Press release from the 121st - thematic Cabinet session

The Montenegrin Cabinet held its 121st - thematic session, chaired by the Prime Minister Milojko Spajić. The Cabinet adopted the Proposal for granting a concession for the airports of Podgorica and Tivat, including the Draft Decision on the award of the concession and the Draft Concession Agreement.

Upon completion of the legally prescribed procedure, the Government proposed that the concession for the airports of Podgorica and Tivat be awarded to the top-ranked bidder, Incheon Airport Consortium.

The concession constitutes a model of long-term management, while the State retains ownership of the land, infrastructure and all related assets, which remain public resources and shall revert to full State ownership upon expiry of the concession period. The concession is envisaged for a period of 30 years, with the State of Montenegro remaining the sole owner of the land and existing airport infrastructure within the current boundaries, without any change in the legal status of public property. Upon expiry of the concession period, all movable and immovable assets constructed or acquired during the term of the Agreement shall remain the property of the State of Montenegro.

It is estimated that the direct financial effects for the State from this arrangement will amount to at least EUR 1 billion over a 30-year period. The State will generate a combined financial effect through infrastructure investments, a variable concession fee and a one-off payment upon the conclusion of the Agreement:

• Total investment obligation in the amount of EUR 300 million, including reconstruction, development of new capacities and enhancement of key airport infrastructure at both airports;
• Revenue from the variable concession fee, based on semi-annual payments by the concessionaire amounting to 35% of annual gross revenue, estimated at EUR 600 million;
• A one-off concession fee in the amount of EUR 100 million, payable within one month of the signing of the Agreement.

Bearing in mind that the estimated value of the State assets subject to the concession procedure for the airports of Podgorica and Tivat amounts to EUR 264,364,759, as well as the provision of the Law on State Property stipulating that decisions on the disposal of State-owned assets exceeding EUR 150,000,000 are taken by the Parliament of Montenegro upon the Government’s proposal, the Draft Decision on the award of the concession and the Draft Concession Agreement, together with the accompanying documentation in accordance with the Law on Concessions, will be submitted to the Parliament of Montenegro for consideration and decision-making.