The public-private partnership (PPP) agreement for the construction of Hotel Lokanda, signed at the end of March between the Municipality of Cetinje and Talija Company, has not yet come into effect, “Vijesti” has learned.
Both parties have until December 5 to resolve all obstacles, as the guarantee of Talija Company, valued at €250,000, will expire on that date. If not addressed, the funds will be transferred to the Municipality and the partnership will legally terminate.
The agreement, Montenegro’s first PPP project under the 2019 PPP Law, is worth €13.78 million and covers the construction of Hotel Lokanda, an underground parking garage, and the development of Trg umjetnika (Artists’ Square). According to the Municipality’s statement, the period for preparing project documentation is six months, followed by 24 months of construction, and the operational phase will last 30 years after approval.
Nikola Đurašković, head of the Municipality, said that all procedures and approvals are complete, and the land is owned by the Municipality. Talija Company will manage the project through a special purpose company (SPC).
“Because this is the first PPP under the 2019 law, certain barriers had to be addressed and adjustments made with relevant state institutions, primarily the Ministry of Finance. We are in the final phase and expect to start preparing project documentation shortly, with construction beginning in spring 2026. Documentation must be completed within six months, and construction within 24 months,” the Municipality stated.
Under the agreement, Talija Company is responsible for 30% of the investment (€4.13 million), while the Municipality covers 70% (€9.64 million), mostly for the underground parking and public infrastructure.
Talija Company, part of the Casa del Mare hotel group, confirmed that the SPC was established this year following the tender. They stressed that the PPP agreement must be formally signed before any construction or operational activities can begin. “Once signed, the SPC will begin construction and subsequently manage Hotel Lokanda,” the company stated.
Founded in 2008 in Herceg Novi, Talija Company is led by Nikola Milić, with Vukić Milić as an authorized representative. Speaking at the signing, Nikola Milić emphasized the historical and cultural importance of the project: “Lokanda represents both honor and responsibility—to Cetinje, its people, past generations, and future visitors. Its restoration signals that Montenegro respects its history while building for the future.”
Originally built in the mid-1860s at the end of Njegoševa Street and Artists’ Square, Hotel Lokanda was destroyed in the 1979 earthquake. It is recognized as a cultural property and part of the historic core of Cetinje, meaning any work must comply with Montenegro’s Law on Cultural Property Protection.
Through this project, the Municipality aims not only to preserve cultural heritage but also to enhance tourism and accommodation capacity and create new jobs. The project covers 2,160 square meters, with a 48-bed hotel and 130-space underground parking.
The tender for the PPP was announced on October 30 and lasted until December 16 last year, with an estimated value of €13.78 million. Only Talija Company applied and was ultimately selected as the partner.
