Kotor Plans to Invest Five Million Euro in Port

By , 19 Mar 2019, 15:19 PM Business
Port Kotor Port Kotor Sinisa Lukovic

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The company “Port Kotor”, which received a concession from the Government for the management of the aquatorium and the operational coastal area of the port in Kotor for the next 12 years, plans to realize a total investment program worth EUR 5.053.440 during this period.

The port will pay the state a fixed annual concession fee of 250 thousand euros, plus a variable amount of the concession fee of 5 percent EBIDTA (realized profit without interest, taxes and depreciation costs).

In the business plan of this company, majority owned by the Municipality of Kotor, it is stated that out of the total investment program planned, in the first three years of the duration of the concession, 4,328,440 euros will be invested. 

The largest part of the investment program (4,546,440 euros) refers to investment in fixed assets, 350,000 will be spent to improve the status of the port system, while 157,000 euros will be spent on the preparation of project documentation.

In order to realize these investments, the joint-stock company “Port Kotor” will invest more than 3.3 million euros of its funds, and plan two credit loans in the amount of one million i.e. 750,000 euros, with a re-payment deadline period of eight years, a grace period of two years and an interest rate of 4.5 percent.

According to the so-called real business plan scenario, the Port of Kotor expects to have a total income of almost EUR 46.2 million and a total profit of over six million during the 12-year duration of the concession.

Estimation of total revenues for the duration of the concession in the so-called optimistic scenario is over 50.3 million euros, i.e., the total profit of slightly over nine million euros.

In addition to the existing ones, they plan to open 18 new permanent and 6 seasonal jobs.

Port Kotor is based almost exclusively on the acceptance and servicing of large passenger cruisers on the so-called circular tourist trips, whereby Kotor is third in terms of traffic in the Adriatic and one of the leading cruises in the Mediterranean.

"According to the Cruise Lines International Association - CLIA, in 2017 nearly 7 million Europeans decided on one of the round trips, and the global number was 26.7 million people, confirming that cruise trips became an alternative to a classic holiday at land. The concept of cruise trip as part of the tourist activity, according to economic, sociological, psychological, political and other connotations, is a phenomenon that will, by the volume of transactions, approach container transport, the oil and car industry," reads the business plan of Port Kotor.

It is noted that the market in which they operate grows at an average rate of 4.3 percent annually and that the accelerated collapse of the cruising industry imposes the need to create adequate infrastructure prerequisites for safe and secure reception and servicing of modern passenger vessels whose size is also continuously growing. "New investments in technical and technological solutions related to the construction of a new system for the mooring of cruise ships on pylons, which will technologically improve port infrastructure, so their realization will increase the capacity to accept vessels to the port in a safe and secure way; installation of mooring buoys; expanding marine capacity by placing new pontoons; creating conditions for the service of passengers of ships tied to the pylon. So far, they have been able to bind two or up to three medium size ships (150-200 meters in length), while ships over 200-350 meters in diameter were at the anchorage.

After the construction of the planned projects, a berth for two ships of 250-300 meters in length and two smaller ships will be provided, it is stated in the business plan that was accepted by the Montenegrin Government, and by which Port Kotor was awarded the first concession. The construction of the pylon in the sea at about 100 meters from the completion of the current operational coastline at Luza and the installation of mooring buoys for cruisers in the aquatorium in front of Dobrota will cost together about three million euros, while planned investments will improve the marine port capacity of the yacht receipt for about half a million euro.

Pylon and mooring buoys for which the technical project is already finished will significantly increase the level of safety of ships residing in Kotor, especially in adverse weather conditions. It will also contribute to the reduction of air pollution from exhaust gases from ship propulsion systems, which, unlike the current situation when large cruisers in Kotor remain mostly anchored with the so-called dynamic maintenance of the position with performance of the machines, the bow, and stern thrusters, will not be so long and intensively used during the ship's stay in the port.

Since the concession act has brought a number of new business opportunities as it guarantees a monopoly status for performing some activities in the leased aquatorium and the land part, AD Port Kotor also plans to carry out significant investments in the purchase of new passenger boat which will transport passengers on buoys of anchored cruisers to the coast and back.

According to the data on the share capital structure of Port Kotor, the joint stock company, as of December 31st, 2017, the largest share - 56,97% is owned by the Municipality of Kotor. The Fund PIO is the owner of 17.51, and to the Employment Agency of Montenegro belongs 5.87% of the shares. After the collective custody account of CKB, there are owners of 10 percent of the capital. Among the individuals, one of the larger owners of Port Kotor is its former employee, SDP leader Ranko Krivokapic, who owns 1.99 percent of shares. Among the shareholders is the former leader of the Port and former Mayor of Kotor, Nikola Konjevic (DPS), who owns 0.86 percent of shares, businessman Vojin Lazarevic with 0.54 percent of total capital. Employees and citizens hold a total of 5.04 percent of shares of AD Port Kotor.

The Director of the Port Kotor Administrative Sector, Snezana Jonica (SNP), announced that the value of Krivokapic's shares increased for one year and a half by 111,917 euros "thanks to our" poor "management of Port Kotor", thus responding to the allegations of the local SDP.

"On the day when the new Board of Directors was elected in July 2017, the shares of Ranko Krivokapic had a market value of 106,398.6 euros, and on March 16th, 2019 - 218,316.2 euros," Jonica made the comparison her Facebook profile.

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Text by Sinisa Lukovic, on March 18th, 2019, read more at Vijesti

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