Podgorica is planning approximately €90 million in capital investment for 2027, equivalent to around half of its projected annual budget, while proposed wage reforms are expected to increase personnel expenses and financial support requirements for municipal companies.
The planned investment programme covers major transport and environmental infrastructure projects, including Vojislavljevića Boulevard, the western bypass, reconstruction of public squares and continued development of the Botun wastewater treatment project.
The municipality expects to allocate approximately €22 million to the Botun project during 2027, making it one of the largest individual investments in the capital’s proposed programme.
The wastewater treatment development is part of Montenegro’s broader efforts to modernise environmental infrastructure and meet European Union requirements for municipal wastewater collection and treatment. Its financing involves the German development bank KfW and EU-related investment funding.
Wage reforms increase municipal expenditure
The proposed Euro Model wage reforms are expected to create additional financial obligations for local governments. According to the city’s finance secretary, their implementation could increase Podgorica’s annual personnel expenses by approximately €4.4 million.
The municipality also anticipates providing around €6 million in additional support to city-owned companies, which are expected to face higher labour costs. These companies are responsible for essential urban services, including public transport, road maintenance, utilities and other municipal operations.
Their capacity to accommodate increased wage expenses will depend on operating revenue, efficiency and the financial assistance available from the municipal budget. The additional costs will place pressure on the resources available for infrastructure development and public services, alongside the planned increases in employee incomes.
Capital budget execution and investment priorities
Podgorica’s proposed investment programme follows relatively slow capital budget execution. During the first nine months of 2026, the municipality spent approximately €33.5 million, representing 37.5% of its annual capital budget.
The difference between the planned investment allocation and actual expenditure highlights the challenge of translating budget provisions into completed construction activities and payments within the financial year. The proposed €90 million programme could generate procurement opportunities for local construction contractors and engineering companies, particularly in road infrastructure, municipal utilities and environmental projects.
The allocation remains subject to the final budget procedure and approval by the city assembly. It represents a proposed capital budget rather than expenditure already committed through construction contracts. Implementation will depend on project readiness, procurement capacity and the municipality’s ability to sustain investment financing alongside rising recurring personnel and operating costs.
