The Law on Public-Private Partnerships (PPP) has been in effect in Montenegro since July 2020, but only one project has been initiated under this model. The project involves the construction, reconstruction, and management of the “Lokanda” hotel in Cetinje, for which the municipality issued a tender for selecting a private partner. The hotel, which will include a parking garage and the renovation of the Artist’s Square, aims to enhance the cultural heritage of Cetinje, the first hotel ever built in Montenegro. The project is expected to improve tourism, create jobs, and provide 130 new parking spaces. The construction phase is expected to take 24 months after the completion of the planning phase, which is set for 6 months.
Mirza Mulešković, an economist, believes that the PPP law has not delivered the expected results, highlighting issues with administration, procedures, and insufficient trust from investors. Despite some interest, the law has faced criticism for complicated procedures, limited calls for projects, and concerns about transparency and corruption. Additionally, digital services in the country are underdeveloped, and the frequent breach of contracts by institutions further diminishes the attractiveness of this model.
The Ministry of Finance (MF) maintains that the PPP framework aligns with EU regulations, and despite the slow start, efforts are being made to improve the system through education and preparation of new projects. Local governments are seen as having significant potential in utilizing this model for capital projects.
The MF is also working on new laws to attract strategic investments, including a draft law on strategic investments in Montenegro, aiming to create a more favorable business environment. They also plan to support local governments and ministries in preparing project documentation for capital investments.
PPP opportunities in Montenegro are considered viable in sectors such as waste management, energy, and the development of sports and tourism infrastructure. However, the country has chosen to focus on direct financing for large infrastructure projects, using EU funds and favorable loans.
Mulešković also sees potential in natural resource-based PPPs, such as the idea of bottling water, which could offer opportunities for implementation in the economy.
