The opposition, however, argues that investors cannot be influenced by site visits and promises, and that the government has been paying more attention to promotional activities over the last couple of years than the one for which it really was elected.
It all began in June with a visit to the construction site for the future ski resort in Kolašin, when Prime Minister Duško Markovic warned contractors at the Kolašin 1600 skiing resort and said they should take additional activities to compensate for the delays and realize this important development project. The construction of the cable car for a price of about 8.98 million euros and a five-year guarantee, in July of last year was awarded to a consortium consisting of the company Eminent from Podgorica owned by Ratimir Saveljić and Austrian Doppelmayr Seilbahnen Gmbh with subcontractors.
This week, Markovic again visited the site of the tourist resort Kolašin 1600 unannounced and said that the work is progressing but will be followed by the competent authorities in the future.
Deputy Prime Minister Milutin Simovic said two months ago, when he visited Cetinje, that the works need to be done in accordance with the contracted dynamics, without delay, since the infrastructure projects from the capital budget, which are being implemented in the Cetinje municipality, are an important prerequisite for accelerating the economic development of the capital.
In Cetinje, there is a delay in construction of a new football stadium, a square and a piazza on Njeguje. A delegate from the Democrats, Zdenka Popovic, said that investors cannot be influenced by the methods Markovic carries out, by site visits and promises.
"It is necessary to protect the Montenegrin economy from suspicious investors, to examine and process resolutely all individuals or institutions that allow the inflow of illegal capital and timely prevent such investments. All investors who bring in legal capital and new technologies to Montenegro will be provided with quick and efficient administrative assistance and create a favorable business environment. Only serious investors are in the interest of completing the investment within the given deadline, as the valorization of these investments will begin as planned by the investor," Popovic said.
Popović PHOTO: Democrats
Montenegro, as he adds, may be attractive to investors today, but the question is whether it will be attractive tomorrow due to many business barriers.
"This is because we have a slow administration, poor infrastructure, bad business climate, lots of parafiscal charges and a huge imbalance between imports and exports. I want to remind you that every investment is accompanied by a big import of equipment that is needed to carry out the works. Investors with negative business solvency are also a major problem. This is also the reason why a great number of projects in the field of tourism have been announced or started but have never been completed. Such is the case with the hotel As in Perazic do, the project on Maljevik worth 300 million euros, the Blue Horizons project worth 250 million euros, the construction of a submarine cable, highway," Popovic said.
The construction of Hotel As in Perazic do began 16 years ago and is now being conducted by the Prosecutor's Office. Two years ago, the Ministry of Tourism filed criminal charges against the investor, Nega turs, for sending a fake bank guarantee of three million euros. In May 2016, the company Budva Riviera, acting on a Government order, filed a lawsuit to the Commercial Court for the termination of the sale contract for the hotel As. Due to the delays in Maljevik Urban Planning, the investor Sonuba Montenegro has not began the construction of the announced luxury hotel complex for more than a decade.
In Maljevik they planned the construction of a hotel complex for which Sonuba purchased 200,000 square meters of land for 32,000,000 euros from the Municipality of Bar in 2017. Calculating the utilities for a future hotel settlement, the budget of the municipality was supposed to reach the amount of more than 53.5 million euros, and it was announced that it would employ between 1,000 and 2,000 workers. The Municipality of Bar informed that in 2011, Sonuba Montenegro, with which the Maljevik land purchase contract was concluded, changed ownership and that the new owner is the company Merkur, also from Russia. It is also reported that their investment interest is somewhat different from the one defined by the then valid DUP for that area. The Municipality of Bar then started, in cooperation with the Ministry of Sustainable Development and Tourism, a procedure for possible alteration of spatial planning documentation.
Although the Blue Horizon complex in Krtoli was bought for 25 million by Qatar fund from HTP Primorje eight years ago and promised to open a new resort with a five-star hotel in 2014, Qatari Diar has only demolished the old Blue Horizon Hotel and has not built any new facility. A resort worth 270 million euro was planned in this area. In the Government Information on the Realization of Priority Tourism Projects for January-June 2018, it is said that Qatari Diar has invested EUR 67.1 million so far. Government Information says that "open issues that can affect the dynamics of project" continues to be the right of use over three large plots within the complex that HTP Primorje sold to Qatari Diar to the right of the property of the Qatar Fund, for which the process is still being lead in Tivat Department of Real Estate. The problem is the completion of court disputes with persons who have co-ownership on the parcels. The contract for connecting Italy and Montenegro with the power cable was signed in mid-November 2010. The total value of the project is about one billion euros, and the completion of the works is planned by the end of 2018. However, the Italian company Terna has hitherto laid a single submarine cable interconnector with the capacity of 500MW, i.e. one of the contracted two wires, with a total capacity of 1000 MW. SDP warns that the public often remains deprived of answers to very important economic issues, such as catastrophic excise policy, tax and revenue increase, unresolved privatization and other problems while ministers are visiting households with several cattle breeding, opening water supply networks for villages or farms with five jobs.
"The government and its representatives are not yet giving answers who has harmed the state by three million euros for the fake guarantees regarding hotel As and why it is still a 16-year-old dangerous ruin in Perazic do. There is no answer either by whose mistake has 'forgotten' the loop on a motorway that will cost citizens 30 million euros. Nor why the highway project is delayed, even though money has been provided," said the member of SDP Presidency and spokesperson Mirko Stanić.
The Minister of Traffic, Osman Nurkovic, announced in June the possibility that the motorway would be delayed. The reason is probably Smokovac's loop, which was not part of the conceptual project but was subsequently designed. Stanić adds that there are no projects that will open jobs in manufacturing and industry, and growth is based on loans or weather conditions (the increase in current production is 97 percent this year, thanks to the rainfalls).
"There are numerous other issues, especially in the field of tourism, wood processing, agriculture, and infrastructure construction, and in some municipalities in the north not even 10% of what was promised was realized," Stanić said.
Stanić PHOTO: Savo Prelević
Significantly in delay is the construction of Hotel Kristal Riviera in Petrovac. A joint investment agreement between the Budva Riviera and the Euromix tours company was concluded at the end of May 2011. It is anticipated that out of a total 269 accommodation units in the future hotel, 48 accommodation units belong to the separate Kristal hotel and becomes owned by Budva Riviera. The deadline for completing a separate hotel was October 1, 2016. After works stopped for almost three years, the construction of the Kristal Riviera Hotel in Petrovac continued. When it comes to project activities planned within the 2018 Capital Budget, which are being implemented in Northern Montenegro, it is necessary to accelerate the dynamics of their realization, regardless of the constraints caused by the realization of contracts with contractors on time-related issues and the completion of appeals procedures which are being run by the State Commission for Control of Public Procurement Procedures,states the Government Information on Realization of Priority Projects in Tourism. The construction of the Montrose tourist complex in the Herceg Novi part of the island Luštica, worth 210 million euros, is also late. The contract for the long-term lease of the Herceg Novi part of the fortress Luštica was signed on September 11, 2009, but came into force on August 26, 2013, by signing the protocol on its legality.
Consortium Northstar and Equest Capital Limited leased 520,000 sqm of land for the construction of a high-class tourist complex. The investor is committed to building a high-star hotel, of the brand Ritz-Carlton and 29 luxury villas with accompanying catering and trading units, on 70,000 sqm of the useful surface.
By contract and annex, Northstar undertook investing €141.8 million in the first phase of the project over the next five years. The investor did not go far beyond the administrative preparation, and the key justification is the lack of infrastructure.
The government said in July that they expect Northstar to realize an investment obligation within the agreed deadline and that the option for the termination of the long-term lease would not be considered. They stated that the investor had fulfilled the contractual obligations for whose realization there were assumptions, and accordingly paid an advance rent of two million euros, in accordance with the annex of two contracts, concluded in February, and "the seriousness which the investor has so far shown in the fulfillment of the first part of the obligations arising out of Annex Two, provides security with respect to the fulfillment of its remaining obligations."
Stanic: There is no oil, so we build a sumptuous highway
Stanić believes the government is running away from the main problem - the inexhaustibility of the existing economic model, as the economy that does not produce any high-grade commodity cannot be prospective unless it finds oil.
"As we have not found it so far, it is clear that the government has put all the cards on building the expensive freeway and the development of tourism that cannot be enough to boost the economy, but because of its low-income rate it is even taxed with the lowest tax rate of seven percent," Stanić says, adding that SDP is committed to the reindustrialization of Montenegro, a significant increase in activities in agriculture and the stronger role of the state in ecological development through investing in the infrastructure (ports, airports) and the energy sector.
He warns that Montenegro is in economic stagnation, as the average wage remains or even decreases over the period, so it has not changed since 2012. "This is the most measurable proof of the country's economic development, and we are witnessing that the minimum and average earnings in countries such as Romania, Croatia, Bulgaria or Serbia increased by 60% in this period," Stanić said.
To change the economic strategy
Popovic warns that almost all macroeconomic indicators show that the Montenegrin economy is only growing statistically. "Without changing the economic strategy there is no safe and real continuous economic growth. Thus, without the development of small and medium-sized businesses especially in the area of production and processing, especially in the agriculture and energy sector, there is no real growth of the economy. Foreign direct investment and investment projects have a general impact on GDP growth, but this is of a limited character," Popovic said.
Text by Biljana Matijasevic, on September 2nd 2018, read more at Vijesti
