KOSOVO: FINAL THREE PERCENT OF MARCH 2004

UNCLAS SECTION 01 OF 03 PRISTINA 000426

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR DRL, INL, EUR/SCE, AND EUR/SSA, PRM, NSC FOR
BRAUN, USUN FOR DREW SCHUFLETOWSKI, USOSCE FOR STEVE STEGER

E.O. 12958: N/A
TAGS: PGOV PREL KDEM UNMIK YI PREF
SUBJECT: KOSOVO: FINAL THREE PERCENT OF MARCH 2004
RECONSTRUCTION HARD TO NAIL DOWN

REF: 04 PRISTINA 0524

PRISTINA 00000426 001.2 OF 003


Summary
--------------


1. (SBU) Most reconstruction of homes damaged in the March
2004 violence has long since been completed, albeit with some
complaints about the quality of construction and frictions
about the terms of reconstruction of outbuildings. Most of
what has not been rebuilt is in the historic center of
Prizren, where construction has been hampered by the need to
draft a special urban plan due to the area's designation as a
historic site and the unique architecture of the area. When
some of these obstacles were finally overcome recently, it
was discovered that additional funding was needed. Unlike
the substantial majority of the 97 percent of houses already
reconstructed, for which returnees have not materialized,
approximately 36 families have expressed an interest in
returning to Podkalaja, which would represent a
proportionately large bump for this disappointing year. The
project could be put on track to get returnees back in their
homes if the PISG can identify funding and if coordination
among the PISG, UNMIK, and international NGOs involved in the
reconstruction improves. End summary.

Background
--------------


2. (SBU) Podkalaja, an historic and architecturally
picturesque section of old Prizren town, was damaged in 1999
and more severely in the March 2004 riots. Fifty-seven
houses were destroyed (a larger figure than that given in
reftel, arrived at after UNMIK had more fully assessed the
damage and including houses that had been previously damaged
in 1999 and whose occupants had been displaced since then),
and the area's remaining Serb population was displaced to
other parts of Kosovo or to Serbia. A Kosovo government
reconstruction program to rebuild the 934 houses throughout
Kosovo damaged in 2004 has completed rebuilding all affected
homes with the exception of an estimated 26 houses in
northern Kosovo to which Kosovo government reconstruction
officials could not gain access, three in Fushe Kosove/Kosovo
Polje whose Serb owners refused the Kosovo government's offer
to rebuild, and the 57 houses of Podkalaja. The Podkalaja
area was not included in the broader rebuilding program
because the area's designation as a historic site prompted
Kosovar and international officials involved to opt for the
creation of an overall urban plan to reconstruct the district
based on its historic architectural character rather than the
easier and faster house-by-house approach adopted elsewhere.


3. (SBU) International Catholic Migration Commission (ICMC)
personnel told USOP that as many as 36 of the 78 Serb
families who lived in Podkalaja before 1999 have expressed an
interest in returning. The 3 million euros UNMIK estimates
would be necessary to reconstruct the area has not been
allocated, and the lack of funding is exacerbating the lack
of detailed planning since organizations involved in planning
the return are reluctant to come up with detailed plans--or,
especially, to raise hopes of return among displaced
Serbs--in the absence of funds. The ICMC officials contend
that even with an immediate allocation of funds, the project
is at such an early stage of planning that reconstruction is
unlikely to be completed this year. UNMIK returns officials
in Prizren were somewhat more optimistic, and predicted that
if the money were committed by the end of June some returns
might be possible by the end of the year.

Bureaucratic Confusion Contributes to Difficulty
-------------- ---


4. (SBU) The lack of funding for the Podkalaja return
project stems in large part from confusion among several
parts of the Kosovo government, UNMIK, and returns
implementing organizations regarding which of several funds
was supposed to supply the money. UNMIK Regional Returns

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Coordinator for Prizren Tim Hudner and colleagues told poloff
that the Kosovo government had nearly exhausted the 11
million euro fund it had established for reconstructing the
March 2004 damage and that the approximately 3 million euros
needed to rebuild Podkalaja had not been allocated. Prime
Minister Agim Ceku's advisor Avni Arifi, the official in
Ceku's office most directly involved in post-March 2004
reconstruction, acknowledged the fund had been reduced to
417,000 euros that will be used to pay outstanding debts for
other aspects of March 2004 reconstruction, but told poloff
that Podkalaja's historic site designation meant the money
should instead come from a separate fund for preservation of
cultural and religious sites. Deputy Culture Minister
Angjelina Krasniqi, however, told poloff on May 16 that the
cultural and religious preservation fund could not pay for
the Podkalaja reconstruction because that money was reserved
for rebuilding damaged churches. She pinned her hopes
instead on a donors' conference she said the ministry is
organizing for mid-June.


5. (SBU) Unclear lines of PISG responsibility for the
project also have contributed to the confusion over
Podkalaja. The project was originally within the scope of
the commission to reconstruct the March 2004 damage, but
later was subject to involvement of both the Culture Ministry
and the Prime Minister's office as the latter became more
involved to spur progress on overall post-March
reconstruction. During meetings in mid-May with poloff, each
institution seemed to be under the impression that another
office had the lead on the project, and none appeared to have
made a priority of cutting through the red tape of
Podkalaja's historic site status and securing the necessary
urban plans and funding. Krasniqi, who until recently had a
major role in the project, in a May 16 meeting with poloff
demonstrated particularly little interest in or commitment to
rebuilding and returns in Podkalaja. Krasniqi commented that
she doubted more than ten or fifteen Serb families would wish
to return; she suggested building apartments to house
returnees instead of rebuilding the historic district on the
grounds that the old houses had lacked infrastructure, but
acknowledged that no one had consulted the prospective
returnees about this option. Krasniqi predicted that because
Podkalaja is a cultural heritage site, its reconstruction
could take three to five years (though she acknowledged when
pressed that it would be possible to rebuild houses of
prospective returnees first and allow them to move in before
the entire district was completed).


6. (SBU) Confusion among internationals involved in the
project also has hindered progress. The large number of
returns organizations involved has led to confusion over
their respective roles and over the best way to move the
project forward. UNMIK returns officials' overreliance on
figures provided by a local returns organization on the
number of potential returnees and their push to have a
go-and-see visit before more detailed plans are made for the
return also have caused consternation among some implementing
partners, who are wary of raising potential returnees'
expectations before funding for the project is secured.

Some Rays of Hope
--------------


7. (SBU) Two factors suggest that progress on Podkalaja
reconstruction may soon improve, if funding can be
identified. First is the early May appointment of former
Culture Minister Behxhet Brajshori--who initially headed the
commission on post-March 2004 reconstruction--to head the
reconstruction effort again, a decision made by the Kosovar
governmnet due to a recognition that progress was stalled and
something needed to be done. Arifi told poloff that
Brajshori was appointed so that he could "see what went
wrong" and reenergize the process. Another bright spot is
the Prizren municipal authorities' active support of the
return. UNMIK Prizren returns officials and ICMC told USOP
that Prizren Mayor Eqrem Kryeziu invariably attends meetings

PRISTINA 00000426 003.2 OF 003


related to the project or sends a knowledgeable
representative. They also say that municipal returns
officials have been proactive in working with UNMIK and
international implementing partners in drafting the urban
plan and other aspects of return and reconstruction.
Municipal officials signed a memorandum of understanding in
early May with Cultural Heritage Without Borders to draw on
the latter's expertise in technical aspects of town planning
and architectural design.


8. (SBU) Even if funding can be identified quickly,
however, either by the PISG or from other sources, it is
unclear how quickly reconstruction and returns would begin.
Hudner and other returns officials indicated that
reconstruction could begin quickly on some houses based on
plans used for the reconstruction of several Podkalaja houses
after 1999 if funding is committed by the end of June, and
optimistically predicted that some returns could then occur
by winter. ICMC, however, pointed out significant
disorganization among the internationals involved in the
process and noted that more work would need to be done both
to determine the real level of interest among returnees and
to resolve outstanding property issues.

Comment
--------------


9. (SBU) The Podkalaja return project has been the weak
spot in the government's otherwise completed effort to repair
the damage inflicted to Serb homes in the March 2004 riots.
The Kosovar authorities have too often seen the complications
caused by the area's historic status, and the resulting
bureaucratic ambiguity, as an excuse for inaction rather than
a challenge to be overcome. If funding can be quickly
identified, the good cooperation of the Prizren municipal
authorities and ongoing efforts by UNMIK and implementing
partner NGOs could help get the reconstruction and return
process on track. However, expecting returns to occur this
year is probably overly optimistic.


10. (SBU) USOP clears this cable in its entirely for
release to UN Special Envoy Ahtisaari.
GOLDBERG