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Privatization and Investments

Privatization and Investments SOCAR Invests Half a Billion in Resort Construction in Kumbor

Azmont Investments, controlled by an Azeri state-owned company, will invest 500 million euro in the One&Only luxury tourist resort project in Montenegro’s Kotor Bay. It was decided to double the initial €250 million and the entire complex is to be completed within 28 months, stated the Azmont Invesments’ representative Gafar Gurbanov. Last year, the Montenegrin government signed a 90-year lease contract with the State Oil Company of the Azerbaijan Republic (SOCAR) for land for the development of a highend tourist resort. SOCAR initially planned to invest some €250 million in total during the first eight-year period of the lease to turn a 241,695 square meter site into a tourist resort. Representatives of the investor said that this year the construction site will employ 500 people, while next,year this number will reach 3.000. The investor promised 1.200 jobs after completion of construction and it will be the largest investment in Europe.

Montenegro Seeks Partner for €10 Million Real Estate Project

golf courses, hotels, spa and wellness centre, and a range of high-end boutiques, cafés, restaurants and hotels, all spread over 35km which BESIX should be a part of. The value of the apartment complex project has not been disclosed. However, according to the Government’s statement in February, Orascom Development plans to invest € 90 million in the Lustica residential complex project. Montenegro Picks China’s CCCC, CRBC for Bar-Boljare Highway Section

Montenegro is seeking a partner for a public-private partnership to finance and develop €10 million residentialcommercial complex in the coastal town of Bijela. The real estate project is to be developed on a 10.793 m2 land plot at Grabi site. According to the tender conditions, the private partner should transfer 22% of the residentialcommercial complex ownership to the public partner. Bids can be sent until October 14. Belgium’s Besix launches Construction of Lustica Apartment Complex in Montenegro

The Montenegrin government announced that Belgian construction company Besix has launched the construction of an apartment complex in the future marina, which will be part of the Lustica Bay resort project. The Lustica Bay project is being carried out by Montenegro-based Lustica Development, a 90/10 joint venture set up by Swiss-headquartered Orascom Development and the Montenegrin government. The Lustica Development project includes

The Montenegrin government announced that it has selected the €809.6 million worth bid of the China Communications Construction Company (CCCC) and China Road and Bridge Corporation (CRBC) for the construction of a section of the BarBoljare motorway. The talks are to be continued with the aim of concluding final agreements regarding the project design, construction and financing, transport minister Ivan Brajovic said in a statement issued by the government. The construction of the SmokovacUvce-Matesevo section is planned to be funded with a loan from China’s Ex-Im Bank. The 20-year loan will have a five-year grace period and 2.0% fixed interest rate. The 169 kilometer Bar-Boljare motorway will be part of the longer Bar-Belgrade stretch of the EU-defined transport Corridor X that will link Montenegro’s Adriatic coast with the Serbian capital.

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Privatization and Investments EBRD approves €5 million loan to Montenegro for road infrastructure projects The European Bank for Reconstruction and Development (EBRD) has approved €5 million loan to the Montenegrin Ministry of Transport and Maritime Affairs to support improvements to road infrastructure in the country. The proceeds of the loan will be used to finance the reconstruction of a section of the BeraneKolasin road in the northern part of Montenegro with a total length of approximately 10 kilometers (km), the EBRD said in a statement. The sovereign loan is part of a total financing package of €25 million for the benefit of the Montenegrin ministry. A second loan, expected to be signed in 2014, will be used to finance the construction of a section of the road between Jelovica and Jezerine, with a total length of approximately 4.0 km, including a 2.5 km long tunnel. The EBRD investment is complemented by €1 million in technical assistance grants to support project implementation and institutional strengthening in the transport sector in Montenegro, and to support the road maintenance and safety programs in the country. “The project will facilitate regional economic development throughout Montenegro by improving the access that remote areas have to larger markets, which will also increase the attractiveness of these areas to potential investors. In addition, the improvement in road quality will result in a significant increase in road safety,” EBRD president Suma Chakrabarti said in the statement. Since the beginning of its operations in Montenegro, the EBRD has committed over 380 million euro to 36 projects, generating more than 800 million euro of investment in the country.

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Tenders Closedb tenders The Deal for the Sale of Tobacco Company to be Closed Soon Montenegro is close to striking a deal to sell state-owned tobacco company Novi Duvanski Kombinat to a Montenegrin-Serbian consortium comprised from Partner Company, Jaz Express and Primat with German partners for €7.1 million. The negotiation process has been completed, and adoption of the final deal is pending. The construction works should be completed within a year. The investor has pledged to invest €9.4 million in the construction of the new plant and €1.5 million in new equipment. During the construction works, production may continue at the company’s old plant. The consortium plans to sell 40%-50% of its output on the Serbian market and a significant portion in several Arab countries. The new owner plans to employ 100 workers in the first year of operations and increase their number to 150 after five years. Global Ports Holding Selected as the Preferred Bidder for the Port of Bar’s

Company will pay this share in CTGC €8.08 million. The Tender Commission said the draft Contract has been finalized after the negotiation process was successfully completed, and the initial price of €7.1 million has been increased. According to the Contract, Global Ports Holding has committed to undertake investments in restructuring worth €13.5 million, within the CAPEX program over a three-year period.The Turkish company shall implement an additional five-year investment program worth €7.6 million. Global Ports Holding (GPH or the Company), a 100% subsidiary of Global Investment Holdings, is currently the  operator of three  leading  commercial and cruise ports in Turkey. The Port of Bar has a current maximum capacity of 1mnTEUs containers and 6mn tons of general cargo; however, due to the lack of a proper highway, underutilization of the railway network and insufficient infrastructure, the port is currently not being used to its full potential. The Port of Bar used to be the main port of the Federal Republic of ex-Yugoslavia, and as such GPH’s initial plan is to  attract  back  the trade traffic of Serbia, Kosovo, Albania, Macedonia and Bulgaria.  The port will then have the chance to replicate the success of the past years and continue growing in the region.

Open tenders Oil and Gas Exploration Tender Announced

Tender The Tender Commission for Privatization adopted the Draft Sale Contract for the purchase of 62.09% of shares of the Container Terminal and General Cargo (CTGC), which is to be concluded with the Turkish Company Global Ports Holding. The

The Government of Montenegro has invited the tender for exploration of oil and gas for 13 blocks off-shore in Montenegro with a total surface area of 3000km2. The tender will be open for seven months (until February 2014). New restrictions mean that companies with off shore destinations are not eligible to participate as well as those based in destinations where Montenegrin tax authorities have no legal cooperation set in place or the possibility of legal aid. In addition, companies whose owners are not known


Privatization and Investments will also be forbidden to participate. This refers to mother companies,and mother of mothers, since we need to have a clear shareholder structure – explained the Minister of Economy Mr. Vladimir Kavaric. The Government has defined fiscal policy in this area. The state gets to retain 70% of net profit of oil companies, where it will be defined what enters into costs calculation (considering that profit is an expansive category). The Minister Kavaric said that 26 companies have visited the data room so far. List of some companies that visited the data room: Noble energy

USA

Edison Spa

Italy

Exxonmobil

USA

Novatek

Russia

Eni Spa

Italy

Anadarko lec

USA

Ina

Croatia

Jx Nippon

Japan

Total

France

Hess Corporation

USA

Helenic Petroleum

Greece

Trajan/Energian

GB/Greece

Nis (Gazprom)

Russia

Statoil

Norway

Wintershall

Germany

Woodside

Australia

Twe dea

Germany

Montenegro to Seek Concessionaire for Eight Small HPPs The Montenegrin Ministry of Economy is planning to award a designbuild-operate-maintain (DBOM) concession for eight small hydro power plants (SHPPs) in the country. The list of water streams with clearly defined location borders is given in the table below. Table 1. Water streams for concession activity No.

Water stream

Length [km]

Gross drop [m]

Height of water spring [mnm]

Height of estuary [mnm]

1

Bukovica

20,10

490

1440

950

2

Bijela

9,20

217

1050

833

3

Bistrica, pritoka Ljuboviđe

6,60

565

1160

595

4

Kraštica

9,60

450

1180

730

5

Velička rijeka

7,90

1045

1900

855

6

Đurička rijeka sa pritokama

8,10 7,48 6,63

104 580 835

1010 1590 1845

906 1010 1010

7

Kaludarska

19,95

815

1495

680

8

Vrbnica

8,50

535

1215

680

The Bidder, either sole or in consrtium, may apply for a concession for no more than three water streams and may submit, as sole bidder or in consortium, only one offer for the same water stream. The opening of bids will take place in the premises of the Government (old building), on November 18, 2013 at 14.00h. Announcement of the Cable Car “Cetinje – Lovćen – Kotor” Construction Project The implementation of the cable car “Cetinje – Lovćen – Kotor” construction project is underway. Currently, tender documentation is being prepared, after which tenders will be invited (in the middle of September). At a presentation, held in Podgorica on July 8, 2013,there were presented the possibilities for the implementation of this project, as well as benefits to be expected. The estimated project value is €46.5 million and the construction period is 12 months. In the case that the project is implemented

through private-public parnership (by planned model), the investors will be offered a 30-yer concession. The annual revenue was projected to be €4.5 million. The total length of the cable car is 15 km, projected time of travel is 42 min and the ticket price will be €20.00. Investors with proven experience on similar projects, in the construction of cable cars of at least 3km length will be eligible to participate in the tender. Previous activities on this project included the preparation of necessary documentation as follows: • Planning documents; • Project documentation (Preliminary and Main Design); • Feasibility Study; • Environmental Impact Assessment Studies. After construction,the cable car “Cetinje – Lovćen – Kotor” will become the longest in the world. ■

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