Contract on long-term lease of “Lastavica” island signed: New stage in boosting Montenegro's tourist offer

Podgorica, Montenegro (23 February 2015) – Montenegro’s Minister of Sustainable Development and Tourism Branimir Gvozdenović and Chairman of Orascom Development Holding AG Samih Sawiris signed in Podgorica the contract on long-term lease of the “Lastavica” island with the “Mamula” fortress in the Boka Kotorska Bay, Montenegro.

The contract provides for a 49-year lease period and EUR 15 million to be invested by the Swiss-based Orascom over the next few years in the restoration of the Montenegrin significant cultural heritage, Tourism Minister Gvozdenović told the press conference following the signing ceremony.

’’I am sure this will be just one of a number of projects that are to be implemented in the coming period with a view of protecting our cultural and historical heritage, maintaining the identity that characterises this area and offering a completely new tourist product,’’ he underscored.

In Minister Gvozdenović’s words, the project brings big economic benefits, as it is expected to create around 200 new jobs and bring EUR 7.5 million of revenue for the Montenegrin state over a 15-year period.

"The investment amounting to EUR 15 million will ensure that we have a new five-star hotel with 23 rooms, including a special memorial room, which will further promote history of the island and its fortress. This way, we want to refresh our tourist offer and protect our cultural heritage," Minister Gvozdenović emphasised.

The Lastavica island long-term lease project is expected to be approved in the Parliament of Montenegro and it should be implemented within 18 months after the construction permit is obtained, Montenegro’s Tourism Minister explained.

Orascom’s Chairman Samih Sawiris said he is pleased to be again in Montenegro, adding that his company already signed the contract on the construction of the Luštica Bay sustainable luxury resort a few years ago.

The plan is to build a museum within the Mamula fortress that will remind everyone who visits it of its role in the Montenegrin history, Mr Sawiris pointed out.

He added that this project will help realise the original idea that started with the Luštica Bay project, thus adding a new type of destination to Montenegro’s tourist offer.

Mamula will serve to honor to future hotels like the Four Seasons, One and Only resort in Kumbor and Porto Montenegro, the Orascom’s Chairman Samih Sawiris concluded.

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Tender for the development of the resort was called on 6 December 2013. The goal is to turn the location into a four-star and five-star exclusive resort, with facilities for recreational activities and relaxation well integrated in the environment, which do not compromise cultural and historical character, as well as natural environment of the location.

Swiss-based Orascom Development Holding AG and Vos Investment Group from the Netherlands filed the tender offers for long-term lease of the "Lastavica" island .

Orascom Development Holding AG has offered a 49-year lease period, a lease rate of EUR 1.5 per square metre of land, and EUR 0.9 for the lease of the aquatorium, which is 50 % more than the minimum required amount. The investment project is worth EUR 15 million, creating up to 200 new jobs. The bid also contains a projection for achieving the total direct revenue for the first 10 years in the amount of EUR 7.5 million.

Negotiations with the Orascom Development Holding AG began in May 2014 and were completed at the beginning of the month, which resulted in signing the contract.