Press Release: Who is responsible for the current situation in the area of concessions?

The Parliamentary committee on Economy, Finance and Budget will hold a control hearing tomorrow on topic: “Implementation of the policy, i.e. the laws in the area of concessions, with the review of the realization of the conclusions of the Parliament of Montenegro, brought in regard to the reviewing the work of the Commission for concession in 2013” and, therefore, further insist on the need of the urgent improvement of the Law, practice and transparency and accountability in this area. Namely, last year, the Parliament has adopted the conclusions in regard to the work of the Commission, in which they appeal for, among other things, the need of the amending the Law on concessions, as well as the extension of the jurisdiction of the Commission, in order to better regulate the matters and improve the control.

It should be noted that the Draft Law on the public-private partnership (PPP), which regulates the area of concessions as well, changes the institutional coordination, the preparation of the PPP and reporting process, by establishing a new body, Investment Agency. The Agency will be accountable to the Government for its work, while the Parliament is almost completely excluded from the control in this area. Taking into consideration previous practice, the policy of the Government in the area of concessions, these solutions are debatable, they do not improve the oversight and they are not in the accordance to the Parliamentary conclusions.

Furthermore, the Draft Law stipulates that the public partner should deliver the data on supervision over the implementation of the contract, all changes and the reports on collection of fees only once a year or at the request of the Agency. It is bad as well that the proposed solutions do not stipulate special procedures for the selection of the private partner, which represent the avoidance of the application of the Law on public procurement. Likewise, the content of the register of the PPP and concessions is not being extended, nor the maximum period for conclusion of the contract between the public and private partner is stipulated.

In addition, the last report, which includes information on the debts of the concessionaires, was prepared by the Government in early 2013. Since September, the public cannot gain insight into a concession contracts register. We are recalling that the State Audit Institution has given a negative opinion on the compliance of the register with the regulations of the Law on Concessions.

By not offering viable legal solutions to prevent further irrational exploitation of natural resources, the government shows no intention to improve the chaotic situation in this area. The Institute alternative once again points out the priority of resolving the issues raised in the area of concessions and the obligation to respect the conclusions of Parliament.

Research Coordinator

Who Still Cares About the Affairs of the Previous Mayor

Miomir MugošaThese days we are impatiently looking forward to the Local committee for Carine and Aluminium Plant Podgorica, KAP (full title is pretentious and too long) to finally complete its work and prepare the announced report. That will be the first step in the fulfillment of what was presented as a key point of the agreement on the formation of DPS-SDP government in Podgorica – whether the activities related to the sale of land to company Carine and the demarcation between the capital city and KAP have damaged the public interest.

Although at the time of forming the government in the capital city, this was mentioned as a burning issue, nobody seemed to hurry to complete it. The Committee, which is already two months late with the report, was established seven months after the government was formed in Podgorica.

This process is not interesting because we expect it to make some significant view on whether the damage was to the public interest was indeed done, with the activities related to the “Carine” and demarcation with KAP. It is clear that the Committee composed of 4 members of DPS and one member from SDP cannot bring any revolutionary decision on activities of the previous mayor, Mugoša, especially if you know that the President and members of the Committee from DPS were councilors during mandate of the previous mayor – therefore, they approved the decisions whose legality is now being assessed.

The process is interesting as an example of the combination of the executive and representative branches of government in the Capital city interwoven to the extent that they cannot be even recognized. This Committee was established by the mayor Stijepović and it is composed of the councilors of the local parliament who were assigned with the task to prepare the report about previous mayor’s aforementioned activities. Based on their report, the mayor will compose a new Act to inform – none other than the local parliament – i.e. the councilors themselves. What would be the next steps of the parliament, it is still not known. Judging from the facts at our disposal now, the councilors of DPS and SDP would probably wait for further instructions of the mayor.

This would be the same as if the Government would initiate the parliamentary investigation, appoint the Inquiry committee and order the MPs, who appoint and control the Government, to write a report. The local parliament, as the body which appoints the mayor and controls his work, is now in the position that it has to deliver reports to the mayor.

Although the Law on Local Self-government clearly stipulates the possibility for the parliament to establish the committee on an ad-hoc basis, the councilors of DPS and SDP have left this to the mayor.

At the beginning, it was said that the Prosecutor’s Office would be invited to examine these contracts while the next engagement on this case was the one of the special auditor. Moreover, it was announced that the State Audit Institution would examine the activities of the former mayor. (SAI is being mentioned whenever we talk about some sort of control, while forgetting at the same time that SAI is not obliged to perform audits according to the dictates of anyone, including political parties). The opposition has also proposed that the parliament establishes the committee on this issue, but instead of that, DPS and SDP have chosen that it should be the mayor’s committee.

It is clear why is DPS happy with this arrangement (if you have to be controlled, the best solution is to do it yourself), but why did SDP agreed upon it, refusing the opposition’s proposal? Their inarticulate justification was that the participation of the mayor would help in carrying out this process faster and with all the necessary information – “we will have at our disposal all the information in the possession of the service.”

It should be noted that all information in the possession of the service of the capital city are available not only to the councilors, but to all citizens willing to write the request to the free access to information. One of the consequences of their decision is the refusal of the opposition to have anything to do with the work of such commission.

To make thing worse, in the explanation of the Decision on the establishment of this commission it is stated – if this proves to be a good model, we will use it in the future. Therefore, it is possible that we will have new parliamentary committees established by the mayor whose task would be to file a report which would be used by the mayor to report to the parliament on some issue.

The position of the councilor in Montenegro is shameful enough the way it is and it did not need this last humiliation. Unprofessionalized status (the members of the ruling coalition get appointed for the positions in other institutions while the members of the opposition receive the flat rate for their work), extremely short deadlines for the adoption of the budget, the correction of errors in budget planning through the re-balancing in December, forged final accounts of the budget, delivered with a delay of several years in many municipalities, the work reduced to stamping the decisions of the local authorities.

Whatever the outcome of this Committee’s work is going to be (and it is obvious that it will not be anything significant), I hope that it is going to be the last one. If the councilors want to conduct an investigation, if they want to be more active in controlling the executive branch, they should do it themselves, and not by the order of the mayor or the municipality president. If nothing else, it should be done in order to retain the councilors’ personal dignity as well as the illusion that the local parliaments are somewhat important in Montenegro.

Public Policy Researcher

Text originally published in the ,,Forum” of daily Vijesti

Our contribution to the control hearing on concessions

On Monday, the Parliamentary committee on Economy, Finance and Budget will hold a control hearing “Implementation of the policy, i.e. the laws in the area of concessions, with the review of the realization of the conclusions of the Parliament of Montenegro, brought in regard to the reviewing the work of the Commission for concession in 2013”.

Wanting to contribute, in order that this hearing to be successful and effective, Committee members were submitted the data which we consider to be useful in examining in which way the policy in the area of concessions is being implemented and to which extent the conclusions of the Parliament are being realized.

Namely, last year, the Parliament has adopted the conclusions in regard to the work of the Commission, in which they appeal for, among other things, “the need of the amending the Law on concessions, especially taking into consideration that the current competencies of the Commission are not satisfiying for achieving better regulation of the matters and the control.

We remind that the Draft Law on Public-private partnership (PPP), put on the agenda for the public discussion during March and April earlier this year which regulates the area of concessions, significantly different regulating the institutional coordination, the preparation of PPP and reporting process, which is good solution when it comes to abolishing numerous bodies which were spending significant budgetary resources while not having any significant role in these projects.


  • It is still unclear how exactly would the Investment Agency, whose establishing is planned, improve the expert core, nor it is not stipulated does the Agency “take over” the employees from the institution which are being abolished (Secretariat for Development Projects, Directorate for Transformation and Investments within the Ministry of Economy, etc. This Draft Law abolishes the Commission for Concessions as well);
  • Except the possibility of the insight in the annual report of Investment Agency work which should be established 90 days after the Law entries into force, the Parliament is completely excluded for the control in this area;
  • It is stipulated that the public partner submits to the Agency the data on supervision over the implementation of the contract, all changes and the reports on collection of fees only once a year or at the request of the Agency, which is problematic from the aspect of transparency;
  • The special procedures for the selection of the private partner are stipulated, which would be defined later on in the bylaws, which represent the avoidance of the application of the Law on public procurement.
  • The content of the register of PPP contracts will not be extended, since without the obligation to quarterly submit the reports grantor of the concession, i.e. the public partners about the state of collection the concession fees, it is not possible to improve the scope of information to be published. Detailed prescribing phases and elements in the preparation and approval of projects and managing two different registers with all mandatory items still does not contribute to transparency, since the publishing of essential elements that hitherto have not been public is again avoided;
  • The maximum period in which it is possible to conclude a contract between a public and a private partner is not specified, which leaves space for the conclusion of the contractual relationship that due to the length does not need to be in the interest of the public partner. Such case was, for example the conclusion of the contract on the lease of Luštica Peninsula for a period of 99 years. Comparative practice shows that this period must be stipulated. Croatian law on PPP, for example, in Article 4 provides that the PPP contract is concluded for the fixed period which shall not be less than three nor more than forty years. Article 18 of the Law on PPP and concessions in Serbia stipulates that the deadline for the conclusion of a contract may not be shorter than five nor longer than fifty years.

Key information of poorly managed and non-transparent policy in the area of PPP and concessions:

  • The Government has adopted the Report on the implementation of the concession policy in January 2013 and since then it does not inform the public on the condition in this area. Therefore the current amount of debt of the concessionaires is unknown. The total amount of debt at the end of 2012. was more than 12 million EUR;
  • The mandate of the Commission for concession has expired in September 2014, but the Government has appointed a new one not before April 2015;
  • Since September 2014, the website of the Commission, within which the register of concession is kept, is unavailable;
  • The Commission has not yet prepared the Annual report for 2014;
  • The Commission had considered, since its establishment in 2009 until the end of 2013, 13 objections related to the awarding of concessions, which implies that the scope of their work and competencies was limited, while having significant budgetary resources allocated for their work.
  • Apart from inadequate institutional regulation in the area of concessions, the coordination between the institutions on the national and local level is poor, which is evident from the fact that municipalities do not adopt the concession plans, although they are obliged to do so by the Law on concessions. In its Report on the Registry of concession contracts, the State Audit Institution points out that since the Law has entered into force, only Municipality of Berane and Municipality of Kolašin have adopted the concession plans in 2011 and 2014, respectively.
  • Municipalities do not own the data on the type of the concession, based on which the payment is being done. Consequently, municipalities are not able even to realistically estimate the revenue estimates on annual or long-term basis. Initiatives to improve the collection by the Department of Public Revenues existed, but there is still no significant progress;
  • The special limitation of the system of control over the implementation of contracts on awarded concessions, as well as control of payment of concession fees, is the inspection. This is the problem due to the shortage of staff in the Department for Inspection in all areas, but also due to incomplete inspections.

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Despite the progress, citizens continue to be critical in assessment of the state administration

Although more than 60% of the citizens believe that the quality of work of the public administration is bad, they assess the work of the state authorities better than three years ago, according to the survey of public opinion, conducted by Ipsos Strategic Marketing for the purposes of Institute alternative (IA).

One quarter of the respondents (25%) said that quality of the work of the state authorities has improved in last three years.

Over half of respondents, 52%, believe that the quality of work of the public administration is at the same level, while 17% of them consider it worse.

However, the general assessment of the quality of the work of the state administration has improved to some extent. The percent of citizens who consider the quality of work as bad is lower when compared to 2012.

Three years ago, 68% respondents assessed the quality of the work as bad, while this year 62% gave the same answer.

More than one third of the respondents (35%) are satisfied with the quality of work of our administration.

In this general assessment, there are some deviations which are usually determined by regional differences, ethnicity and education level.

In terms of education, respondents with secondary education are the most severe when it comes to assessment of the quality, while the regional differences come to the fore in this area as well, because citizens from the north assess the quality of state administration significantly worse in relation to others.

Likewise, in terms of ethnicity, the Serbs are the most critical to the work of state organs, because the vast majority of them, 81%, believe that the quality of work is poor.

If we look at a longer time period, the “image” of the state administration in the eyes of citizens in the past five years has decreased, as the average score for quality of its work, on a scale of 1 to 10, fell from 6 to 4.8.

A public opinion survey on the work of the state administration, for the purposes of IA, was conducted in the period between April 3rd and 9th this year, on a sample of 1062 respondents. It took place in 17 cities in Montenegro, 130 territories of polling stations, urban, suburban and rural environment.

IA in its work seeks to contribute to the better quality of work of the state administration

One of the main principles of our work is to offer recommendations based on analysis and proofs, therefore one of the goals in our further work will be the usage and deeper analysis of the data gained on the basis of this survey, as well as the advocacy for the more efficient reform of the state administration.

Stevo MUK

President of the Managing Board

Establish the Fund in order to stimulate media pluralism

Non-governmental organisations Centre for Civic Education (CCE), Centre for the development of NGOs (CDNGOs), Institute Alternative (IA) and Goran Đurović, member of working group for drafting of Proposal of Law on the amendments of law on electronic media, expressed their satisfaction due to the continuation of work of TV “Vijesti”.

Upon the payment of its tax debts in line with the law, only Montenegrin private television with national frequency secured the conditions to continue with operation and provide its further contribution to better informing of citizens on issues of utmost importance for their lives.

Government of Montenegro is obliged to ensure the conditions for the development of media pluralism and quality informing of Montenegrin citizens on all issues of public interest. Account blockade of independent TV Vijesti, due to tax debts, is a consequence of inconsistent application of legal regulations in the sphere of media. Government had to act timely in order to prevent years-long unfair competition at the modest marketing-media market in Montenegro. TV Vijesti is competing at the market with televisions that produce almost their entire programme in Serbia, and broadcast it in Montenegro, as well as with RTCG, which is financed by tax payers’ money, even when it makes enormous losses. Additionally, televisions with headquarters located in Serbia have been failing to meet legally prescribed obligations within their own production for years, which determine the minimum of quotas, and have not been reprimanded by anyone or banned to operate according to law.

In addition, TV Vijesti, as well as all other electronic media established in Montenegro, found themselves in a unenviable situation due to the fact that Government of Montenegro has been refusing for years to put in function resources allocated for the stimulation of media pluralism. Group of NGOs recently proposed solutions which lay down the conditions for the functioning of Fund for the stimulation of media pluralism. Solutions elaborate on the procedure of allocating the resources to broadcasters for the production of content of public interest. Fund resources can be used by electronic media which have the approval for work from Agency, that cover certain local, regional territory or operate on the territory of state and that have significant production (more than 25% of its own in total production). This ensures that electronic media, which actually produce programme in Montenegro, have the possibility of improving their content in order to better inform the public. Council of AEM makes the final decision on the allocation of resources, but based on the proposal of independent experts. Fund should be financed with compensation paid by the providers of AVM services on the request (cable operators), that have about 170,000 users, which in the proposed percentage should ensure about 800,000 EUR on annual level. From another source, budget of Montenegro with fix allocation of 0,005% of GDP, it is possible to ensure approximately 200,000 EUR on annually. This amount would not burden the budget of Montenegro additionally, and it could significantly contribute to better informing of citizens when it comes to questions of public interest.

Fund for the support to radio stations, financed based on tax paid when registering vehicle, was recently established with the Agency for electronic media. In that manner, TV stations are discriminated compared to radio stations. It is necessary to secure resources that would be allocated for TV stations as well.

Had the Government and Agency for electronic media earlier applied laws equally for everyone, great number of media would not even function today, and those that are significant for the informing of citizens on issues of public interest, would be in a better financial situation. Because of the inaction of state institutions and failure to apply the law equally, those from whom Montenegro could benefit suffered the most.

On behalf of non-governmental organisations Centre for Civic Education (CCE), Centre for Development of Non-governmental organisations (CDNGOs) and Institute Alternative (IA)

Goran Đurović, member of the Working group for the drafting the Proposal of Law on the Amendments to the Law on Electronic Media.

Press Release: Concessionaires without a control

Concession policy in Montenegro is not controlled, non-transparent, and brings multimillion damage to the both national and local budgets, but Government does not do anything to improve such situation in the area for years, since it does not publish neither data on contract nor the data on the concessionaires’ debt, and furthermore, does not improve the legal regulations.

The State Audit Institution (SAI) has given the negative opinion on the compliance of the register of the contracts on the concession with the provisions of the Law on concessions, pointing out that the register is neither available, nor complete, nor available in the electronic format. Moreover, SAI points out to the frequent failure to submit the data, contracts on awarded concessions, and changes of the basic contracts, by the Ministries, national and local bodies, which should be defined as a violation of the Law on concessions.

This additionally contributes to the non-transparency, since the Government does not inform the public about the situation in this area for years. Since January 2013, the report on the implementation of the concession policy has not been prepared, while the Commission for Concession still has not published the report for the last year. Although the legal mandate of the Commission has expired in September, the Government has appointed new Commission not before April this year. Since the termination of the mandate of the previous Commission, it was not possible to get the details about the concession contracts, since the website of this body still does not work.

Beside the fact that the register on concessions is not being regularly updated, the current amount of information included is exceptionally limited. This problem was repeatedly pointed out by Institute alternative in its reports, emphasizing the need to publish the plans of the repayment of the concessions and other details of the basic contract.

The draft law on public-private partnership (PPP), which was at the agenda for the public hearing in March and April this year, does not improve this issue, since it does not extend the scope of information which should be published, nor it prescribes the obligation of submitting the information on quarterly basis about the state of collection of concession fees and implemented oversight by a public authority. In relation to this, it is necessary that the law stipulates that the register of contracts on PPP and concessions contains the information about collected resources, delays, as well as the plans of the financial repays, which is extremely important when it comes to allocation for the local self-governments.

Research coordinator