The investment strategy for Montenegro’s airports has entered a contentious phase, particularly regarding the funding and control of the expansion projects at Podgorica and Tivat airports. This follows a challenge from Corporación América Airports (CAAP), the last remaining qualified bidder, against indications from the Montenegrin government that it may consider alternatives to the ongoing concession process.
CAAP expressed significant concern over potential shifts away from a private-concession model, which would have allowed the operator to finance airport expansions. The company warned that such a change could result in the state or Aerodromi Crne Gore being responsible for securing necessary capital.
In its bid submitted on July 29, CAAP proposed an upfront concession payment of €101 million along with annual payments amounting to 35.21% of gross airport revenue during the concession period. This proposal highlights the financial stakes involved as Montenegro contemplates two distinct investment models at a time when both airports require considerable capacity enhancements.
Under the concession model, a private entity would undertake much of the investment in exchange for long-term operating rights and would pay fees to the state. Conversely, if the airports remain state-funded, Montenegro would retain future earnings and control but would need to finance expansion through retained profits or other funding mechanisms.
CAAP has estimated that investments needed for airport upgrades could range between €250 million and €300 million. However, this figure has not been officially adopted by the government as its financing estimate.
On September 2, the government announced that an interministerial group led by Prime Minister Milojko Spajić would expedite development plans for Podgorica and Tivat airports, focusing on terminal expansions and additional infrastructure in time for the 2027 summer season. A comprehensive master plan is also anticipated following years of increased passenger traffic that have strained existing facilities.
The government previously considered canceling the concession procedure in July after Incheon International Airport Corporation from South Korea withdrew from the tender process. CAAP contends that halting the procedure now would undermine investor confidence, particularly concerning foreign infrastructure investments in Montenegro.
This situation presents not only a financing dilemma but also raises questions about procurement predictability as Montenegro approaches European Union membership. CAAP has linked these procurement issues to Montenegro’s EU aspirations, emphasizing that predictable processes and equitable treatment of investors are crucial components of this trajectory.
With passenger traffic reaching record highs, airport capacity constraints are becoming increasingly evident during peak tourism seasons. Thus, substantial investment is necessary regardless of which ownership structure is ultimately chosen.
Proponents of maintaining state control argue that increasing passenger numbers could enable Aerodromi Crne Gore to finance more development independently while safeguarding future profits for Montenegro. On the other hand, a concession would transfer more construction and financing risks to private investors but would also mean relinquishing a portion of future cash flows from airport operations.
The decision facing Montenegro transcends beyond the initial €101 million concession payment; it involves assessing the value of retaining long-term airport revenues against the costs and risks associated with financing expansions estimated at €250 million to €300 million. After seven years of deliberation, it is clear that Podgorica and Tivat need enhanced capacity; however, the critical question remains regarding who will bear the financial burden and how much control Montenegro is willing to relinquish in return for external funding.
