi-Sector U.S. Government Assistance for the Infrastructure Reconstruction Program for Bosnia and Herzegovina

Political and Economic Context

Prior to the war, the population of Bosnia and Herzegovina was approximately 4.4 million and the per capita income was approximately US $1,900. As a result of the four year war, per capita income declined to US $500 and the population declined by approximately 1 million. The four year war caused extensive damage to the physical infrastructure in the country and disrupted the economic systems which existed prior to the war. Roads, bridges, power stations, telecommunications facilities, schools, commercial buildings, hospitals, and residential areas were hit repeatedly by artillery fire and many facilities were completely destroyed. In addition, water districts, factories, and transmission and distribution lines were also extensively damaged. Even in areas where the infrastructure damage was limited, there was virtually no maintenance, thus equipment and machinery were abandoned and facilities were shut down. Other serious effects of the war included extensive damage to the country's water and sewer system, and a lack of adequate health facilities and trained medical staff and physicians.

The World Bank estimated that the total loss of productive assets in Bosnia and Herzegovina to be in the range of US $10-15 billion, not including other non-economic losses. The massive needs for the reconstruction of Bosnia and Herzegovina required a concerted donor aid program from the world community.

The World Bank, along with the European Bank for Reconstruction and Development (EBRD), took a lead in organizing and developing a reconstruction program for the country, and many other agencies throughout the world contributed to this initiative. The World Bank's reconstruction program included a $150 million Emergency Reconstruction Project to be implemented during 1996.

Immediately after the signing of the Dayton Peace Accord, the U.S. Government (USG) began developing a framework for immediate economic reconstruction and infrastructure rehabilitation strategy for the country. In November 1995, the U.S. State Department and the U.S, Trade and Development Agency (USTDA) requested CORE International Inc., (CORE) services in designing a blue print for a USG assistance strategy to address the priority reconstruction needs of Bosnia and Herzegovina in consultation with the other donors, most notably The World Bank.

Top

CORE's Project Activities

In order to gain a first hand understanding of the reconstruction needs and priorities of the Republic, the USG sent a joint mission consisting of USTDA and USAID officials, accompanied by an expert consulting team from CORE. The objectives of the mission were to (i) perform an evaluation of critical high priority infrastructure projects requiring immediate reconstruction assistance; (ii) develop an estimate of the U.S. funding assistance required to foster an immediate implementation of the critical initiatives in a least cost approach; (iii) prepare a U.S. government assistance strategy to not only assist in the reconstruction and economic development of Bosnia and Herzegovina but also to foster greater private sector participation; and (iv) identify and prepare projects which provided opportunities to the U.S. engineering and manufacturing industry to participate in the reconstruction and development process of the country.

The mission reviewed close to 400 individual projects in various infrastructure sub-sectors. In consultation with the government officials and donors, CORE's activities focused on identifying priority projects in the transportation, energy, telecommunications, and wastewater and solid waste management sectors. The USG assistance strategy prepared by CORE identified the need for immediate assistance in the amount of $39 million in all four sectors, aimed at fixing critical bottlenecks and addressing basic human needs. The strategy also developed a 5-year investment program for both the reconstruction and developmental phases in the amount of $1.2 billion. This strategy was presented jointly by the USG representatives and CORE at the donors' meeting in Paris in February 1996.

Top

Key Accomplishments

The specific recommendations included in the USG assistance strategy developed by CORE were instrumental in mobilizing and leveraging a large number of bilateral donors as well as facilitating and accelerating a number of loan projects planned by The World Bank and EBRD, London . The discussions of the USG assistance strategy for Bosnia and Herzegovina at the Paris Donors Conference in 1996 led to a sizable leveraging of other donor pledges aimed at enhancing the basic institutional infrastructure of the Federation Government as well as the governments of Bosnia and Herzegovina and Republika Serbska. In view of the serious immediate infrastructure reconstruction needs in the country, the USG assistance strategy was also instrumental in convincing The World Bank and EBRD to use a "dedicated procurement strategy", thereby avoiding the long international competitive bidding (ICB) process, the standard required process for all procurements under World Bank and EBRD funding. This accelerated the project implementation process and provided not only the immediate reconstruction of critical infrastructure, but also the timely delivery of basic human services.

Subsequent to this initial phase, CORE's services were further engaged by the U.S. Government to provide expert advisory services for infrastructure rehabilitation and economic reconstruction during the post emergency period (1997 onwards). CORE closely worked with the Office of the High Representative (OHR), the UN administrative agency in Bosnia and Herzegovina , in continuing to develop and mobilize financing for over 200 separate infrastructure projects throughout the country. The services provided by CORE also included further leveraging of bilateral and multilateral assistance, which was implemented by OHR under the supervisory responsibility of CORE.

Top
Projects Home