The Bosnia and Herzegovina Air Navigation Services Agency (BHANSA) has been officially notified by EUROCONTROL that, based on a court ruling, a freeze has been ordered on all further payments. This results from an arbitration issued in favor of the Slovenian company Viaduct.
The story started back in November 2004 when the government of Republika Srpska, one of Bosnia and Herzegovina’s two entities, awarded a contract to Viaduct to build two hydroelectric powerplants in the country. In 2013, the same government tasked their own utility company to build a similar powerplant, upstream from Viaduct’s ones, therefore jeopardising them.
From a powerplant conflict to a freeze of EUROCONTROL fees
What is the relationship between those projects and Air Navigation Services? At a technical level, none. But the conflict between Viaduct and the government escalated up to the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. In April 2022, the ICSID ruled in favour of Viaduct, ordering Bosnia and Herzegovina to pay approximately 39 million Euro to the Slovenian company.
As a further escalation, Viaduct now tries to get paid back from state assets, and this is where payments from EUROCONTROL to BHANSA become relevant. It is not clear at this time which court issued the order but it is confirmed that EUROCONTROL notified BHANSA about it.
What if BHANSA has to shut down?
BHANSA’s Flight Information Region (FIR) is between Croatia, Serbia, Montenegro, and close to Italy too. Many flight routes between Europe, Greece, the whole Eastern Mediterranean area, and the Middle East exist through this airspace. What would happen if BHANSA had to shut down?
One short-term option, almost an emergency, is to put in place a mechanism known as “tunnelling”. In this mode, aircraft fly straight from their entry point in the airspace to their exit point, without any change in speed, heading or altitude. With proper coordination among the neighbouring ANSPs, this is safe but definitely not optimal and the capacity on such direct routes is reduced.
Another short term option is to avoid the concerned airspace, which is small at European scale. The resulting detours would likely not affect flight times significantly but they would place an additional workload on the neighbouring FIRs.
On a longer term, an option is that one or more of the neighbouring ANSPs temporarily take over the airspace. In this case, it could be the Italian Ente Nazionale Assistenza al Volo (ENAV), CroControl in Croatia, or Serbia and Montenegro Air Traffic Services (SMATSA). Such a takeover can’t be organised on a short term basis and it would concern only the en-route airspace.
Potential airport closures and more
In all cases, departures and arrivals to the airports in the country would be suspended, as the only controllers qualified to handle traffic at those airports are BHANSA employees. The only way to avoid this would be a take-over by another entity, not related to the State of Bosnia and Herzegovina.
Is the payment freeze a way for Viaduct to bring public attention to their claims? Is it an attempt to get their money back, whatever the impacts could be? While such an escalation is legal and understandable from an economic perspective, its effects could be far reaching…
