Montenegro Struggles to Secure Emirati Investment


News
15 Apr 15

Montenegro Struggles to Secure Emirati Investment

The Montenegrin government is renewing efforts to secure investment from a major Abu Dhabi company after it pulled out of a 300-million-euro deal to build a luxury resort.

Dusica Tomovic
BIRN

Podgorica

The Montenegrin government has offered an alternative site for the construction of the upmarket tourism complex after the Abu Dhabi-based Royal Group company pulled out of a project to build at another location, local media reported on Wednesday.

The new site stretches over two of the most beautiful Montenegrin beaches, Ada Bojana and Velika Plaza, near the coastal town of Ulcinj, according to media reports.

Royal Group representatives have already visited the site near the border with Albania after the government decided to privatise the state-owned tourism company which currently manages the 14-kilometre-long beach.

Two weeks ago, the Emirati company pulled out of a project to build a luxury resort in Dubovica Bay between the coastal towns of Budva and Bar.

The project was due to start in June and envisaged the construction of a five-star hotel in a cove on the sandy Queen’s Beach (Kraljicina plaza), at a cost of about 300 million euro.

Reports said that Royal Group, a company linked to the United Arab Emirates’ royal family, quit the deal after failing to agree on a price for the lease of the beach.

In order to minimise the damage to troubled Montenegrin economy, Prime Minister Milo Djukanovic made an unannounced visit to Abu Dhabi on Monday.

A day afterwards, the government revealed that Djukanovic met Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, for talks on “bilateral relations.”

“The two officials particularly focused on the possibilities of strengthening economic cooperation between Montenegro and the United Arab Emirates and voiced their governments’ willingness to opt for priority projects to this end,” the government said in a statememt.

The dispute over Queen’s Beach has caused conflicts within the ruling coalition in recent months, including allegations of corruption.

Although the government led by Djukanovic presented the project as a priority for the economy, the junior ruling party, the Social Democratic Party, demanded better terms for the deal than those offered by the Emirati investors.

The company offered 21.2 million euro for the 90-year lease to one of the most exclusive locations on the Montenegrin coast, planning to complete the project in eight years.

Montenegrin MPs were to vote on the government’s proposal this spring. As the opposition had also voiced opposition to the plan to lease the famous beach, it was far from certain that the government’s proposal would get a majority.

Economic analysts agreed that Royal Group’s decision will have consequences for the economy, negatively affecting both Montenegro’s GDP and jobs.

But Montenegrin watchdog organisation MANS welcomed the Abu Dhabi company’s decision, saying it had prevented a “harmful” deal.

Source: Balkan Insight (Montenegro)