Sustainable and profitable airports in the hands of the state

Airports of Montenegro can be a profitable company that, as announced, 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.
In the document Strategic business plan – current state and dynamic presentation of the path to the projected goal, prepared by the executive director of ACG Vladan Drašković with members of his closest team of associates, it is stated that the simultaneous investment in the development of the airport would be 138.4 million.
The News has access to the document that was submitted in March to the Board of Directors of the state company chaired by Eldin Dobardžić (URA), the Cabinet of Prime Minister Dritan Abazović (URA) and the Ministry of Capital Investments led by Ervin Ibrahimović (BS).
However, none of them has so far commented on that important document, which should help the state in making the final decision on how it will behave towards a valuable capital resource – the airports in Tivat and Podgorica.
Almost five years ago, the former government of Prime Minister Duško Marković (DPS) initiated the procedure for awarding Montenegrin airports in a long-term concession and completed the pre-qualification of interested bidders, and reached the stage when the three bidders who were shortlisted – Aeroports de Paris and TAV, Incheon International Airport and Corporacion America Airports, were supposed to submit final bids. However, this was thwarted by the coronavirus pandemic, since when the process of awarding the airport to the concession has been “hanging”, because the governments of Prime Ministers Zdravko Krivokapić and Dritan Abazović have not decided what they will do regarding the way in which the Montenegrin airport will be further developed and exploited from the end of 2020 until today.
Marković’s government, intending to lease the airports for 30 years, projected in 2020 that they would immediately receive an initial one-off fee of 100 million, an annual variable concession fee in the amount of ten percent of the total revenue generated by the concessionaire, and a minimum investment by the concessionaire of EUR 200 million to airports, so that their capacity would follow the development of tourism and the increase in the number of guests.
In the meantime, Abazović’s Government has announced that those criteria are too low from today’s perspective and that a better offer must and can be obtained for the airports, but to date no formal decision has been made whether the process of awarding the concession, which was started in 2018, will be continued, terminated and a new one started.
Officials of the URA, led by Prime Minister Abazović, publicly in the meantime advocated giving the airport a concession, although the Prime Minister himself later launched the idea of keeping the Podgorica airport under state administration, and giving the Tivat airport a concession to a private operator.
Part of the public speculated that Abazović was trying to “set up” the Tivat airport for the controversial Albanian businessman Šefket Kastrati, a close friend of Albanian Prime Minister Edi Rama, with whom Abazović has extremely close relations. Kastrati’s company is the operator of the international airport in Tirana.
On several occasions, Drašković publicly expressed great reservations about the plan to give the airports into a concession, stressing that it is a double-edged sword and a move from which the state could have a number of harmful consequences, especially in terms of reducing air availability because the concessionaire will primarily to look at their commercial, and not the wider state and economic interests of Montenegro.
Drašković publicly announced that ACG, which has a lot of problems and is burdened by the inefficient management of politicians delegated by the state to the Board of Directors of that company, nevertheless has enough strength and resources to develop, renew and expand its capacities on their own and ensure that the state meets all its needs in the domain of air traffic, which is extremely important for Montenegro as a tourist country with poor traffic infrastructure.
The arguments for these claims were presented by Drašković and his team in the document Strategic business plan – current state and dynamic presentation of the path to the projected goal, which Vijesti obtained from a source in the Government.
– Airports are one of the main infrastructural monopolies, with the possibility of financing their own development at a satisfactory speed, in good quality and with the assumption of management in accordance with the standards of the profession. The management’s recommendation is that the state monopoly should not be converted into a private one – it is written in the document, which adds that “efficient management and financial profit for the owner are achievable goals even without a concession, if the implementation of changes is allowed”.
The document provides a precise SWOT analysis of the strengths, weaknesses, opportunities and threats that characterize the current state of ACG, and suggests the shortest and most efficient possible path to the desired goal – efficient, modern and profitable for the state airports that will meet all its needs.
– During the previous work, the company deviated from the best practice acceptable in the industry, often accepting compromises that served socio-political interests more than the interests of the company. This is also the reason that a large part of the activities that were defined in the airport development master plan from 2011, but also the priorities in the certification of both airports and the necessary investments in safety and security were not realized in the previous period, which is why the company seems to be organizationally and infrastructurally neglected – it is stated in the document.

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