Budva's ultimatum: Pay or we will activate the state guarantee

The German company WTE from Essen and the Austrian concern EVN gave the Municipality of Budva an ultimatum that on February 14, they will activate the state guarantee of 29,3 million euros, given by the Government of Montenegro, if their conditions are not met. Also, the German-Austrian company intends to leave the plant immediately, and is no longer ready to provide logistics in the management of the collectors on Vještica.

The WTE/EVN concern submitted new conditions to the Municipality of Budva, dissatisfied with the findings of the consulting company "Dr Duhovnik", that an independent expert from the German KfW bank be hired, that a new cash tranche of 6,5 million euros be paid to them immediately, and that they would manage the plant until March 31.

This was confirmed by Budva Mayor Marko Bato Carević to the "News", who was urgently invited to the Government of Montenegro for a meeting on Monday, which was attended by Deputy Prime Minister Milutin Simović, Minister of Finance Darko Radunović, as well as representatives of WTE/EVN.

Tsarević did not want to talk in detail about the course of the meeting, he is convinced that an agreement will be reached. He said that Budva is ready to pay a new tranche of 6,5 million euros, but that the guarantee should be reduced by that amount. He repeated that otherwise, if they were to pay the money and the German-Austrian partner activated the guarantee, the damage to Budva would be 18 million euros.

At the end of May last year, after the agreement with WTE/EVN, the municipality and the government concluded an agreement on the regulation of mutual rights and obligations, according to which the local government then paid WTE 3,25 million euros from its own account, while the government lent it another amount money, so this company, which is majority owned by the Austrian concern EVN, was then paid a debt of 6,5 million euros. The municipality returned the loan to the Government at the end of last year, after the adoption of the rebalance, a month before the expiration of the six-month period.

This was the result of painstaking negotiations because WTE even then threatened to activate the state guarantee of 29,3 million euros, because the Municipality of Budva did not settle its obligations for two full years. The new local government then refused to pay the debt, because the Special Prosecutor's Office is investigating a corruption scandal involving an organized criminal group led by Svetozar Marović.

In May, the municipality and the government agreed with the Germans to settle part of the debt, and then supervise the project, which was entrusted to the consulting company "Dr Duhovnik" from Slovenia. The Municipality paid 164 thousand euros to the consultants for these services.

According to that supervision and the final offer, the Municipality offers a total purchase price of 36.442.823 euros. That price includes investment costs with the design and financing of the waste water treatment plant in Vještica until November 15, 2018, and the costs of managing the plant until September 1 last year.

The municipality has so far paid the German side 9.057.634 euros, 17.685.189 euros the municipality is ready to pay within 60 days after signing the agreement, while 9,7 million euros will be paid after the works are completed and all defects identified by supervision and by determining the actual state of this project by the company "Dr. Duhovnik".

The Slovenian consulting company determined that 32,6 million euros have been invested in the waste water project so far, operating costs are 4,2 million, while the Municipality admitted that additional works amounted to 2,5 million euros, twice less than what was presented and have not been confirmed by supervision. In this way, it was found that the complete costs of the investment, including design and management, amounted to 39,4 million euros. Three million euros were deducted from that amount, which is the amount of established corruption according to the final judgment, so the final price was defined at 36,4 million euros.

This kind of calculation obviously does not suit the German side, which is why the latest terms require President Tsarević to hire an independent expert, although such a thing was rejected at the end of May last year.

Tsarević: 18 million euros would be at the expense of citizens

Tsarević said that they are ready to pay for everything invested in the construction of the plant.

"We insist that the state of the performed works be factually established. I am grateful to the Government and its representatives, who at the meeting went out of their way to overcome the problem together. Activating the guarantee represents a great burden for both the Government and the Municipality, which is the direct debtor. We have several options, we will see how the situation develops, we are ready to pay them 6,5 million euros, but to reduce the state guarantee by that amount. "We would end up in a situation where with the previous payment of nine million and the new 6,5 million euros, if we activated the guarantee, they would charge 18 million euros more than they invested, and that would go directly to the detriment of the citizens," Tsarević explained.