Give the Tivat airport under concession, keep the Podgorica airport in the hands of the state

Prime Minister Dritan Abazović believes that the Podgorica airports should be kept in the hands of the state, and the Tivat airport should be given under a concession.
Abazović, despite the documented analysis of the executive management of the Airport of Montenegro (ACG) that the company can be profitable and ensure adequate development of Montenegrin airports in the next seven years, believes that the airport in Tivat should be given to a concession and Podgorica airport kept in state hands.
He said that the analysis, i.e. the document prepared by the executive director of ACG Vladan Drašković with his closest collaborators called the Strategic Business Plan – the current state and dynamic presentation of the path to the projected goal, is a good contribution to the process of making the final decision on how will the airports be managed in the future and whether they will be leased to a concessionaire on a long-term basis, or kept under the auspices of the state.
The tender for the concession of ACG was announced in October 2018 during the mandate of Prime Minister Duško Marković, which has not been closed to this day. Abazović and the Government of the recent Prime Minister Zdravko Krivokapić did not deal with this issue.
Privatization of a valuable state resource was a point of contention between the former DPS government and its coalition partner SD, which advocated that this company remain in the hands of the state.
According to the Law on State Property, all property worth over EUR 150 million is decided by the Parliament, so there must be a majority in the Parliament for the final decision on this matter.
Abazović advocates the concession of one of the most profitable state-owned companies, while at the same time valuable resources such as the Kamenari-Lepetane ferry line, the Port of Budva, part of the Port of Bar, the Nikšić Railway Station are returned to the hands of the state.
– The government, in a way, ordered this document. We agreed with ACG that in addition to the current concession procedure, which is a legacy of the former government, with this analysis we will receive another document that could be a guide for some future decisions. That document showed that we need about EUR 140 million to renovate both airports – said Abazović.
He added that the Government did not comment on the document offered to it by Drašković on March 14th, because at that time the pre-election procedure for the presidential and extraordinary parliamentary elections was already underway.
Drašković’s team concluded that ACG can be a successful and profitable company that can provide its own development in accordance with the needs of the state and in the next seven years achieve a profit in the total amount of more than EUR 120 million, with a simultaneous investment of EUR 138.4 million in the development of airports.
News has access to that document, which was submitted on March 14th to the Management Board of ACG chaired by Eldin Dobardžić, Abazović’s cabinet and the Ministry of Capital Investments headed by Ervin Ibrahimović. However, none of them have made a public statement about him so far.
Along with this analysis, Drašković also offered estimates of the possibilities for financing the necessary investments in airports with ACG’s own funds, loans or from the European Union (EU) pre-accession funds, which, for example, have already been widely used in the case of the recent reconstruction and capacity expansion of Dubrovnik airport.
These data show that ACG can operate successfully and realize this investment in both airports without any major problems, based on regular operations and the expected increase in traffic volumes until 2030.
Abazović told the News that the future government must finally make a decision on the fate of the current concession procedure, which was started in 2018 by the Marković government.
She completed the pre-qualification of interested bidders, and reached the stage when the three shortlisted bidders – Aeroports de Paris and TAV, Incheon International Airport and Corporacion America Airports – had to submit their final bids.
However, this was thwarted by the coronavirus pandemic, since when the process of awarding the airport to the concession “hangs”, because the governments of Krivokapić and Abazović have not decided what they will do in relation to the way Montenegrin airports will be further developed and exploited from the end of 2020 until today.
Abazović stated that they did not make a decision on the current tender procedure because of the election process that had been started in the meantime.
– Which I think is also a bit unfair towards pre-qualified bidders. If we don’t want to go any further, we should at least inform them about it, with the fact that if we stop the concession procedure in this way, it will require certain costs for the state and damages of around EUR 400,000. I believe that the next Government should take a position on this – said Abazović.
He, limiting himself to expressing his personal opinion and not the position of the Government he heads, repeated to the News that Tivat Airport should be given a concession, and Podgorica Airport should be kept under state administration.
– After seeing this analysis, I believe that it would be perhaps the best of all models to give the airport in Tivat under a concession to a credible operator, and to keep the Podgorica airport, which requires an investment of around EUR 86 million, under the management of the state. And to enter into a credit arrangement for the Podgorica airport, because it is our largest and most important airport, in the capital of the country, and to equip it for everything it needs, but to continue to be fully state-owned – said Abazović.
He believes that this model is the best, because in this way we would have mutual competition between the airports in Tivat and Podgorica, we would not give a monopoly to someone with both airports under concession, and we would also not keep both airports in state ownership
Abazović agrees that the state, due to various reasons, political friction or the selection of people and management, does not always achieve top results in the management of some companies, and that in this context he believes that the best concept is to give one airport under concession, and to let the other one invest money by lending and thus become able to provide services at the highest possible level.
One of the issues that has not been resolved to date in order to be able to talk about the concession is the ownership of the assets of the Tivat airport.
The local municipality and the residents are asking for the property that was taken from them to be returned.
The entire complex of the airport in Tivat, which consists of 11 cadastral plots with a total area of 545.32 thousand square meters, currently has no owner, and the Municipality of Tivat has magically been left without a valuable property.

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