Serbia’s Commission for Protection of Competition faces questions over a €7.22 million property acquisition at Belgrade’s Prokop railway complex and procurement procedures involving €4.61 million in contracted expenditure.
The State Audit Institution (DRI) found that the regulator purchased approximately 2,167 square metres of commercial premises and 20 parking spaces from Railway City without prior approval from the Republic Property Directorate or the prescribed written-offer procedure. Auditors also identified weaknesses in procurement planning, supplier selection and internal financial controls.
Property purchase and additional costs
The transaction covered office space on the third, fourth and fifth floors of a Prokop building. The contract allocated €6.66 million for offices and €560,000 for parking spaces, excluding VAT. This equates to approximately €3,075 per square metre and €28,000 per parking space.
The premises were delivered partially completed. The Commission’s financial planning also included RSD 235 million, or around €2 million, for construction works and design documentation related to fitting out the property. This allocation was linked to a framework agreement and does not establish that the full amount has been spent.
The seller, Railway City, is a Belgrade real estate developer involved in the wider development of the Belgrade Centre railway station complex. Business registry information identifies as its owner. The audit did not establish wrongdoing by the company or its owner.
Commission disputes audit interpretation
DRI concluded that the Commission failed to comply with requirements under Serbia’s Law on Public Property by proceeding without the required authorisation and written-offer procedure.
The regulator argued that its independent status and previous guidance from the Ministry of Finance influenced its understanding of the rules. It also maintained that the purchase was financed from its own resources under approved financial plans and was commercially justified. The Commission said it would seek the Property Directorate’s position in future acquisitions, while maintaining that this should not be considered an admission of wrongdoing in the Prokop transaction.
Procurement deficiencies and internal controls
Auditors identified shortcomings in five procurement procedures worth approximately RSD 542.22 million (€4.61 million). These included inadequate market research, insufficient documentation of estimated values, weaknesses in qualification requirements and problems with bid evaluation.
One joint procurement with the Ministry of Finance for property management and maintenance services had an estimated value of €2.47 million, including an expected Commission share of around €510,000. In a separate procedure for construction supervision, the selected bidder group comprising Quiddita, Technosector and Ensol failed to provide all required documentation, and the contract was not concluded.
DRI also found that the Commission had not established internal auditing in line with the applicable framework and issued 12 recommendations to improve financial management and procurement controls. The audit found that employee salaries and related payments examined for 2025 complied with the relevant rules. The €4.61 million represents the value of audited contracts, not proven financial losses or overpayments. The findings raise questions about the Commission’s own financial oversight and compliance procedures, given its role in enforcing competition rules and monitoring market conduct.
