The Public Company for Maritime Zone Management of Montenegro (JPMD) has announced a tender for the revision of the economic and financial analysis with a proposal for a concession agreement and the preparation of a concession act for the Port of Risan on the possibility of leasing it for 30 years.
The estimated value of this public procurement is 20.000 euros including VAT, and bids for the tender are being accepted until January 15th, when they will be opened.
Economic and financial analysis with a proposal for a concession contract for the Port of Risan signed by Prof. Dr. Nikola Milović and prof. Ph.D Mijat Jocović It was created in 2020.
"Given that five years have passed since its preparation, it is necessary to conduct a review of the existing document. The review includes the following activities: description of the subject of the concession, boundaries of the area, region, space and location where the concession activity will be carried out, analysis of the justification for achieving the public interest by granting the concession, with indicators that the concession ensures the public interest; concession duration; analysis of alternative investment and service provision options (investment by the state/JPMD and the possibility for the state/JPMD to manage the port or part/utility berths of the port)," the tender documentation states.
Concession act for 30 years
In addition, the audit should also include the following activities - conditions that the bidder must meet, which relate to: registration in Montenegro, professional qualifications, financial capacity, technical equipment, insurance and other references and evidence; a proposal for a concession agreement, an estimate of the investment amount and its relationship to the total value of the port, as well as the condition of the facilities and equipment after the concession expires.
It is noted that the innovated study should also contain "indicators that the planned concession provides adequate value for the invested financial resources/parameters for assessing the economic justification of the investment; assessment of the financial and technical feasibility of port services or economic activities; assessment of the time required for return on investment and realization of appropriate profit based on the concession activity; parameters for determining the concession fee, the method of changing the amount of the concession fee and the method of controlling the realized costs of maintenance and construction of port infrastructure and superstructure facilities", as well as defining the initial amount of the concession fee; obligation to insure the facility; assessment of the financial and technical feasibility of port services or economic activities and "analysis, assessment and balancing of risks between the grantor and the concessionaire."
The selected bidder will also be obliged to draft a new concession act for the lease of the port of Risan for a period of 30 years, according to the BOT (build, operate, transfer) principle.
Five years ago, when they first embarked on this activity, the Coastal Zone announced that the goal of drafting the concession act for the Port of Risan was "to create conditions for the development of port activities and the construction of modern maritime infrastructure in accordance with the current State Location Study for Sector 10, which recognized the Port of Risan as a city port and a port of nautical tourism."
Until a few years before that, the Port of Risan was operated as a concessionaire by the company "Bastion Commerc" from Kotor, which used it for cargo transhipment. This was mostly the transport of cement and other goods that it brought here on its own merchant ships.
Investment of 8,1 million
In the Economic and Financial Analysis conducted in 2020, the authors proposed that, in accordance with the state's strategic commitment to develop nautical tourism and the Special Purpose Spatial Plan for the coastal area, a nautical tourism port - a marina, with a capacity of up to 150 berths, be built in Risan.
The subject of the concession would be the cadastral plot 578 KO Risan I, with an area of 2.907 square meters, consisting of the current operational shore and waterfront, built during the Austro-Hungarian and Kingdom of Yugoslavia periods, and the associated water area with a total area of 21.597 square meters. The estimated value of the investment that the concessionaire should realize in accordance with the Study on the Construction Condition of the Port of Risan and other parameters necessary to convert it into a marina with a capacity of 150 berths, was 8,1 million euros. The authors proposed that the fixed amount of the concession fee be a total of 33.050 euros per year, and that the variable concession fee be at least two percent of the EBIT (operating, i.e. profit before interest and taxes), which will be realized by the future leaseholder of the port.
It was planned to keep part of the water area for utility moorings.
In the Economic and Financial Analysis conducted in 2020, it was envisaged that, of the total area of the concessioned water area, 4.495 square meters in the current mandrač bordered by the Risan waterfront on one side and the operational shore of the current port on the other, would be reserved for utility berths, and 17.102 square meters of sea in front of the current pier would be designated for commercial yacht berths.
All this was done despite the fact that the Risan Bay area, especially the waters immediately in front of that small town, is the largest and most important hydroarchaeological site in Montenegro with the underwater remains of a former Illyrian, or later ancient Roman, port and coastal settlement.
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