Montenegro, Is airport concession a good solution?, News
Montenegro can request an increase in the one-time fee for giving the airport under concession only on the basis of inflation and price increases. The development and service of the airport in the past period are not a justification for the increase in fees, the president of the Association of French-Montenegrin companies Rajko Uskoković, who was once the director of Montenegro Airlines (MA) in Paris, said in an interview with Dan.
He made this assessment after the Government announced that they would not give the airports for compensation of 100 million and 200 million investments, which were the conditions for granting the concession at the end of 2019 and the beginning of 2020.
– I wouldn’t say that with our work and moves, we contributed to being more attractive than four years ago. On the contrary, we lost hundreds of thousands of passengers from Russia, Ukraine and Belarus, as well as a large number of flights from that market. This especially applies to the airport in Tivat, which last year reached only 50 percent of the traffic from the record year 2019. For example, last year Pristina had 600,000 passengers more than the record year of 2019, but the airport in Pristina is under concession and the operator improves services and introduces new destinations from year to year. In addition, in relation to the period when the tender was announced, the Montenegrin national airline lost hundreds of thousands of passengers (about 300,000) and hundreds of flights. Therefore, we are not in a situation to say that we will increase the concession fee, because in the meantime we have increased the traffic at the airports. Of course, covid-19 and the war events in Ukraine are force majeure and we could not influence them either as a country or as a company that manages airports, but the impression is, and this is also shown by statistics, that regional airports have recovered faster and more successfully than us. – said Uskokovic.
He pointed out that the competition in the region does not stand still and that more than 12 million passengers are transported annually through the airports in Belgrade and Tirana.
– Unfortunately, quite a large percentage of passengers from Montenegro use both of these airports for several reasons, namely the greater number of destinations and the greater offer of capacity at them. Both of these airports are in concession contracts and the state, in addition to fixed income, also has a large indirect benefit in terms of marketing and investment. Consequently, the reputation of these countries is also improving as a large number of travelers choose to use the airport services. This kind of progress entitles the states to increase the sums that future interested tenants will offer if they extend the concessions. And what justification do we have for asking for more money for the airport in Tivat, which lost 700,000 passengers compared to 2019? Economically, there is no term that can explain this – Uskoković pointed out.
According to him, the decisive factor in the Government’s decision about the concessionaire should be the reputation and the development plan, because Montenegro no longer has the right to experiment in many fields, and airports are one of the most important.
He believes that the Government’s announcement that it will finally, after three years, make a decision on the tender for giving the airport under concession is a positive thing.
– The time from the announcement of the tender to today is certainly long, because almost four years have passed, and things have not changed since the start. In the meantime, we had numerous turbulent seasons that brought a smaller number of both passengers and planes to both airports than there were in 2019. Unfortunately, the political instability had the effect of not making a decision and we came to a situation where we began to seriously lag behind the region in terms of airport traffic – said Uskoković.
He pointed out that the possibility of giving one of the airports under concession, in Podgorica or Tivat, can have positive and negative sides.
– It is positive that we will have healthy competition in a small space and that will be a magnet for airlines, and passengers will have improved service as a result of the competition. The negative aspect will be that due to natural limitations, Tivat airport will not be attractive for concessionaires and the state will not be able to receive the compensation it expects. A better option is for both airports to go under concession, and for the state to invest the money from the concession in the development of projects that support the development of the aviation industry and, of course, tourism – concluded Uskoković.
The French are ready for a new round of negotiations
Three years ago, three companies, or consortiums, entered the innermost circle of concessionaires. In the meantime, in October 2021, representatives of the then government had a meeting with them, where they heard their plans for the development of the airport, and now the possibility of negotiations with three bidders has been announced in order to try to negotiate a better price for the airports.
Uskoković said that the consortium of Aeroports de Paris (ADP) and TAV then confirmed that it was ready to pay the requested amount and that it was ready to negotiate new conditions.
– I think that ADP-TAV is ready to welcome an invitation to a new round of talks. This consortium invests non-stop in development, and the decision to take over the airport in Almaty in Kazakhstan during the pandemic is certainly a good sign that this company is positioning itself very high on the world map – he said is Uskokovic.
Apart from them, Incheon Airports and Corporación América Airports were in the closest circle.
Sign up for business news updates & special reports.
- 11/05/2023 Luxury Public Relations for pearl of Mediterranean, Elevate PR for Montenegro
- 11/05/2023 Elevate your business in Montenegro with Elevate PR
- 09/05/2023 Montenegro economy briefing: Wage growth in the public sector and other labour market issues
- 24/04/2023 Without sustainable mining, there is no renewable future
- 08/04/2023 Montenegro economy briefing: Increased indebtedness of Montenegro
- 16/02/2023 Serbian Belkalhan calcite & graphite mining developer invites JV partners for joint critical raw materials exploitation
- 04/06/2023 The compatibility of hydro and solar potential is outstanding
- 04/06/2023 The government will decide on hedging by the end of the month
- 04/06/2023 Half of exports depend on rain