Press release: Municipalities unprepared for public- private partnerships

Current implementation of public-private partnerships at the local level in Montenegro is characterized by a number of problems. Not being familiar with the specifics of this model of filling the budget deficit, and thus rushing into its implementation, imprecise risk sharing between the public and private partners, violation of deadlines, are just some of these problems.

Municipalities do not have the necessary expertise in public-private partnerships. Professional support is not provided from the national (central) level, since there is no institutional framework set up that would help in the preparation and implementation of these types of projects, due to the lack of legal regulation.

Access to the concluded contracts on public-private partnership is hampered by the lack of an electronic database. When it comes to concessions, a registry that is updated by the Commission for Concessions does not contain information about the financial repayment plans, nor the contractual obligations between the concessionaire and the grantor. Municipalities still do not adopt annual plans for concessions although they are bound to do so by the Law on Concessions.

A particular problem in the implementation of the concession policy in Montenegro is the system of collecting concession fees applied by the Ministry of Finance in cooperation with the Tax Administration. Debts of concessionaires that measure in debts have a negative impact on the financial stability of local governments, which are also not able to monitor (or have an insight into) the financial plans for repayment of concessions that were granted in their territory. Local governments still do not have any insight into what is the subject of the concession on the basis of which the State Treasury executes payments, nor into the time frame for payments. The State Audit Institution pointed to this problem while conducting audits in four municipalities (Bar, Bijelo Polje, Kotor and Plav) since the adoption of the Law on Concessions in 2009.

The findings of the Institute of fulfilment alternative preconditions for the implementation of the PPP at the local level are part of the analysis “Local governments and public- private partnership” that is made in the framework of the project “Corruption at the local level – Zero Tolerance” . The project is supported by the European Union and implemented by the Centre for Civic Education (CCE), in partnership with the Institute Alternative (IA), NGO Bonum from Pljevlja and NGO Hope from Herceg Novi.

Jovana Marović
Research Coordinator

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