Press release from session of Coucil for Privatisation and Capital Projects

Podgorica, Montenegro (26 December 2016) – Today’s session of the Council for Privatisation and Capital Projects, chaired by the Prime Minister and Chairman of the Council Duško Marković, approved reports on the investments made on the basis of the Agreement on long-term lease of the "Orjenski bataljon" barracks in Kumbor, Agreement on lease and construction referring to Lustica Bay project in Tivat, as well as the Decision on granting the long-term lease of the Lustica land in Herceg Novi. The reports will be forwarded to the Parliament for consideration and adoption.

The report on the implementation of the Agreement on long-term lease of the "Orjenski bataljon" barracks in Kumbor for the period January 2015 - August 2016 stated that the Azmont Investments company made a EUR 37 million investment in 2015 and 8 months in 2016 , and since the beginning of the project, the whole investment has amounted to about EUR 174 million. The agreement stipulates that, for the first 4 years of its coming into force (13 February 2013), EUR 52 million will be invested in the preparatory work and construction of a hotel, while the total investment in the amount of EUR 258 million will be realised over the 8-year period. Given these facts, the Council noted that the achieved level and dynamics of the fulfilment of contractual obligations confirm that this is a serious investor and high-quality project of great significance for Montenegro. In that context, it is particularly emphasised that the start of construction of the One & Only hotel is a significant milestone for the development of the hotel industry in Montenegro, as well as its positioning in the international tourism market. In September this year, about 850 people, of whom 52% from Montenegro, was engaged at the construction site, while the paid taxes and contributions for 60 employees in the Azmont Investments total over EUR 1, 5 million in 2015.

Report on investment and other activities under the agreement for the Luštica Bay project for the period 2015 - August 2016 reads that the Luštica Development company in 2015 and in 8 months of 2016 made a EUR 36 million investment, and since the beginning of the projects, EUR 85 million has been invested in the construction of villas and apartments of the future hotel complex, and preparatory work for the construction of a hotel, golf course, the marina, etc.

Council adopted the report of factual findings in connection with the contract on purchase of shares of the "Container Terminal and General cargo" AD Bar, drafted by the "Ernst & Young" audit company from Podgorica. By the same token, the Council concluded that the investor "Global Ports" from Turkey is late with the realisation of the investment, which will require the company to submit a clear plan for concluding the agreed investments.

Adopting the report on the implementation of the investment programme – the construction of the "Park" hotel in Bijela, the Council noted that the investor "Carine" from Podgorica has implemented its obligations ahead of schedule. Fulfilment of investment obligations creates conditions for the cancellation of the mortgage, which was placed in favour of the Government of Montenegro as a guarantee.

Council also adopted reports of the Podgorca-based audit company "Eurorev" on the control of compliance with the obligations under the Agreement on purchase of 100% shares of the "Montenegro Defence Industry" Podgorica and the Agreement on purchase of the shares of the Chemical Industry "Poliex" AD Berane. The reports conclude that the investors have fulfilled their contractual obligations.

COUNCIL FOR PRIVATISATION AND CAPITAL PROJECTS