The planned extension of Montenegro’s flagship highway from Mateševo to Andrijevica is more than a transport project. It is a test case for fiscal discipline, regional development policy, and Montenegro’s ability to complete large-scale infrastructure under constrained public finances. While construction is expected to begin in the first half of the year, the economic logic of the project deserves closer scrutiny.
The Mateševo–Andrijevica section spans approximately 23–25 kilometres, cutting through some of the most demanding mountainous terrain in the country. Preliminary cost estimates range between €500–550 million, implying a unit cost well above €20 million per kilometre, comparable to the most expensive motorway sections in the region. This places the project among the largest single infrastructure investments in Montenegro’s history relative to GDP.
The strategic argument is clear. The highway would finally connect Montenegro’s underdeveloped north-east to the central corridor, reducing travel times, improving logistics reliability, and supporting tourism and agribusiness in municipalities that have suffered long-term depopulation. However, traffic forecasts remain modest. Initial projections suggest average daily traffic of 6,000–8,000 vehicles, far below levels required for commercial toll viability.
This makes the project fiscally sensitive. Montenegro’s public debt already stands near 70% of GDP, and large-scale borrowing on non-concessional terms would increase refinancing risk. Unlike the Bar–Boljare priority section, which benefited from long maturities, any new debt will likely carry higher interest rates in the current global environment.
From an economic-development standpoint, the highway’s success hinges on complementary investments. Without parallel spending on industrial zones, tourism infrastructure, and cross-border connectivity with Serbia, the road risks becoming a high-cost transit corridor rather than a development catalyst. Experience from similar projects in the Western Balkans suggests that transport infrastructure alone does not reverse demographic decline unless embedded in a broader regional strategy.
The financing structure will therefore be decisive. Blended models combining concessional loans, limited EU grants, and phased construction could reduce fiscal strain. Equally important is execution discipline. Cost overruns of 10–15% would translate into an additional €50–80 million, materially altering Montenegro’s debt trajectory.
The Mateševo–Andrijevica highway is thus not merely a road. It is a balance-sheet decision with long-term implications for growth, debt sustainability, and regional cohesion.
