Visit-Montenegro.com : Abu Dhabi’s Sheik, Billionaire Lacis, Russians, Egyptians – On Hold!

Podgorica – Numerous land-owners at Budva’s Riviera, who have announced long time ago their readiness to invest into building of hotel complexes, are being prevented from starting their projects by – bureaucracy.

Despite the fact that key-people in the country, both in the government and Budva itself – Milo Djukanovic and Svetozar Marovic – keep emphasizing the necessity of development, investment, foreign partners, the problems lies in their yard where they have the biggest influence.

In order to start working on their real-estate, investors must have building licenses. But, in order to get that, the necessary precondition is the adoption of the spatial-planning documentation, spatial project, location studies. In certain situations, one waits for years before all this is done.

Plans and projects are prepared by Municipality’s services. Then, these go for clearing at the Ministry for Economic Development, only to be returned in order to be adopted by the local Parliaments.

After this, the preconditions for obtaining the license are met, but there are still certain additional procedures in the Municipality and the Ministry which have to be obeyed.

All of the above should not even be a problem if all sorts of adoptions and clearances did not actually require months, sometimes even years of patience.

Problem with bureaucracy in Montenegro, both at local and Republic’s level, is pinpointed as the key-precondition that needs to be resolved before the development is achieved. It is not known that anyone had been held responsible for this problem.

Montenegrin business associations claim that the key to the problem is not with the heads of key-sectors in the administration, but clerks of the lower rank. Bureaucracy is, usually, marked in the world as the segment of society which opens space for corruption.

It would be logical if both Djukanovic and Marovic, who are the most vehement advocates of country’s development, were to put much more efforts into creating preconditions for investments. If it comes out they are not the problem, all it takes is that they, in the real sense of the world, put pressure on their associates and issue orders to speed up the procedures.

There is almost not a single construction site on the numerous attractive locations on Montenegrin coastline that had been purchased. Selling of land, which has resulted with the influx of a huge capital to Montenegro, later resulted, among other things, with the increase of real-estate prices. Now, the boom on this market has come to an end. And, investments are not continuing.

This problem is particularly evident at Budva’s Riviera, where the estimated investment, without Buljarica and Jaz beaches, came up to several billion Euros. This, also according to the brochure published for internal use by Budva’s Municipality and distributed to government’s highest ranking officials.

Concretely, investors who are waiting for the adoption of the spatial projects include Sheik Sultan bin Kalifa al Nahijan, Greek billionaire Spiros Lacis and Jersey Bank. Their consortium, according to Vijesti’s information, had bought land at the location of Bijeli rat in the vicinity of Sveti Stefan from private owners and announced the building of hotel-bungalow complex with minimum five stars.

Budva’s Municipality has been informed that this project would cost at least Euro 150 Million. At this point, however, the procedure came only to the point of the development of the spatial project which – bearing in mind the above described procedure – means that its’ realization is definitely everything but ‘just around the corner.’

‘On hold’ status is also current state of affairs for honorary Belgian Council in Montenegro, Jean Luc Dumortier, who has bought more than 50 hectares of land on the Spas Hill, expressing his readiness to become a partner with the Municipality which owns additional 30 hectares at the same location.

Plan of Dumortier, who is the owner of “Royal Montenegro” company is to build two hotels and golf courts worth more than 200 Million. However, realization of this project would also have to wait, as the spatial project has not been finished yet.

Investors from Egypt also have difficulties with licenses. Their company, “Mena Investment”, which is connected with famous “Orascom”, had bought seven hectares of land at Cape Skocidjevojka and prepared the project for the building of an exclusive tourist complex, value of which is estimated to 100 Million. However, the study of the project and the location had not been cleared yet.

Among other things, “Orascom” had built luxurious Red Sea summer-resort of El Gunu, and that – in the middle of the desert. As Vijesti have learned, this investor had come to Montenegro following the invitation of certain top-government officials.

Russian company “VAS Investment”, which has announced that its’ hotel at Smokvica beach near Rezevici would be managed by Kempinski, is also waiting for the clearance of its’ spatial project in order to obtain the building license. This project is estimated to Euro 220 Million. Complex would be built on 18 hectares of land, 12 of which had been bought from the private owners and six from the Municipality.

According to the information obtained by Vijesti, Russian “Mirax” group, headed by billionaire, Sergei Polonski, is also waiting for the study of the location for Lucice beach, where they have purchased land from private owners. Estimated value of this hotel is Euro 250 Million. Hotel would be managed by the US “Inter State Group”. “Mirax”, which have recently obtained a clearance for the spatial project at Cape Zavala, has informed the Municipality that the hotel would be built in the old-architectural style. Solution for this project has also been submitted.

Adoption of the Detailed Spatial Plan (DUP) is also what “Capital Estate” company is waiting for. The company is owned by another Russian, Andrei Dobrov. Dobrov, who has bought land from private owners and the Municipality in Becici, in the vicinity of “Naftagas” hotel, has announced earlier that the hotel he would build would be worth minimum Euro 60 Million and would be managed by “Sheraton” hotel group.

Hotel company “Radison SAS”, which is the part of “Rezidor Group”, had purchased land at Kamenovo, above the regional road. Its’ plan is to build a tourist complex with estimated value of Euro 50 Million. However, there is still no study of the location.

Adoption of DUP is also eagerly awaited by Russian company “Adriatic Tours”, which has purchased land from private owners on the location of former “PTT” company hostel at Rafailovici. Hotel would also be managed by some foreign hotel management company.

Renowned Austrian company “Raiffeisen Evolution” has offered a joint investment to the Municipality of Budva and the private owners at the location of Slava luka in Rezevici. The goal – to build a hotel – is preconditioned with the adoption of a spatial plan for this area, which is not even in sight.

A business building, whose value is estimated to more than 100 Million, is envisaged by a group of investors at the location of the current football stadium of club “Mogren” in Budva. DUP has not been adopted yet. At this moment, several investors, including Russian companies “Metropol” and “Mirax” are interested in signing a deal with “Mogren.”

Investor promises to build a new stadium for the club at an alternative location and would give it a part of the ownership over the new complex, which would settle down problems with “Mogren’s” financing.

Apart from great investors, who have invested large amounts in purchasing the land, there are also smaller ones. Both big and small are facing the same problems.

“Slovenska plaza” Could Blossom, all that is Missing is – DUP

Tourist-hotel company of “Budvanska rivijera”, which owns the biggest part of land at Slovenska plaza, has agreed arrangements with Abu Dhabi’s Royal Family and Russian company “Metropol”, which are valid several billion Euros. These agreements had not been signed yet.

Detailed spatial plans for the parts of Slovenska plaza have also not been adopted, although some major projects are at stake for quite some time.

As it has been agreed, Royal Family offers “Budvanska rivijera” a percentage of ownership in the future hotel complex. In return, it would receive the land where this hotel complex would be built upon. Arabs have informed their hosts that their hotel would be luxurious object with the value of at least Euro 800 Million and that the complex would be ran by famous “Fairmont hotels”.

“Metropol” also promised percentage in the ownership structure of the future hotel and also obtain building site for its’ future object.

Russians have already announced that the new hotel on Slovenska plaza, building of which would cost several hundred million Euros, would be managed by company “Jumeriah Hotels and Resorts”. “Jumeriah” manages one of the finest hotels in the world, Dubai’s resort in the shape of the sail. “Metropol” would build a similar hotel in Budva, which would make it unique in Europe.

(16 July 2008)

By: Zdravko VUČINIĆ