Montenegro has formally moved into the next phase of its largest transport-infrastructure project, with preparatory works beginning on the Mateševo–Andrijevica section of the Bar–Boljare motorway. The project is valued at almost €700 million and marks the first major continuation of the route since the opening of the priority Smokovac–Mateševo section four years ago.
The new section is more than a construction contract. It is a test of whether Montenegro can deliver complex infrastructure under tighter international financing rules, stronger supervision and a more demanding public-procurement framework. It also places the north of the country back at the centre of the development agenda, after years in which tourism, real estate and services along the coast dominated the investment narrative.
The contract for design and construction was signed by Monteput with the Chinese consortium PowerChina–STECOL–PCCD and is worth €693.97 million. The section will be built under a Design & Build model based on the FIDIC Yellow Book, meaning the same contractor is responsible for both the main design and construction works. That structure is commercially important because part of the design, geological and delivery risk is transferred to the contractor, a critical point on one of the most technically demanding mountain routes in the country.
The route is around 22 kilometres long and runs from Mateševo, at about 1,060 metres above sea level, toward Andrijevica, at roughly 780 metres. This is not a lowland road project. It passes through difficult terrain that requires tunnels, bridges, retaining structures, access roads, drainage systems and carefully sequenced construction logistics. The project includes the Trešnjevik tunnel, 21 bridges with a combined length of about 4.8 kilometres, the Andrijevica interchange and supporting facilities for motorway maintenance.
The capital structure is also different from the political and financial context that surrounded the first phase of the motorway. The new section is financed through a combination of an EBRD loan of up to €200 million, an EU grant of up to €150 million and the remaining amount from Montenegro’s state budget. The EU grant is particularly significant because it is described as the largest grant ever awarded by the European Union to Montenegro, turning the project into a benchmark for how the country uses European money before accession.
That financing mix changes the discipline around the project. European and EBRD-backed funding comes with expectations on procurement, environmental protection, local-community treatment, transparency and reporting. For the government, this creates a more demanding framework than a purely domestic capital project. For investors and contractors, it creates a clearer institutional perimeter around delivery, payments, supervision and compliance.
The supervision contract has been awarded to the Italian company IRD Engineering, with a value of €14.45 million excluding VAT. The supervision period is planned for 90 months, including the period for addressing defects. This is a key part of the risk architecture. On a mountainous motorway section with high civil-engineering complexity, supervision is not a procedural formality. It is the mechanism through which design assumptions, geological findings, construction quality, payment certification and claims control are managed in real time.
The construction deadline is 60 months from the start of works, followed by a two-year defect-notification period. Earlier announcements point to a target completion by the end of 2030, although the actual timeline will depend on final design, geological conditions, site mobilisation, expropriation, permitting and contractor performance. In infrastructure terms, the timeline is ambitious but not unrealistic, provided the early-stage design and access works are managed without major slippage.
For Montenegro’s economy, the strategic logic is clear. The Bar–Boljare motorway is intended to connect the Port of Bar, Podgorica, the north of Montenegro and the border direction toward Serbia, Belgrade and Central Europe. The Mateševo–Andrijevica section is therefore not just a continuation of asphalt. It is the next physical step in a corridor that is supposed to reduce the country’s internal distance between coast, capital and mountain municipalities.
The north is the main economic beneficiary in the domestic narrative. Municipalities such as Kolašin, Andrijevica, Berane, Bijelo Polje and surrounding areas have long faced weaker connectivity, slower private investment and higher dependence on state-driven development. Better motorway access can shorten travel times, improve road safety and make logistics, tourism, agriculture, light industry and property investment more commercially viable. The value is not only in the motorway itself, but in what can become financeable around it.
The Kolašin market already shows how infrastructure can change capital allocation. The opening of the first section improved access to the mountain centre and helped accelerate hotel, apartment and tourism-related investment. Extending the motorway toward Andrijevica can widen that development corridor, especially if local planning, utilities and municipal governance keep pace with investor interest. Without those supporting elements, the motorway risks becoming a transit asset rather than a regional development platform.
The project also carries a fiscal message. A contract of €693.97 million is large relative to Montenegro’s economy and public-finance capacity. Even with an EU grant and EBRD financing, the remaining state-budget contribution will require careful multi-year planning. Cost escalation, claims, delays and design changes could put pressure on public finances, especially because motorway projects in mountainous terrain are structurally exposed to unforeseen ground conditions and construction-risk pricing.
That is why the FIDIC Yellow Book model matters. It is designed for projects where the contractor develops the design and delivers the works, giving the employer a single point of responsibility. In theory, this can reduce interface risk and improve accountability. In practice, the quality of contract administration, supervision and claims management will determine whether that risk transfer actually protects the public balance sheet. Poorly managed Design & Build projects can still generate disputes, variations and delay claims.
The contractor selection also keeps China at the centre of Montenegro’s motorway story, but under a changed framework. The first motorway section was often discussed through the lens of Chinese financing and debt exposure. The new phase is different: Chinese contractors remain involved, but the financing perimeter includes the EBRD, the European Union and the state budget. This gives the project a hybrid character: Chinese construction capacity combined with European financing standards and international supervision.
That structure may become a template for other capital projects in Montenegro and the wider Western Balkans. Regional governments need infrastructure faster than EU institutions and development banks have historically been able to deliver it. Chinese contractors can mobilise quickly and compete aggressively on price, while European lenders and grant providers bring financing discipline and policy conditionality. The Mateševo–Andrijevica section will show whether that combination can work in practice without repeating the governance controversies that surrounded earlier regional infrastructure deals.
The economic return will depend on sequencing beyond this one section. A motorway ending at Andrijevica improves connectivity, but the full strategic value of Bar–Boljare depends on additional links toward the Serbian border and eventual integration into wider European transport corridors. The second section is therefore a necessary step, not the final asset. It reduces one gap, but the corridor’s full trade and logistics value will emerge only when the remaining sections are designed, financed and built.
For Montenegro’s EU path, the project has another layer. Transport infrastructure is no longer only a domestic development issue. It is tied to the country’s integration with the TEN-T network, regional connectivity, public-procurement credibility and the ability to absorb EU funds. The motorway becomes a visible test of accession-era governance: whether Montenegro can manage large contracts transparently, protect the environment, communicate with local communities and produce reliable reporting to international financiers.
The political stakes are equally high. Motorways are among the few infrastructure projects that citizens experience directly, and they create strong expectations. The government will be judged not only on whether works begin, but on whether works continue without large scandals, delays or unexpected fiscal shocks. North Montenegro will expect employment, subcontracting opportunities and faster development. The business community will expect better logistics. European partners will expect standards. The contractor will expect predictable payments, permits and decisions.
The start of preparatory works at Mateševo therefore opens a more demanding chapter than the ceremony itself suggests. The headline number is €693.97 million, but the real test is institutional performance over the next five years. Montenegro is trying to deliver a difficult mountain motorway with European money, Chinese execution, Italian supervision and domestic political pressure for visible development in the north.
The project can strengthen Montenegro’s investment case if it is delivered within a credible cost, time and quality framework. It can also expose the country’s weaknesses if design management, procurement discipline, environmental oversight or budget control begin to slip. For now, the Mateševo–Andrijevica section stands as the country’s most important infrastructure test: a road project that will measure not only engineering capacity, but Montenegro’s ability to turn connectivity into long-term economic value.
