European companies are calling for changes to Serbia’s infrastructure procurement system, citing restrictive tender requirements, uneven allocation of project risks and administrative delays that can limit competition and raise construction costs. The Council of European Business Associations and Chambers of Commerce in Serbia (CEBAC) presented the recommendations in a policy paper covering infrastructure and construction.
The proposals come as Serbia manages one of Southeast Europe’s largest infrastructure investment programmes, covering railways, roads, energy, utilities and urban development. CEBAC represents European business associations and chambers covering more than 2,000 companies. It said Serbia has improved procurement procedures but needs more consistent implementation and tender conditions proportionate to the size and complexity of individual projects.
Tender requirements affect bidder participation
CEBAC members identified cases involving requirements for bidders to demonstrate disproportionately large amounts of previous work, use specified suppliers or technologies, own equipment that was unnecessary for the contract or provide highly specific combinations of staff qualifications. According to the paper, some such conditions can leave only one bidder able to qualify.
A smaller pool of qualified contractors reduces competitive pressure on prices and can also prevent companies offering newer technologies or alternative engineering approaches from participating. CEBAC recommends mandatory justification and prior review of potentially restrictive conditions, particularly for larger projects, together with greater technological neutrality. The organisation also wants procurement assessments to give greater consideration to quality, lifecycle costs, innovation, environmental performance and risk management, rather than focusing predominantly on the initial construction price.
FIDIC contracts raise design-risk concerns
European contractors have also raised concerns about Serbia’s extensive use of FIDIC Yellow Book design-and-build contracts, under which contractors assume responsibility for both design and construction. CEBAC said difficulties can arise when projects enter procurement with preliminary designs that have not been sufficiently developed. Contractors may then assume technical uncertainties while also having to secure approvals from multiple public authorities operating under different procedures and schedules.
European companies argue that this can shift risks originating in public administration to contractors, increasing contingency allowances in bids and reducing the attractiveness of some Serbian tenders to experienced international companies. CEBAC recommends selecting the appropriate FIDIC contract structure on a project-by-project basis. Where designs are sufficiently developed, greater use of the FIDIC Red Book, which separates design from construction, could increase cost transparency and allow specialist engineering and construction companies to compete independently.
Licensing and certification create additional barriers
Engineering licences and product certification were also identified as areas requiring changes. European companies said engineers with substantial international experience can encounter Serbian licensing requirements that make participation in local projects more difficult. CEBAC recommends easier reciprocal recognition of engineering qualifications between Serbia and the EU.
European suppliers have also reported cases where additional local product testing was required despite products already holding EU-issued certifications. Removing duplicated certification requirements could reduce project costs and accelerate procurement as Serbia becomes more closely integrated with European industrial and construction standards.
Supervision independence linked to project risk
The policy paper also addresses the independence of supervising engineers. CEBAC members reported that supervision teams can face informal pressure from investors and contracting authorities, potentially affecting their ability to reject non-compliant work, enforce contractual provisions or make independent decisions.
The organisation recommends stronger conflict-of-interest rules and greater institutional and financial independence for supervision. The issue also affects FIDIC contract administration, lender confidence, claims management and control of cost overruns, making independent engineering supervision relevant to the broader risk profile of infrastructure projects.
PPP framework seen as route to additional capital
CEBAC also supports greater use of public-private partnerships in Serbian infrastructure, while identifying areas where the existing framework needs strengthening. European companies cited uncertainty around risk allocation, insufficient standardisation of PPP contracts and limited institutional capacity among contracting authorities. PPP projects can run for 20-30 years or longer, with private investors financing construction and often taking responsibility for operation and maintenance.
Such arrangements require bankable feasibility studies, reliable demand forecasts, financial modelling and clearly defined performance standards. CEBAC says stronger specialist PPP teams within government and municipalities could help Serbia attract experienced private infrastructure investors. The issue is increasingly relevant as infrastructure requirements grow across roads, railways, energy networks, water infrastructure and urban projects, which cannot rely indefinitely only on state budgets and sovereign borrowing. Properly structured PPPs could provide additional capital if investors can assess contractual and regulatory risks with sufficient confidence.
Procurement efficiency becomes more important
Serbia’s infrastructure programme has significantly expanded transport and energy investment, increasing the importance of how projects are prepared, tendered and supervised. CEBAC’s recommendations include providing technical information earlier, removing unnecessarily prescriptive tender conditions, improving risk allocation and strengthening engineering supervision. The changes would also bring procurement practices closer to procedures used on projects financed by the EU, European Investment Bank and other international financial institutions, where tender documentation typically receives additional review.
For European contractors, the issue concerns the predictability and commercial structure of Serbia’s infrastructure projects rather than the scale of the investment pipeline. The procurement framework determines which companies can compete, how project risks are priced and how construction, design and supervision responsibilities are allocated across major infrastructure programmes.
