The Luštica Development Group from Tivat, which is implementing a project worth more than 1,5 billion euros to build a new tourist town, Luštica Bay, on seven million square meters of leased state land on the Luštica peninsula, has generated total revenues of 293.267.779 euros.
This is how much revenue has been generated since the beginning of the project's implementation in 2009, ending on June 30, 2024, and the state got the crumbs - just over five million euros.
This is stated in the "Report on determining the amount of gross receipts in relation to the entire operations of Luštica Development AD Tivat and defining the total obligation to pay to the Government of Montenegro in accordance with the Lease and Construction Agreement of 23 October 10". The report was prepared for the needs of the Ministry of Spatial Planning, Urbanism and State Property by the auditing and consulting firm "MV Konsalt" from Podgorica.
Of the total revenue generated, in accordance with the 2009 Agreement, the amount of EUR 265.448.616 refers to revenue that is the basis for calculating and paying a two percent fee to the Government. On this basis, the company “Luštica Development” had a total liability to the Government of EUR 5.308.973 by the middle of last year, of which on June 30, 2024, it was supposed to pay the then outstanding liability in the amount of EUR 361.908.
According to the Agreement, “Luštica Development” is also obliged to pay three percent of the “total revenues from water and sewage re-invoicing services” to the Municipality of Tivat. On this basis, the company generated revenues of 2009 euros from the beginning of the project in 1.791.381 until the middle of last year, of which it paid a total of 30 euros to the Municipality of Tivat by 024 June 49.945, and on that date owed it another 3.796 euros.
The "MV Konstalt" report also states that "Luštica Development" ended the business year 2023 with total revenues of 50,18 million euros, and achieved a net profit of 3.740.113 euros.
The company generates most of its revenue from the sale of real estate (apartments, apartments and villas) that it is building at several locations within the Luštica Bay complex. In the first half of last year, the company generated 13,75 million euros in revenue from real estate sales, while it generated another 1.242.209 euros by selling officially leased state land located beneath these facilities to clients who buy villas and apartments. Namely, according to the 2009 Agreement, it is allowed to sell officially leased land to clients, with the obligation to pay 80 euros per square meter to the state budget, regardless of the price at which the land is sold.
Additionally, the company has the advantage that to the owner to whom it sells an exclusive villa, in addition to the land on which it is built, it can also sell all the remaining land on the urban plot of that villa, for which it is obliged to pay the state a symbolic 4 euros per square meter.
For the disposal of any land intended for the construction of business facilities, "Luštrica Development" is obliged to pay the state a fee of 15 euros per square meter.
DPS-SDP government gave the land away below cost
All these prices are far below the real value of the land, and in 2009 they were negotiated with the company "Orascom" by the then Prime Minister. Milo Djukanovic (DPS) and Minister of Tourism Predrag Nenezic (DPS).
After his ministerial mandate ended, Nenezić immediately moved to work for the company "Luštica Development", together with his former assistant. Nebojša Popović (DPS). Nenezić has been a member of the Board of Directors of the company “Luštica Development” for years and is at the head of another controversial project of the company “Orascom” in Montenegro - the lease and conversion of the Austro-Hungarian fortress Malmula at the entrance to Boka into an exclusive hotel. Popović is a long-time head of the legal department of the company “Luštica Development” and the owner of one of the restaurants operating within the Luštica Bay complex.
The controversial contract with the company "Orascom" was approved in 2009 by the Parliament of Montenegro, in which the DPS-SDP coalition had a majority, and which was headed by the leader of the SDP. Ranko Krivokapic.
According to the 2009 contract, the company “Luštica Development” leased 6.560.880 square meters of officially state-owned land (although at that time there was also a large share of plots that were privately owned by local residents) for 90 years. In the first 10 years of the contract, the company was obliged to pay the government an “annual rent” of one million euros, as well as an additional amount of one million euros per year in company shares, as an “additional annual rent”. In addition, “Luštica Development” is also required to pay a so-called operating rent of two percent of all income it generates during the year.
After the first ten years of the lease, which expired at the end of 2019, “Luštica Development” is required to pay the state a rent for the leased land in the amount of 0,15 euros per square meter, the same as for a meter of leased aquatorium in Trašte Bay, or 0,3 euros per square meter of aquatorium in the two planned marinas. This means that the fixed annual rent for the land is now even lower than in the first ten years of the Agreement, as it currently amounts to 984.132 euros.
Company capital 73,5 million euros
“Luštica Development” AD is a subsidiary of the Egyptian-Swiss company “Orascom Development Holding”, headed by businessman The Sawiris themselvesThe ownership structure of the company "Lušttica Development" as of June 30 last year consisted of "Orascom Development Holding" with 87,71 percent of shares, the Government of Montenegro with 12,23 percent and "Onsa Holding Limited" from Great Britain with 0,0133 percent of shares.
The list of shareholders also includes seven individuals, Slavoljub Dragojevic, Danijela Čolaković, Ivan Popovic, Tamara Colaković, Slavko Otašević, Sonja Čolaković i Dragana Bećirović, who individually own 0,0027 percent.
On June 30th last year, the total capital of the company "Luštica Development" amounted to 73.559.781 euros and was divided into the same number of shares with a nominal value of one euro each.
The "Luštica Development" Group consists of 18 affiliated daughter companies founded and solely owned by the parent company "Luštica Development" AD, all of which deal with some of the specific aspects of the development and daily functioning of the luxury tourist resort on the coast of Trašte Bay in Tivat: construction, sales, marketing, real estate development, management, daily operations, provision of water supply, electricity supply and public transport services, running the marina...
The company is also allowed to sell leased land to real estate buyers, with the obligation to pay 80 euros per square meter into the state budget, regardless of the price at which the land is sold. Unofficially, a square meter is worth many times more...
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