CAAP wrote to the Parliament, they believe the tender is illegal

The Luxembourg-American company Corporacion America Airports (CAAP) has addressed the Parliament of Montenegro with a letter warning about, in their opinion, the illegality of the tender procedure and the substantial changes to the concession agreement for Airports of Montenegro.

This company was ranked second in the tender for the long-term lease of airports in Podgorica and Tivat, while the offer from the South Korean company "Incheon International Airport Corporation" (IIAC) was in first place.

The final decision on the airport concession is made by the Parliament.

We are publishing the letter signed on behalf of the company by Belgrade lawyers Goran Martinović and Aleksandar Jovićević in its entirety:

"Addressed to:

President of the Parliament of Montenegro – Andrija Mandić

Chairman of the Committee on Economy, Finance and Budget – Boris Mugoša

To the Chairman of the Legislative Committee – Dragan Bojović

SUBJECT:

Warning about the illegality of the tender procedure and substantial amendments to the Concession Agreement for Airports of Montenegro - Submission of the decision of the Higher Court of the Parliament of Montenegro on the Proposal for granting a concession for the Podgorica and Tivat airports, which was published on the website of the Government of Montenegro on 17.04.2026.

Dear customer,

On behalf of and for the account of our client, Corporación América Airports SA (CAAP), and based on the enclosed power of attorney, we are writing to you regarding the Proposal for granting concessions for the Podgorica and Tivat airports (Proposal), which the Government of Montenegro has officially submitted to the Parliament for decision.

Introductory part and brief recapitulations of the previously mentioned procedural violations

We remind you that the Parliament of Montenegro in this specific case makes the final decision pursuant to Article 29, paragraph 3 of the Law on Concessions, having a decisive role in the matter of 150 million euros, and Article 5, paragraph 3 of the Law on Concessions. We understand that such a decision is based on the amount of millions of checks on the assessment of the Property Administration, which now amounts to, as we understand, over 264 million euros.

We do not know how it came about that this assessment is being carried out only now and not before the continuation of the tender process that followed a multi-year break. It was logical that before continuing the process, the competent authority would check the value of the assets being given under concession, and then, in accordance with the result and the applied legislation, proceed with the tender procedure rule and deliver the opening of bids to interested tender participants. It is certainly unusual that a new assessment is being carried out so suddenly, after seven years of the procedure, and that our client was never provided with the methodology of that assessment (although we requested it from the Ministry of Transport / Tender Commission), although previously the assessment only served in the case as a basis and parameter for determining concession fees and the time of extension of bids in the sense of the then 60th Law on Concessions.

Considering your authority to make the final decision in this matter in accordance with applicable laws and to assume ultimate responsibility for it, we believe it would be useful to point out to you, in our client's opinion, a gross violation of the tender procedure and the law by the executive authorities in the tender procedure in question.

First of all, as we believe the Assembly is aware of, without providing details, we would like to remind you that in the tender procedure in question, there was a completely illegal repetition of voting regarding the evaluation of part of the technical bids, which allowed the programmed tender bidder International Airport Corporation (IAC) to receive a sufficient number of points to enter the top two bidders. In the first evaluation, IAC received 79,07 points, and CAAP 87,84 points. However, instead of a technically concluded session of the Tender Commission after the voting of all members of the Tender Commission in accordance with the Code of Montenegro, the subject of voting and separate items of individual members of the Tender Commission on the minutes, the leakage of confidential information to the media, as well as complaints and selective interpretations by the advisors of the Government of Montenegro, IFC and their legal advisors (that the "point pool" was allegedly inadequate and the amounts regularly received against the scoring which were later publicly and officially confirmed by the Concessions Commission itself), there was a re-scoring. Repeated evaluation of technical bids, after which IAC received a magnificent 81,69 points, and CAAP 88,72 points. In this repeated scoring, very unusual situations occurred, where individual members of the Tender Commission, instead of the original points for certain elements of the IAC bid, now gave the maximum 5 points. Such repeated technical scoring and completely different results of all the above is completely inexplicable and does not result from pressure on the members of the Tender Commission.

In addition, the official scoring results in individual segments should not be mathematically possible. According to the tender rules and relevant regulations, each member of the commission independently assigns scores to the elements of the offer (with scores from 0 to 5), their scores are added up and divided by 13 (which is the number of members of the Tender Commission) in order to obtain an average score. However, in our case we have examples that when the average score is multiplied by 13 we get a number with decimals. This mathematically indicates that the voting was not conducted according to the rules.

All of the above is contrary not only to the basic principles of the Concessions Law from Article 3 thereof and the principle of equal treatment, but also to the case law of the European Union, which is supported by the legal opinion of EU experts from the internationally recognized law firms in the world, DLA Piper UK LLP.

The Parliament can see all the announced illegalities from two administrative disputes being conducted before the Administrative Court of Montenegro against the relevant decisions of the Concessions Commission (cases U no. 5921/25 and U no. 1516/2025).

The Parliament is now in a position to validate such illegal actions by adopting this Proposal before the Administrative Court essentially makes its decision on a series of illegalities that the courts should discuss. We note that two administrative disputes are ongoing against the decisions of the Concessions Commission. In one of the proceedings, the court acted extremely unusually. First, the legally prescribed deadlines for action were met, and then the court suddenly issued a judgment without a hearing and without submitting a response to the lawsuit to the plaintiff for a response. All current and derived findings by CAAP have been ignored. In these circumstances, the Administrative Court once again confirms that the procedural irregularities stated in CAAP's lawsuit, without engaging in detailed reasoning, resulted in the issuance of the disputed decision in the judgment itself. By acting in this way, the Administrative Court de facto denied CAAP the right to judicial protection. CAAP will certainly file a Request for Review of the Judgment with the Supreme Court of Montenegro, and if it remains without legal protection before the Supreme Court, it will consider the possibility of initiating proceedings before international courts and arbitrations. No action has yet been taken in the second dispute, although the legal deadlines for acting on the CAAP lawsuit have long expired.

Also, compared to the time when the tender procedure was launched by the Concession Act of 2019, there have been significant changes in the local and global market. The signing of the state contract with the airline Wizz Air (which opens its base in Podgorica at the end of March 2026) occurred after the submission of the bids, which represents a significantly changed circumstance that drastically changes the level of financial parameters. This fact, which renders the original financial models of the bidders meaningless, is persistently and illegally ignored by the Government in the entire decision-making process. Moreover, it is our understanding that the IAC business plan that is part of the bid does not foresee any growth in UDS from the reopening of airports in Montenegro.

Violations of the rules that occurred after complaints were filed

The competent authorities continued to ignore the tender rules and relevant laws, and after the Ministry of Transport proposed to the Government, and the Government to the Parliament, to declare the Bidder IAC as the winner of this tender, we point out these irregularities in the text below.

We emphasize that the draft Concession Agreement (the Agreement) was available to the bidders and the trusted data room (VDR) and that the entire tender procedure was based on the contractual principle of "take it or leave it" in relation to the proposed draft Agreement. Such 9.2. of the publicly available Invitation for Proposals (RFP) expressly and imperatively stipulates: "The original bidder shall not have the right to request any changes to the Concession Agreement after the submission of the bid."

The "take it or leave it" function of the draft contract has multiple significance in the concession award process. Among other things, it ensures transparency and equal treatment of all bidders.

The Law on State Property, the exclusive function of the protector is to protect the property and financial interests of Montenegro. However, the Government used this "harmonization" as a cover to insert provisions of a purely commercial nature into the contract, which are described in detail.

So, in short, the Government, apart from purely technical changes, completely changed the draft Concession Agreement (the RFP does not allow this nor does it imply any other protections, because the draft is the product of the contract when the Government of Montenegro and the competent authorities have already made and presented to the Parliament a proposal for a concession agreement without prior notice to any bidder. Such changes could not even be the subject of further court hearings if the Parliament accepts the Government's proposal.

Specifically, the following provisions have been changed:

New right of expropriation and expropriation obligations at the expense of the State (Article 49.1.) The originally valid Agreement that was in the VDR, the Concessionaire itself, through its company that it established for the purpose of managing the Airports, would be obliged to cover the costs of expropriation of land necessary for the expansion of the Airport, if these costs exceed an amount that is considered fair compensation and is defined by the IFC rules. The Government has assumed in the Agreement the obligation to reimburse the Assembly of the entity a new obligation by which the State exclusively assumes all costs and expansions of historical court cases, labor disputes and unresolved expropriation of land in Tivat, including the assumption to IAC of the airport financial risk that was originally foreseen for the concessionaire.

Increased Noise Annex 3 of the draft Contract adds a special clause according to which the costs of disputes due to increased noise will be borne by the State of Montenegro, not the Concessionaire.

Relaxation and deletion of previous conditions (Annex 1) IAC is now exempt from the obligation to obtain key use permits, the obligation to prepare and submit a study (ESIA) for the bridge terminal, as well as obtaining the Certificate for Tivat Airport before taking over the airport.

Waiver of Sovereign Immunity (Article 51.13) The Government hereby waives part of its sovereign immunity in relation to commercial disputes and arbitrations.

Reduction in insurance The required amount of third party liability insurance has been drastically reduced from 750 to 500 million euros.

Introduction of “Step-in” rights for banks (Article 41.2(a)) This allows banks and creditors to take over the management of the concessionaire in certain situations.

Limiting liability for corrupt acts of the Concessionaire The amendments significantly mitigate the liability of the Concessionaire for corrupt acts of its employees and subcontractors.

As the highest legislative and representative body, the Parliament of Montenegro should not validate a procedure that is full of such legal irregularities.

We invite you, within the framework of the competent parliamentary committees and at the plenum, to thoroughly examine all the illegalities of the tender procedure in question, the passage of time and changed circumstances, the aforementioned illegal amendments to the Concession Agreement, and conscientiously protect the public interest and legal order of the state of Montenegro.

We are at your disposal to provide a complete comparative analysis and additional evidence on the above facts. We ask the Assembly to indicate to us if it is necessary to provide any additional documentation, including in relation to the above-mentioned illegalities, intersections and administrative disputes."