Session of Council for Privatisation and Capital Projects

    Podgorica, Montenegro (21 September 2015) – At today’s session, chaired by Prime Minister Milo Đukanovicć, the Council for Privatisation and Capital Projects adopted, in line with the decisions reached by the Parliament of Montenegro, the reports on the implementation of the investments under the Agreement on long-term lease of the “Orijen battalion” barracks in Kumbor, Agreement on long-term lease of Luštica Peninsula (municipality of Tivat, Luštica Bay project) and Agreement on long-term lease of Lustica Peninsula (municipality of Herceg Novi).

    The report on the implementation of the Agreement on long-term lease of the “Orijen battalion” barracks in Kumbor reads that the Azmont Investment invested EUR 90.6 million in the period from 2013 to August 2015. A total of 65 people were employed as the project’s managers (in the Azmont Investment and Triangle Montenegro), and 445 people work on the construction site. Over the reporting period, the investor allocated funds amounting to approx. EUR 470,000 for social programmes, donations and sponsorships, thus exceeding the contracted amount of the investment by 56%.

    Considering the report on the implementation of the Agreement on lease and construction referring to “Luštica Development”, the municipality of Tivat, which was signed on 23 October 2009 by the Government and the Orascom Development Holding, Orascom Hotel & Development SAE, Orascom Hotels Holding SA and Onsa Holding Ltd., the Council noted that so far investment totals EUR 69 million, including the payment of an EUR 10 million rent and previous preparatory works. Forty-one persons were hired as the project’s managers, while 300 workers on average are present on the construction site every day. Over the reporting period, the investor allocated approx. EUR 700,000 for social programmes, donations and sponsorships.

    Agreement on long-term land lease in the municipality of Herceg-Novi, with a commitment to construct, develop and manage an exclusive tourist complex, was signed on 11 September 2009 by the Government of Montenegro and the consortium Northstar Ltd. Podgorica and Equest Capital Limited Jersey UK. The Council noted that the investment is not being implemented in line with the planned dynamics and that it is essential that the authorities continue monitoring the obligations defined by the agreement.

    Pursuant to the conclusion of the previous session and requirements of the trade union’s representatives, the Council discussed the report on the implementation of contractual obligations in connection with the shares sale agreement of the company “Container Terminal and General Cargo” AD Bar, drafted by the Ernst & Young Montenegro auditing company. In the period from 17 January 2014 to 30 April 2015, an investment worth approx. EUR 1.2 million was made, and EUR 4 million was paid for severance and associated taxes, which represents 65% of the contracted amount (EUR 6.5 million).

    At today’s session, the Privatisation Council also reviewed an initiative for the termination of the sale agreement of the former Military Hospital Meljine and tasked the relevant ministries to prepare as quickly as possible detailed information on the degree of implementation of the privatisation agreement and submit it to the Government for consideration and adoption.

    The Council also endorsed the information with the Draft Annex II of the Agreement of sale of 80,9642% of the share capital of the “Centre for Rest, Recreation and Medical Treatment” Igalo AD, and proposed to the Government to task the Ministry of Sustainable Development and Tourism to continue to monitor, in cooperation with the Secretariat for Development Projects, the activities being undertaken on the reconstruction / construction of “C” and “E” blocks and to submit reports to the Government of Montenegro on a regular basis.

    Source: Government of Montenegro