Montenegro’s Privatisation Council: 2015 draft privatisation plan aims to boost competition and efficiency of companies

    Podgorica, Montenegro (27 January 2015) – At yesterday’s session, chaired by Prime Minister Milo Đukanović, Montenegro’s Council for Privatisation and Capital Projects approved the 2015 Draft Privatisation Plan and forwarded it to the Government for consideration and adoption.

    The 2015 draft privatisation plan, based on suggestions from relevant departments and the Council’s tender committee, sets out objectives and methods of privatisation, companies and capital for privatisation, terms and conditions for their implementation, as well as sites that are to be touristically valorised and social aspects of the privatisation processes.

    According to the proposed projections, the main objectives is to boost competition and efficiency of companies, encourage foreign investment and entrepreneurship, stimulate economic growth, create new jobs and improve the living standards of the citizens. Structural reforms and measures to improve the business environment, which imply the removal of barriers to new investment, will be undertaken in order to achieve these objectives, the Council concluded.

    The privatisation plan will be implemented on the basis of the tender sale of share capital and the application of the model of public-private partnership in a number of companies.

    The Council decided that the implementation of already published public calls will be continued in the following companies: Institute “Dr Simo Milošević” – Igalo, “New Tobacco Plant” Podgorica, Poliex” – Berane, “Montenegro Defence Industry” – Podgorica and Hotel “Park” – Bijela. Preparations for publishing public tenders for privatisation of “Montecargo”, “Montenegro Airlines”, HTP “Budva Rivijera”, HTP “Ulcinj Riviera”, “Institute of Ferrous Metallurgy” and Electrode Factory – Plužine are underway, the meeting concluded.

    The projects to be implemented on the basis of public-private partnerships are: Island “Lastvica” with the “Mamula” fortress (the project is being negotiated), VTK “Mediterranean” – Žabljak, location between Njivice and the estuary of Sutorina River, military-tourist complex “Bigovo”, tourist complex “Ecolodge” – Vranjina, Long Beach -Ulcinj, Ada Bojana – Ulcinj, former barracks “Radoje Dakić” in Žabljak, NTC “Marina” – Kotor, military-tourist resort “Valdanos”, military- tourist complex “Ostrvo cvijeća” and Prevlaka land, site “Donja Arza” – Herceg Novi, Montenegro Post, Ski resort “Savin kuk”, as well as sites Kabala for – Herceg Novi and Buljarica, property of Gornji Ibar –Rožaje, project of golf courses construction in the municipality of Tivat.

    The Council adopted yesterday the report on the results of the public call for privatisation of Montenegro Defence Industry – Podgorica. The consortium consisting of DOO-CPR Impex and A.T.L.- Atlantic Technologies Ltd submitted a bid offering the purchase price of EUR 680,000, implementation of an investment plan in the amount of EUR 400,000 by 31 December 2015 and the obligation of the bidder to carry out the employment programme specified by the collective agreement and the company’s internal documents related to labour relations. The Council decided to forward the share purchase proposed agreement to the Government for approval.

    The Council’s session also addressed the status of the Adriatic Shipyard after four unsuccessful public calls. The Council concluded that the insistence on the concept of selling shares of the company would be a waste of time and result in more financial problems in the company’s operation. Therefore, the Council adopted a proposal, allowing, through programmed bankruptcy, sale of the assets of the company and the conversion of the company in the capacities for overhaul yachts and mega yachts, in which a number of respected investors have shown interest. The concept would, in addition to economic feasibility, have significant ecological dimension, based on the elimination of polluting technologies that have endangered natural and cultural heritage of the bay for decades. In order to implement the project, the Council decided to propose to the Government to adopt Annex II of the concession agreement, which would create conditions for the realisation of the investment.

    Yesterday’s meeting also adopted the report on the results of the public tender for long-term lease of Lastavica island with “Mamula” fortress, and the draft contract for a 49-year lease period. Switzerland-based Orascom has submitted a bid which fulfilled all the tender’s requirements, with an investment worth EUR 15 million over a 15 month-period from the date of issuance of building permits. The proposed project will fully protect and further valorise the site’s cultural heritage and significantly upgrade quality of Montenegro’s tourist offer. The estimated value of the land lease over a 31-year period is worth EUR 987.288.

    The Council accepted the proposal for the privatisation of a part of the assets of “Budvanska rivijera” , namely Hotel “Mogren”, through joint venture, i.e., joint construction, and made a recommendation to the company’s board of diretors to define precisely the Budvanska rivijera’s stake (capital value or share in the project) during the public bidding procedure.

    Source: Government of Montenegro