The government should reopen a dialogue with social partners and all relevant entities, within which all aspects of the potential concession for Airports of Montenegro (ACG) would be presented, in particular an analysis of the cost-effectiveness, long-term economic effects and impact on jobs and economic development.
The dialogue should also provide clear answers to key questions - what are the specific benefits that the state would achieve by granting the concession, what are the guarantees that the concessionaire will invest in the development and modernization of infrastructure, what will be the fate of the employees, and whether there is a real need for a concession model if ACG is making a stable profit.
This is stated in a letter prepared by the executive boards of the Independent Trade Union of Airports of Montenegro (NSACG) and the Trade Union of Airports of Montenegro (SACG) for the Presidents of the State, Government and Parliament, Jakov Milatović, Andrija Mandić, and Milojko Spajić, the Minister of Transport Maja Vukićević, and the President of the Government Commission for Concessions and all parliamentary groups in the Parliament. "Vijesti" has access to the letter from the trade union organizations that are part of the Union of Free Trade Unions of Montenegro.
The letter should be submitted to the highest state officials today, and was signed by the President of the NSACG Milivoje Dragićević and the President of the SACG Damjan Radulović.
"Airports represent not only transport hubs, but also strategically important economic resources that contribute to the improvement of tourism, the creation of new jobs and the overall economic growth of the country. Any decision regarding their status must be made with maximum attention and consideration for the long-term interests of the state, its citizens and future generations," the letter states, stressing that it expresses deep concern for the future of a key state infrastructure resource.
The government recently decided to continue the pre-qualification tender from 2019 and to ask the three shortlisted bidders for the concession to submit final offers. The top executive announced that depending on the quality of these offers, they will decide whether to accept one of them, or whether the management of the airports in Tivat and Podgorica will remain in the hands of the state-owned company.
After the pre-qualification procedure, three bidders remained in the race for the concession: the South Korean company "Incheon International Airport", the Luxembourg-based "Corporacion America Airports" and the French-Turkish consortium ADP-TAV.
The need for transparency
The letter from the trade union organizations also states that, as employee representatives, they believe it is unacceptable that, as has been the case so far, a decision on the fate of ACG is made without a transparent and detailed analysis of all options and without taking into account the views of employees, the professional public and citizens.
"Moreover, given the transitional problems facing Montenegro and the prevailing opinion of its citizens that no domestic privatization process has been implemented properly, the question arises whether the time has finally come to protect what remains of the resources of national interest through a referendum process? Certainly, a concession is not the same as privatization, but in the conditions of a neoliberal economy it almost is, given the 30-year period envisaged by the concession procedure. With the above in mind, the Union of Free Trade Unions, as a representative trade union center, adopted the Resolution on the Protection of Economic Entities of National Interest and called on citizens to exercise their constitutional right and support with their signatures the Proposal for calling a state referendum, in which one of the questions will be - Are you in favor of the Parliament of Montenegro adopting the Law on the Preservation of Economic Entities of National Interest in Majority State Ownership?".
They state that the Government of Prime Minister Duško Marković began the pre-qualification process for granting the airport a thirty-year lease in 2019, but that the process has not been completed.
"The International Finance Corporation (IFC) consultant stated in a letter to the Government in 2020 that he did not stand behind the passenger flow analysis carried out before the pandemic, warning that the Airport Development Master Plan from 2011 was outdated and that a new one had to be prepared, and stressed that 'IFC's position is that the parameters defined by the Concession Act jeopardize the feasibility of the transaction and the integrity of the tender procedure and that the proposed form of the Concession Agreement does not protect the interests of the Government of Montenegro'. It also warned of unresolved property issues related to the almost complete real estate on which the Tivat Airport was built and the area to which it should expand, because without this the concession could fail. The consultant also pointed out that 'Montenegrin laws do not recognize tripartite contracts', which is why IFC believes that this may result in no final bids."
The strategic plan, developed by Airports of Montenegro, envisages that they will collect 120 million euros from their own operations in the next seven years, and that around 17 million are still needed for complete modernization.
In addition to the shortcomings of the still ongoing concession procedure pointed out by the IFC, the analyses, as stated by the trade unionists, also pointed to "potentially insufficiently well-defined conditions from the public call for interested bidders, an outdated analysis of passenger flows, and especially the lack of so-called minimum technical requirements for the future concessionaire, on the basis of which their offers for the development of Montenegrin airports could be compared at all."
The issue of political stability
In the last few years, Montenegro has experienced several changes of government, which can significantly complicate, and potentially even prevent, as the letter states, the long-term planning and implementation of large infrastructure projects, such as the airport concession.
"Major decisions, such as this one about the future of the airport, are politically sensitive, as different political parties and interest groups often have diametrically opposed positions, further highlighting the need to achieve the broadest possible consensus on issues of national interest," the letter emphasized.
It is emphasized that, according to data from 2024, ACG generated around 10 million euros in profit, which, they estimate, clearly shows that the company has the capacity for further independent operations and development, because by multiplying that amount by 30 years, the duration of the concession, we arrive at a figure of 300 million euros.
"Taking into account the projected growth of air traffic in Europe according to data from Eurocontrol and other relevant entities, ACG's expected revenues for the next 30 years could reach up to 689 million euros, which is more than Montenegro would receive through concession fees and investments."
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The trade unionists state that although they are somewhat encouraged by the publicly stated positions of the Minister of Transport Maja Vukićević and the Executive Director of ACG Rok Tolić, from which it can be concluded that they prefer a model in which airports remain state-owned, they must still express concern and demand a review of the expediency of the concession procedure, i.e. that all relevant entities, especially employees whose future is directly linked to the fate of ACG, be included in it.
"We would like to specifically mention the statement made by Roko Tolić in public appearances - 'I would not be happy about that because that is probably where my story ends. Personally, I would be closer to the option of continuing on our own, because I have great confidence in all ACG employees', which met with general satisfaction among ACG employees, and especially since he is an advocate of the idea of preserving employees with the intention of investing in ACG's existing staff, the trade union organization hereby shows absolute confidence in the current ACG executive director."
Examples from the region warn
The letter states that the historical experience of concession models in the region has shown that this arrangement has not always brought the promised benefits.
"The examples of airports in Ljubljana, Belgrade and Pristina clearly indicate problems in implementation, from reduced investments to employee layoffs and deterioration of service quality. In contrast, airports that have remained state-owned, such as those in Split, Dubrovnik and Sarajevo, are achieving excellent business results. While also acknowledging positive examples of concessions in the region, such as Tirana Airport, it is important to note that their success is largely linked to a significant number of national diaspora," the letter states.
It is emphasized that according to United Nations data, about 30 percent of Albania's population lives abroad, which represents an extremely significant factor in the traffic and operations of Tirana Airport.
"In addition, the current situation of ACG is also significantly contributing to the operations of Tirana Airport. Analyses show that most airports in Western Europe and the European Union are still state-owned. For example, all airports in the Czech Republic, Slovakia, Lithuania, Latvia, Estonia, Finland, Monaco and Luxembourg are state-owned or publicly owned. The situation is similar in Greece, where 98 percent of airports are publicly owned, in Poland 88%, in Sweden 86%, in Austria 83%, and in Croatia 75%. In Germany, the Netherlands and Denmark there is not a single completely private airport," the unionists state.
It also says that after more than a year of intensive negotiations, on June 6, 2024, the Hungarian government reacquired a majority ownership stake in the Liszt Ferenc International Airport in Budapest, the letter states.
“Minister of National Economy Marton Nagy announced: 'We have regained control of the airport, and after almost twenty years, it is back in Hungarian hands…Ownership of the airport is a matter of sovereignty, which is of strategic importance not only for passenger traffic and tourism, but also for cargo transport, and is a key artery of economic circulation…On the other hand, the current government was able to correct this unforgivable mistake and repurchase the airport, even in the current war situation,'” the letter reads.
Arguments for and against
The letter states that the strong arguments against the concession are - the state can ensure the development of the airport itself, a possible drastic increase in passenger service fees, loss of control over Montenegro's air accessibility, the risk of transferring the state monopoly into private hands, excess profits leaving Montenegro, and poor previous experiences and citizens' distrust in privatization, or concession, procedures.
"When it comes to arguments in favor of the concession model, the most frequently cited are - Flexibility and efficiency of the private operator, better human resource management, greater readiness for innovation, and secured income from concession fees.
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