The Serbian Economist reports that Montenegrin President Jakov Milatovic has called for the suspension of the process of putting Podgorica and Tivat airports into concession, saying that the current model could cause hundreds of millions of euros worth of damage to the state.
A statement from the presidential cabinet said that the government is implementing the concession procedure for Aerodromi Crne Gore according to the model prepared back in 2019, although the value of the airports and passenger traffic have increased significantly since then. Milatović believes that the current process does not reflect the real value of the assets, does not protect the interests of the state and leaves airport workers without sufficient guarantees.
The Presidential Cabinet has sent a request to the defender of Montenegro’s property and legal interests for an urgent legal and financial analysis of the concession. The statement emphasises that this is a matter of strategic infrastructure, and the government, in Milatovic’s assessment, is trying to shift the responsibility for the controversial decision to the Parliament.
Montenegrin authorities had earlier proposed to concession the airports of Podgorica and Tivat to South Korea’s Incheon Airport Consortium for 30 years. The government claims that after the concession period is over, the entire infrastructure will remain in state ownership and the total benefits from the deal could exceed €1bn.
According to the government, the terms of the agreement include investment in the reconstruction and development of airport infrastructure, construction of new terminals and modernisation of existing facilities. Supporters of the concession believe that without a large external operator, airports will not be able to quickly reach new levels of service and capacity.
Milatovic, on the other hand, insists that the new agreement should take into account the current value of the assets. The State Property Office estimates the value of Aerodromi Crne Gore at around €264.4 million, almost double the previous 2018 valuation.
The President proposes to renegotiate the terms of the agreement. Among the parameters that his cabinet believes should be incorporated into a fair concession model are a minimum lump-sum payment of at least EUR 200 million, mandatory passenger traffic growth of at least 7 per cent per year, investments of at least EUR 300 million, preservation of existing employee rights and a guarantee of no technological redundancy in the first five years.
Milatović also warned that an unsuccessful concession could lead to a reduction in the number of flights, higher airfares and employee layoffs.
Podgorica and Tivat airports have different importance for the economy. Podgorica is a major business and administrative air hub, while Tivat is crucial for the tourist flow to the coast, including Budva, Kotor, Herceg Novi and other resort areas. Therefore, the issue of concession concerns not only the Airport Authority, but the whole model of tourism development, investment and transport accessibility of the country.