Press release: No progress in regulating concessions

IA’s press releaseon
the Report on the implementation of obligations under concession agreements adopted by the Government on January 24 2013.

In the past year, no progress in the legal, institutional and control regulation of concessions in Montenegro has been made. Problems, identified in this area over the previous years, are still present. Specifically, a new legal framework for the area of concessions and public-private partnerships hasn’t been adopted yet although the working group for drafting the Bill of Law was formed in June 2011 and has held a series of consultations with experts from the EU and SIGMA in order to make the Bill. Therefore, after frequent announcements from the Office of the Deputy Prime Minister that the area of concessions and public-private partnerships will be regulated by a single legal framework, it is still not clear what is a result of one and a half year old “work” on the legal framework and is there a political commitment to finally adopt this Law during the 2013, and thus to provide a transparent and efficient management of projects of this type.

Apart from the lack of an adequate legal framework, there is also a problem of unclear and “overlapping” jurisdiction and poor coordination among institutions which award and manage concessions. As a result of this confusing and imprecise institutional arrangements, there is no experts in this field in Montenegro. Concession Commission decides on a slight number (12) of complaints and has no other jurisdiction in this area, although significant annual budget (88,634.73 euros – Commission for Concessions; 35,590.47 euros – Commission for concessions and BOT) is allocated for her work.

Poor coordination between institutions at the national and local levels results in the absence of local plans of concessions. Some local administrations, as the audit report on the control of the State Audit Institution for the Municipality of Kotor demonstrates, don’t have any information “about the type of concessions on the basis of which the responsibility, maturity and payment of concessions at the state level as well as about the time that elapses from the time of collection to the consolidated account of the State Treasury to transfer to the account of the Treasury of the Municipality. ”

Inadequate system for collecting concession fees, and (inspection) monitoring of contracts implementation is also a specific restriction. Therefore, on behalf of concessionaires arrears in 2012 is over 12 million euros.

Lack of transparency is largely caused by incomplete central register of concessions, since the register on the Commission’s website for the concession does not include concession repayment plans or complete contracts on awarded concessions and data on contracts and obligations of the concessionaire in 2012 are completely missing.

The previous concession policy in Montenegro was unplanned, non-transparent, unsufficiently controlled, and as such requires urgent reform. In this respect, it’s necessary as soon as possible to adopt legally defined institutional framework in order to ensure adequate planning and effective monitoring system of collection and implementation of concession contracts.

Jovana MAROVIC
Research Coordinator

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