The Public-Private Partnership (PPP) agreement between the Royal Capital and the "Talija Company" for the construction of the "Lokanda" hotel in Cetinje has not yet been concluded because it requires additional coordination with the Ministry of Finance and the Tax Administration. Although the deal worth 13.783.531 euros was officially signed in March last year, the hotel's renovation is being held up by the PPP Law - which partially conflicts with other laws.
If these problems are not resolved, the Royal Capital will prepare the project documentation itself and begin construction of the "Lokanda" by the end of 2026.
This was officially told to "Vijesti" by the Royal Capital, headed by Nikola ĐuraškovićThis Municipality did not respond to additional questions from the editorial team, namely, which laws the PPP contract conflicts with.
On the website of the Royal Capital on March 28 last year, it was announced that they had signed a PPP contract with the "Talija company" from Herceg Novi for the construction of the "Lokanda" hotel, a parking garage and the ground-level landscaping of the Artists' Square. The project documentation is planned to be completed within six months, or by the end of September last year, and then the reconstructed "Lokanda" will be built within two years.
"Vijesti" was told by the Royal Capital at the beginning of December last year that they expect the development of project documentation to begin soon, and work on the hotel itself to begin in the spring of 2026. However, this has not happened to date.
"The problem lies in the fact that the Law on PPP in certain segments does not fully correspond to other applicable laws in Montenegro. Due to the lack of practice in Montenegro regarding the implementation of the PPP model, it is necessary to further harmonize legal and technical solutions with the competent state institutions, primarily the Ministry of Finance and the Tax Administration. In the previous period, we have worked intensively on overcoming these obstacles, in cooperation with the competent authorities at the state level. We are not giving up on this project and we expect that we will soon find a solution that would enable the start of implementation. If we do not find a solution and do not remove the administrative barriers that we currently have, the Royal Capital will implement the aforementioned project itself, from its own funds. This means that construction, after the preparation of project documentation, will begin by the end of the year," the Royal Capital said.
“Vijesti” also asked the Royal Capital whether they had collected a bank guarantee of 250.000 euros from the private company, given that “Talija” could have lost it if the deal was not made official by early December. The Royal Capital did not answer that question.
They pointed out that the PPP contract has not yet been concluded and that this is the first PPP project in Montenegro, which is being carried out under the 2019 PPP Law. They explained that this Law is aligned with European Union standards without established practice in Montenegro, so administrative barriers have arisen that must now be removed in order for work on the project to begin.
In mid-January, the Royal Capital also announced a €24.200 tender for the development of a conceptual design with a conservation analysis for the reconstruction of the “Lokanda”, the underground garage and the parquetry of Trg umjetnika. This tender was cancelled on February 9 due to necessary changes to the project documentation.
The “Lokanda” hotel was built in 1864 and was the center of the cultural and historical heritage of Montenegro, after which it suffered damage in the 1979 earthquake and was demolished. Today, there is nothing left of the “Lokanda” in Cetinje except an excavated plot, and a new hotel is planned to be built on the site of the old one in the very center of the city, at the end of Njegoševa Street next to Trg umjetnika.
Through this project, the royal capital, in addition to its cultural and historical significance, also wants to improve the city's tourist and accommodation capacity and create conditions for the creation of new jobs. The project includes a 48-bed hotel and an underground parking lot with 130 spaces.
“Lokanda” also has the status of immovable cultural property based on a decision from 1960, it belonged to the cultural and historical entity “Historical Core of Cetinje” which has the same status, so work on the buildings in this entity is subject to the provisions of the Law on the Protection of Cultural Property. The Directorate for the Protection of Cultural Property has already issued conservation conditions, which are the basis for the preparation of project documentation for the renovation.
Situation unchanged
“Talija Company” and Prijestonica are working together to address the challenges that arose during the construction of the “Lokanda” hotel, but the status of this project remains unchanged.
This was told to "Vijesti" by the founder and director of the company "Talija". Nikola Milić.
This company won the job of building the "Lokanda" at the beginning of last year, in a tender that lasted from October 30 to December 16, 2024. They were also the only bidder in this tender.
"Nothing has changed. All parties in the project remain committed to finding solutions to the administrative and legal challenges that have arisen, and we are working on this, together with Prijestonica, on a daily basis. As a company, we continue to approach the Lokanda project with the same enthusiasm, vision and desire to breathe new life into it with our experience and dedication," Milić emphasized, adding that after signing the PPP contract with Prijestonica, he will share all plans for this project.
The Royal Capital will finance “Lokanda” with 9,64 million euros, while the rest will be paid by “Talija”, which will then manage the hotel for the next 30 years in order to recoup the invested money. Until then, it will pay fees to the Royal Capital, which will receive full ownership of the hotel after the 30 years.
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