Problems with concessions

A year after the amendments to the Law on concessions entered the parliamentary procedure, Montenegro still doesn’t have a completed and adequate legal framework in the field of public-private partnerships and concessions. The team in charge of making the amendment proposals was formed by the decision of Commission for Economic Policies and Financial System of Government of Montenegro in June 2011 and it was tasked with the submitting a proposal of the amendments to the Law on Concessions to the Government by the end of July 2011. However, the work at the changes of law has been stalled with the explanation that it was more meaningful to introduce a single legal framework for both public-private partnerships and concessions.

The Government’s announcements that Montenegro was entering the “phase of public-private partnerships”, as well as the numerous deficiencies of the Law on concessions from 2009 (lack of synchronization of provisions about competitive dialogue, procedures, certain definitions etc with the EU directives) and of the Law on private sector participation in conducting public services from 2002 should accelerate the adoption of new legal provisions. The same conclusion can be drawn based on the large number of cancelled concession contracts which, according to the work of Commission on concessions, increased even more during the first quarter of 2012.

Nevertheless, the described dynamics of the law adoption in the field of public private partnership and concessions demonstrates that it is not at the top of Government’s priorities.

It is necessary to point to the difficulties in implementing the current provisions of the Law on concessions. According to the Law, Commission on Concessions is obliged to make and regularly update the register of concession contracts at its Internet presentation. With the two years delay in completing this register, Montenegrin public is not in a position to have an insight into the list of concession contracts since the Commission’s website is out of order.

New legal provisions should extend the content of the Register on concession contracts and public private partnerships to include also the debt and repayment plans. The public should have in insight into the contracts based on which a certain concession was granted or the public private partnership formed, including the financial reports about the realization of concessions and public private partnerships. In that way, the transparency of the entire process and the quality of contracts would increase.

Jovana Marović
Research coordinator

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