The Swiss Labour Assistance (SLA) is ending its involvement in the "Swiss House" in the Bosnian city of Mostar. It is pulling out because of a legal dispute and lack of funds. It was to be a model of Swiss aid in the ethnically-divided city.
According to the Neue Zürcher Zeitung newspaper, a local relief organisation will continue its work in Mostar.
The "Swiss House" is an elegant building in east Mostar which was bombed during the Bosnian war. Swiss money helped rebuild it and turn it into a centre for a number of local aid organisations.
Its café has become an inter-ethnic meeting point in the divided city and is well known by the local population. On the upper levels there are adult training courses, a women's group and an advice centre for returning refugees.
The SLA wanted the "Swiss House" to provide the basis for independent local assistance organisations, but it is now pulling out, leaving those left with an uncertain future.
The Swiss state and the Swiss Broadcasting Corporation's charity fundraiser "The Solidarity Chain" are the main benefactors of the "Swiss House". They have both decided to suspend their funding.
Geri Meili, the SLA's department head in Zurich responsible for the "Swiss House" says, with annual costs of over SFr300,000, and very few reserves of its own, the project cannot continue in its current form. Meili maintains there have been major mistakes made in the planning and running of the house.
He says because there was so much money made available at the beginning, the organisation had too many good intentions which it failed to fulfil. They did not make contingency plans for more financially insecure periods, and the project failed to look for alternative sources of funding.
Legal reasons have also led to the SLA having to pull out of the "Swiss House", and even agreeing to drop "Swiss" from the building's name.
Wilhelm Schmid, the Swiss ambassador in Sarajevo, says the project unwittingly became embroiled in a legal dispute over ownership of the building. The lease agreement signed in 1998 with the city of Mostar was put in doubt after it turned out that the building did not belong exclusively to the city authorities.
In 1999, two Croat families who had fled during the war, claimed the right of ownership to apartments in the building. The local authorities had given the SLA a false copy of the land registry form when the lease was signed.
The city proposed to extend the lease on the remaining rooms, or provide alternative accommodation for the groups affected, but no offer has yet been made.
Rebekka Berhardsgrütter of the Swiss Development Agency is positive about what the "Swiss House" has achieved and the future for the local non-governmental organisations it has spawned. She says the project met its objectives, especially in the field of psycho-social counselling and professional training.
But she admits that there are likely to be some job cuts in the new organisation, and alternative financing still has to be secured.