Kolašin is set to commence a significant municipal infrastructure project in northern Montenegro, with the signing of a €11.75 million contract that includes VAT for the construction of a new wastewater treatment plant, sewer network, and enhancements to the town’s water supply system. Construction is slated to begin in early September, with a contractual implementation period of 36 months, projecting completion into 2029.
The contract has been awarded by the Municipality of Kolašin to an Italian consortium consisting of JV Spiga, Ibi Idrobioimpianti, and M.E.C. Meccanica Ecologica. The works contract is valued at approximately €9.7 million before VAT, totaling €11.754 million including VAT. Funding for the project combines €8.36 million in grants with an additional €4 million in credit financing, supported by the Western Balkans Investment Framework and the European Investment Bank.
The initial phase of this project will establish a wastewater treatment facility designed for 4,000 population equivalents, alongside around 9.2 km of sewerage network and critical upgrades to the water supply system. Future planning anticipates expanding treatment capacity to accommodate 6,000 population equivalents and extending the sewer network to approximately 23 km.
This investment, while modest compared to Montenegro’s larger infrastructure projects such as motorways and airports, highlights a crucial challenge within the country’s investment cycle: private development has often progressed more swiftly than the municipal infrastructure necessary to support it.
Kolašin has evolved rapidly from a small town into a key location for mountain development in Montenegro. The surge in hotel construction, apartment developments, ski facilities, and projects linked to the former economic-citizenship program has escalated the demand for essential services including water supply, sewage systems, roads, electricity, and winter infrastructure.
This sequence of investments has not always aligned effectively. Several hotel projects were nearing completion this summer while essential public infrastructure was still being procured. Additional tenders launched in July aimed at snowmaking infrastructure at Kolašin 1600 and wastewater facilities serving Kolašin 1450 and 1600 mountain centers, with an estimated combined value exceeding €8.5 million excluding VAT. Investors have expressed concerns that completed accommodations cannot operate fully without necessary utility connections.
The new wastewater contract addresses more than just environmental concerns; it aims to bridge the existing infrastructure gap between private development initiatives and municipal capabilities.
This alignment is critical for Kolašin’s tourism strategy. While constructing new hotels can be expedited when land and capital are available, establishing wastewater treatment facilities, water networks, and public roads involves extensive planning, environmental assessments, public procurement processes, financing agreements, oversight, and coordination among national and municipal authorities.
The projected 36-month implementation period indicates that immediate solutions for all pending developments will not be provided right away. However, it lays the groundwork for future growth in Kolašin.
A broader lesson for Montenegro emerges from this situation: tourism investment tends to be viewed through the lens of individual hotels or resorts; however, each new accommodation unit increases demand on vital services such as water supply, wastewater management, electricity distribution, road maintenance, parking facilities, and waste management systems.
This demand is particularly pronounced in mountainous regions where seasonal peaks can generate infrastructure needs far exceeding those of the permanent resident population.
For Kolašin, this wastewater initiative represents an economic development effort disguised as municipal infrastructure. Without adequate sewage and water systems in place, the value of surrounding hotel and real estate investments remains limited. Conversely, effective infrastructure enables existing projects to function reliably and facilitates future investments.
An environmental aspect is also present; mountain tourism monetizes natural landscapes and resources. Allowing unchecked hotel and residential construction without corresponding wastewater management would jeopardize the environmental assets that underpin the destination’s appeal.
Kolašin is thus entering a more complex phase of its development journey. The initial stage focused on attracting private investment and constructing accommodations; the subsequent phase will be less visible yet economically vital: building the necessary infrastructure to transform new constructions into fully operational year-round destinations.
The €11.8 million contract symbolizes Montenegro’s commitment to addressing the infrastructural demands arising from rapid tourism and property development while ensuring that public infrastructure keeps pace with these changes.
