PowerChina’s €694mn motorway award resembles the first Bar-Boljare section only from a distance. EU grants, EBRD procurement and public supervision create a different risk allocation – if Montenegro enforces it.
The nationality is familiar; the capital stack is not
Montenegro selected a PowerChina-led consortium to design and build the 22km Mateševo-Andrijevica section of the Bar-Boljare motorway for €693.97mn. The competitive field also included a Cengiz-Azvirt consortium and China Communications Construction Company. On the surface, the result revives the politics of the first motorway section: a small state, a Chinese engineering group and one of Europe’s most expensive stretches of road.
The financing and governance model is different. The European Bank for Reconstruction and Development has committed a €200mn sovereign loan and the European Union a €150mn grant. Procurement followed EBRD procedures, the project is classified Category A for environmental and social risk, and a separate supervision contract worth €14.45mn excluding tax was awarded to IRD Engineering. Montenegro, not a Chinese policy bank, remains responsible for assembling the rest of the funding.
The headline construction contract exceeds identified EBRD and EU support by about €344mn before land, supervision, contingencies and financing costs. That is a simple comparison, not a final financing gap: the state can contribute budget funds or arrange further loans. It nevertheless exposes the key change. Montenegro cannot describe the section as externally financed merely because two institutions support it.
European procurement changes who monitors the contractor. It does not remove the sovereign’s cost-overrun risk.
The first section remains the counterfactual
The Smokovac-Mateševo section was built by China Road and Bridge Corporation with a large US-dollar loan from China Exim Bank. Its tunnels and bridges solved an extreme engineering problem, but the bilateral structure, debt exposure, delays and transparency concerns made the road a symbol of infrastructure risk. Montenegro later hedged the currency exposure and reported cumulative savings as it paid the ninth loan instalment in 2026.
The lesson is not that Chinese contractors are uniquely unsuitable. They build under the contract and incentives they receive. The second section’s open competition, published environmental assessment, lender remedies, grievance mechanism and independent supervision should constrain change orders and social damage more effectively. Those protections work only if the employer supplies designs and land on time, documents decisions and is willing to enforce them against a politically important contractor.
Design-and-build transfers some design responsibility but not geological reality. The new section includes about 3.6km of tunnel and 21 bridges. Unforeseen ground, expropriation and environmental mitigation can still change the price and schedule. A low tender becomes expensive when the client accepts weak variations or compresses review to preserve a political opening date.
The road’s economic return begins outside the toll gate
A motorway section does not generate its full value until it connects markets. Mateševo-Andrijevica improves safety and access in the north, but the strategic case depends on completing further links towards Serbia and improving the route to Bar. Traffic, freight time, tourism dispersion and regional development determine the public return; toll revenue is only one cash flow.
Local companies will see contracts for aggregates, concrete, transport, accommodation, equipment and works. Montenegro should publish the subcontracting perimeter and payment performance without imposing discriminatory local-content rules. The enduring corporate benefit is not temporary construction turnover but better access for northern producers, logistics operators and labour markets after the site closes.
The EU grant is therefore more than cheap capital. It recognises network and cohesion benefits that tolls cannot fully monetise. The EBRD loan adds procurement and environmental discipline. The state still carries demand risk, completion risk beyond contractual remedies, and the opportunity cost of every euro diverted from rail, schools, power grids or local roads.
A model project needs a public cost ledger
Montenegro should report the contract price, land cost, supervision, financing, claims, contingencies and physical progress in one quarterly ledger. Variation orders should identify cause and responsibility. Environmental and resettlement commitments should be tracked with the same prominence as concrete poured. The public should be able to reconcile lender disbursements with work completed.
The project can become a better model of Chinese-EU cooperation: engineering capacity supplied by a Chinese consortium, capital and standards partly supplied by European institutions, and ownership retained by Montenegro. It can also reproduce the first section’s overruns under a more respectable wrapper if oversight turns ceremonial.
Brussels has written stronger rules for this section, but it will not manage the contract from Podgorica. The measure of change is not the bidder’s flag. It is whether Montenegro can use external discipline to become a more competent infrastructure owner – and then apply that competence when no multilateral lender is watching.
