ACG Trade Unions: Parliament to Reject Airport Concession

The Parliament should not adopt the Proposal for a Decision on granting a concession for Montenegrin airports, according to which it would be awarded to the first-ranked bidder, Incheon Airport Corporation (IAC), for a period of 30 years, according to the representative trade union organizations of the two airports.

Representatives of these labor associations have stated that they are against this model of giving the airport into concession and under these conditions.

"We believe that the Parliament should not adopt the aforementioned proposal, but rather that it should be annulled, and that with renewed joint engagement of both the Government and all other relevant entities and social partners, the best solution, i.e. the management model of the Airports of Montenegro, should be found, primarily in the interest of the state of Montenegro and its citizens," the statement states.

They told the MPs that they were faced with a decision that would determine the long-term fate of one of the most important state resources - the airport of Montenegro.

"In this context, we consider it our obligation to point out a number of specific questions to which the public, employees and the profession have still not received answers, and which answers should be provided to us by both the Government representatives and those parliamentary groups that have decided to support the aforementioned Government proposal for granting consent to sign the concession agreement," the statement reads.

Trade union organizations asked how it was possible for a decision of strategic importance to be based on a tender defined back in 2018, before global economic disruptions, the pandemic, and drastic changes in the aviation industry.

"Is it rational and responsible to cede airports that represent the key transport and economic gateway of the country for 100 million euros and approximately 30 percent of revenue?" asked the trade union organizations.

As they said, if airports are already achieving continuous growth in revenue and traffic, based on which analysis it is concluded that it is more profitable to leave management to a third party than to keep the profit in the state budget.

"Why wouldn't the state invest in its own capacities and enable further development by strengthening the existing management, considering that this is an activity with a quick return on investment? Who takes responsibility for potentially giving up much higher long-term revenues in favor of a one-time fee," the unions asked.

They were also interested in what the specific and legally binding guarantees for employees were – whether their jobs, salaries, and rights would remain protected or would be left to the concessionaire's business policy.

"Has an independent assessment been made of the actual value of the airport in the current conditions and how does it compare to the amount offered? Did the public have full insight into all elements of the offer and was the process conducted with maximum transparency? Finally - does this decision represent a long-term development move or a short-term budgetary measure with lasting consequences," the unions asked.

These, they claim, are not political, but rather essential issues of responsibility towards the state, its citizens, and its employees.

"We urge you, before making a final statement, to demand additional analysis and full transparency of the process, bearing in mind that the Parliament is the last line of defense of the public interest," the statement said.

The trade union organizations of the Podgorica and Tivat airports believe that it is unacceptable and extremely frivolous for the most important issues for the company Airports of Montenegro, employees and trade union organizations, as their representatives, to be informed through the media.

"Absolutely not disputing the right of the Government as the founder to consider the best models for the future status and development of the Airport, we believe that any decision in this direction must be preceded by a detailed analysis and clear argumentation with which both the professional and lay public will be informed and on which they will provide their comments and suggestions," the statement added.

Montenegrin airports, as they claim, truly deserve significant investments and investments in infrastructure in order to increase capacity and improve service and user comfort.

"However, the way in which such a thing will be implemented must reflect serious analyses regarding the question of whether the company Aerodromi Crne Gore can implement it independently, so that this economic resource remains in the hands of the state and so that the state retains the right to manage it," the statement added.

They emphasized that last year was a record year for Airports of Montenegro – both in terms of passenger traffic and profit.

"After serving over three million passengers for the first time since our establishment - in the same infrastructure conditions and in the same terminals where we had just over 850 thousand passengers in 2006, we have also achieved significant financial results. If we take into account the net profit in the previous three years, there is no doubt that the Airports of Montenegro have increased their net profit by 20-25 percent every year," the unions stated.

Revenues last year amounted to 56 million euros.

"After the Airports of Montenegro granted airlines 13 million euros in discounts on airport services under the Incentive Scheme, net income for last year was 43 million euros. Net profit was 13 million euros, which is a record amount for the company," the statement specifies.

They emphasized that the proposed investment figure of 100 million euros, which has since been devalued, seems somewhat ridiculous as an obligation of the future concessionaire, because the company itself is undeniably capable of applying for loan funds and regularly repaying obligations from such an arrangement through the generated profit.

"We ask our politicians - would you sell your 30 square meter apartment, which you valued at 40 thousand euros in 2018, for the same amount today? Or would you ask for at least three times more," the union said.

Additionally, as they said, it is shocking that the concessionaires are expected to make "planned" rather than mandatory investments of EUR 300 million over 30 years for two international airports, while the airport in Malta is investing EUR 345 million in the period from last year to 2029 alone.

This, they claim, is the most vivid proof of how disastrous this concession act is for all of Montenegro.

"We should not forget the fact that the new assessment conducted by the Property Administration estimated the value of the Airport of Montenegro at 264 million euros, which is another clear argument why such a valuable state resource should remain in state ownership, considering that compared to the previous property assessment conducted in 2021, the value of the property of the Airport of Montenegro has increased by over 140 million euros," the unions said.

A special focus is placed on the work of the tender commission so far in the concession awarding process for Airports of Montenegro, whose work, as they claim, represents an example of a chronic lack of transparency that has irreversibly compromised the legitimacy of the entire process.

"Our serious concerns are confirmed by the fact that key decisions within the Commission were made in direct disregard of the recommendations of renowned international consultants such as the IFC (World Bank), thus suppressing expert opinions in favor of vague political criteria that were never publicly explained," the unions said.