Vuksanović: Concession for Montenegrin Airports is a continuation of the old policy with worse excuses

Advisor to the President of Montenegro for Internal Policy and Economic Development, Nebojša Vuksanović, said that those who once criticized the concession procedure for Airports of Montenegro are now completing it under the conditions defined by the former government, without any substantive review.

Vuksanović, the Public Relations Office of the President of Montenegro announced, said that the Government's decision to continue and practically finalize the concession procedure for the Airports of Montenegro, with the accompanying propaganda campaign about "billions of euros for the state", requires a serious, well-argued and responsible reaction. He points out that behind the bombastic announcements "there are numerous open questions to which the public still does not have answers".

"First and foremost: what is the economic logic that the initial concession fee of 100 million euros is treated as relevant and adequate today, even though it was defined seven years ago? Is there a single product or service in Montenegro today that has the same price as in 2019? In the meantime, we have witnessed a strong increase in prices, but also a significant increase in the operating income of the Airport of Montenegro, with an almost doubled operating profit compared to 2019. At the same time, the estimated value of the company's assets has almost doubled. How is it possible that in such circumstances, one insists on financial parameters from a completely different economic moment," asked Vuksanović.

He also pointed out that, secondly, the Government "persistently ignores the fact that Airports of Montenegro, as a profitable state-owned company, has the real capacity to invest independently."

"With moderate annual profit growth of 5–6%, estimates show that in the next 30 years the company could accumulate between 850 million and a billion euros in profit. European investment funds and financial institutions are open to companies that are doing positively, which further refutes the thesis that investments are possible exclusively through concessions and foreign operators," said Vuksanović.

He added that the claim that without concessionaires there is no development is "simply not true."

"Third: why is the concession granted for as long as 30 years? There is no comparable example in the region, or even wider, of such a valuable infrastructure resource being granted for such a long period of time without additional protective mechanisms and revisions of conditions. This practically locks in the country's development potential for an entire generation. Fourth: The government must clearly answer the question of jobs. When a concession fee of 35% of revenue is announced, elementary economic logic dictates that the concessionaire, in order to make a profit, will have to significantly reduce operating costs. In practice, this also means rationalizing the number of employees."

Vuksanović also asked whether and how many workers would lose their jobs and how this issue would be resolved.

"Fifth: why is there silence about potential lawsuits and arbitrations? Two companies that participated in the process have already announced legal steps. What is the estimated financial and reputational damage to the state? Of particular concern is the fact that certain members of the government and the concession commission have publicly spoken about the compromised nature of the process itself, distancing themselves from the process itself. Why, then, despite everything, is there an insistence on ending the process that has been burdened with serious doubts since the time it was initiated," asked Vuksanović.

He also said that they are not against investments, nor against foreign capital and knowledge.

"The problem is not in the concession itself, but in the fact that it is implemented according to financial and market parameters that are no longer realistic. Serious analyses indicate that if the concession procedure were implemented under current conditions, the concession fee could be twice as high. The new valuation additionally imposes an obligation for the Parliament of Montenegro, as the highest representative house of citizens, to express its opinion on this issue. In the given circumstances, there is no ideal solution, but there is a responsible solution: suspending the existing procedure and launching a new one, based on current economic parameters, transparent rules and clear criteria. Before that, a comprehensive analysis of all management models is necessary, including professionalized state management."

Vuksanović called on the members of the Parliament of Montenegro to, when this issue is before them, decide exclusively in the interest of the state and citizens.

"If we want accountable government, decisions about airports must be transparent, fair and based on the public interest. Everything else is a continuation of the old policy, just with worse excuses," he said.