The construction of a section of the highway in the way the government planned to do it, by borrowing citizens well over a billion euros, is far-reachingly harmful to Montenegro and its citizens on several grounds," said Forum 2010 coordinator Žarko Rakčević.
He was a guest on Television Vijesti, in the Načisto show, and said that the level of lack of transparency and lack of public awareness in the entire procedure related to the start of highway construction is unacceptable.
"The highway law was adopted in May and only on November 5, after 160 days, it was made available to the public," explained Rakčević.
For the experienced businessman and former Deputy Prime Minister, a big problem is the over-indebtedness of the state, which will owe as much as its total national income by borrowing for the highway.
He explained that the manipulation is that the highway section will cost the citizens 809 million and said that the 41-kilometer section will cost one billion and 150 million euros. "One kilometer of highway cost Croatia 7,5 million euros, and it will cost us 28,5 million," said Rakčević.
Manipulation that the highway section will cost citizens 809 million and said that the 41-kilometer section will cost one billion and 150 million euros. "One kilometer of highway cost Croatia 7,5 million euros, and it will cost us 28,5 million
He added to that the public debt, which, as he said according to official data, now amounts to about 2,2 billion and arrived at the calculation that, if the Parliament gives the green light for the construction of the highway, Montenegro will owe about 3,4 billion, or almost as much as its GDP.
When asked what the government, which is made up of his former party SDP, is pushing into a business that will bring the state into a position of debt slavery and near bankruptcy, Rakčević answered that this is the same thing that pushed them when they made decisions about giving millions of grants to KAP and the like.
"Next year, according to the government's official projections, the budget will lack about 660 million. In addition, about 300 million debts will be collected. In other words, the state raises loans and borrows in order to repay old debts, and enters into such a far-reaching harmful project"
Rakčević pointed out that citizens should know the truth about the state's indebtedness.
"Next year, according to the government's official projections, the budget will lack about 660 million. In addition, about 300 million debts will be collected. In other words, the state raises loans and borrows money to pay back old debts, and it enters into such a far-reaching harmful project," he explained.
Rakčević says that the highway is not a priority for the already over-indebted state.
"High indebtedness, both experts and practitioners claim, leads to a fall in GDP. Our priority is new hotels and new jobs both in the north and in the south, not a piece of highway that will benefit only a few companies that will be subcontractors," he says.
For him, it is unacceptable that a few years ago, when in 2008, the Government concluded a deal with the Croatian Konstruktor, it claimed that private-public partnership is the only acceptable model of financing the construction of the highway and that indebtedness is disastrous for public finances. And now it's doing the exact opposite.
"During the six-year grace period, we will only repay the interest, and from 2020, that part of the highway will cost the citizens 83 million euros per year"
At that time, according to official government information, public debt was only 27,5 percent of GDP. At the time, they said that private-public partnership was the only acceptable model and that borrowing was disastrous for the state. Today we are twice as much in debt, we borrow to pay back old debts and we need to borrow for the construction of a section of the highway. At that time, according to official information, this share was supposed to cost 640 million, and today it costs over XNUMX billion, and in the meantime, the prices of construction materials fell by a third, explained Rakčević.
Rakčević pointed out that in such an economic situation, new borrowing is justified only if the money is invested in new value and that in the north we should invest in production facilities, new hotels. According to him, a good hotel, which would employ around 70 workers, can be built for 10 million euros, while the Government's plan is to pay 28,5 million for one kilometer of highway "from nowhere to nothing".
He explained that it is a manipulation that someone is against the highway and repeated that it is not a priority, especially not if it is built by an already over-indebted state.
"During the six-year grace period, we will pay only interest, and from 2020, that part of the highway will cost the citizens 83 million euros per year," says Rakčević.
Rakčević pointed out that in such an economic situation, new borrowing is justified only if the money is invested in new value and that in the north we should invest in production facilities, new hotels. According to him, a good hotel, which would employ around 70 workers, can be built for 10 million euros, while the Government's plan is to pay 28,5 million for one kilometer of highway "from nowhere to nothing".
"Multiply 6.400 by 365 days times 3,2 euros, we arrive at a not quite 7,5 million euros in revenue, which is far from some 17 or 18 million (that's how much they say in the Ministrtv that they will earn from tolls in the first years of exploitation). If maintenance costs are estimated at 100.000 euros per km of road, that's 4,1 million euros for maintenance. So you have a difference between 7,5 million in revenue and 4,1 million euros for the maintenance of that road, which is about 3,4 million."
"This has a political background. Assuming that 30 percent of the work is performed by companies from Montenegro, I don't see that it will have useful, such crucial benefits, except for a few companies... This way of implementing a section of the highway is extremely bad and harmful for Montenegro and its citizens. Unfortunately, Montenegro is heavily indebted. There is a great danger that we will enter debt slavery, the share of public debt of close to 100 percent is extremely problematic. Montenegro needs a different model of growth and development," Rakčević pointed out.
Regarding the traffic frequency projection of 6.400 vehicles per day, Rakčević said that if we assume that 8 cents per kilometer is the usual toll, which is 41 euros for 3,2 kilometers:
"Multiply 6.400 by 365 days times 3,2 euros, we arrive at a not quite 7,5 million euros in revenue, which is far from some 17 or 18 million (that's how much they say in the Ministrtv that they will earn from tolls in the first years of exploitation). If maintenance costs are estimated at 100.000 euros per km of road, that's 4,1 million euros for maintenance. So, you have a difference between 7,5 million euros in revenue and 4,1 million euros for the maintenance of that road, which is about 3,4 million," said Rakčević
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