The Competition Protection Agency (CPA) has initiated an inquiry to determine whether the Ministry of Finance and the former Ministry of Transport and Maritime Affairs violated the State Aid Control Law by awarding the management of the construction project for the first section of the highway to the state-owned company Monteput.
According to a statement from the Prime Minister’s Office, the CPA’s ruling was issued on December 26. Dragan Damjanović, the President of the CPA, explained that this action was in line with obligations to European partners.
“Although domestic legislation, aligned with European regulations, allows for direct assignment of such projects to a company majority-owned by the state, the European Commission, through the closure benchmark for Chapter 8, has requested an investigation into the entire process and all actions taken during this procedure,” said Damjanović.
This measure was part of Chapter 8 – Competition, which remains an outstanding requirement on Montenegro’s path toward full EU membership.
The ruling instructed the Ministry of Finance (MF) and the Ministry of Transport (MS), as the legal successor to the former Ministry of Transport and Maritime Affairs, to clarify the facts and information suggesting potential illegality of state aid.
“MF and MS are instructed to temporarily halt the allocation of funds related to the project mentioned, until the CPA decides on the compliance of potential state aid with the law,” the ruling stated.
When asked if this decision could impact the continuation of the highway’s construction, Damjanović clarified that the funding suspension only applies to the completed first section and does not affect the ongoing construction.
In March of the previous year, the Ministry of Transport provided extensive documentation from 2013 and 2014 at the CPA’s request. However, it was found that key documents regarding the tender procedure for the Smokovac-Mateševo section from 2009-2010 were missing, including decisions on tender announcements and the suspension of the procedure. The Ministry stated that it did not possess these documents.
“The Ministry’s submission noted that they do not have the requested documentation and that, upon reviewing the available records in the electronic archive, they found a report from the Council for Highway Construction in Montenegro dated March 3, 2010. Given the significant passage of time, and the fact that several relocations have occurred within the Ministry and that officials involved in these matters are no longer employed, the Ministry of Transport requested that the Agency consider the impossibility of obtaining this documentation,” the CPA ruling explained.
Given the legal status and activities of Monteput, and the decision to establish a business unit for managing the Bar-Boljare highway project, the CPA noted a reasonable suspicion that the company could be considered a recipient of state aid in this case.
“Since the Ministry of Transport did not provide the requested data and documentation, leaving the suspicion of unlawful state aid unresolved, the Agency believes that there is a credible suspicion that the measure in question could constitute state aid under Article 2 of the State Aid Control Law and Article 107, paragraph 1 of the Treaty on the Functioning of the European Union,” the CPA stated.
Initially, in 2009, a Croatian consortium led by Konstruktor from Split won the tender for the construction of the Bar-Boljare highway, offering to complete the job for €2.77 billion. The second-place bidder was a Greek-Israeli consortium of companies Aktor and Shikun Binui, with a bid of €3.92 billion.
However, as the Croatian consortium could not secure the required bank guarantees, negotiations continued with the Greek-Israeli consortium, which also failed to provide them. Three years later, in July 2013, the government selected a bid from Chinese companies CCC and CRBC, which offered to build the priority Smokovac-Mateševo section for €809.5 million.
Construction of this section began in 2015, with an initial completion deadline of late 2019. However, the first section was not opened until the summer of 2022, with costs reaching nearly €1 billion.
