Montenegro Plans to Grant Croatia’s Konstruktor 60 More Days for Motorway Construction Guarantees

The council in charge of motorway construction also said it will recommend to the cabinet to open preliminary talks with the second-ranked bidder, Greek-Israeli consortium Aktor/HCH, in case the Croatian consortium fails to provide the guarantees needed for the completion of the financial part of the deal in the 60-day period.

In this way the government will minimize the loss of time necessary for the first or the second ranked bidder to conclude the financial part of the deal, the council said in a statement on Friday. It added that the guarantees Konstruktor has so far provided were not enough for the final signing of the financial contract.

Montenegro signed in June a deal with Konstruktor for the design, construction, operation and maintenance of the 169.2 kilometre Bar-Boljare motorway.

The motorway will connect Montenegro's Adriatic port of Bar, in the south, with the Serbian border town of Boljare, in the north, as part of longer Bar-Belgrade motorway project linking Montenegro with EU-defined Corridor X. Corridor X connects western Europe with the Greek Aegean port of Thessaloniki.

Under the Croatian offer, the Montenegrin government must participate in the project with 1.74 billion euro, or 63% of the proposed cost. The tie-in should certify it has raised 50% of the required project funding within three months of signing the deal and 100% within a six-month period.

If the Croatian consortium fails to fit into this timeframe, the agreement can be cancelled and the concession awarded to the second-ranked bidder. The Greek-Israeli consortium took the runner-up spot in the tender after offering to build the facility at a cost of 3.92 billion euro.

In September, Montenegrin media reported Konstruktor had given the Montenegrin government a guarantee of over 400 million euro, which was a must for the launch of construction works. The size of the guarantee covers only half of the estimated value of the first stretch of the motorway to be built, the 43.5-kilometre section linking Smokovac with Matesevo.

Later on, Konstruktor asked for an extension to the deadline to be able to find cheaper loans from international lenders.

($=0.6965 euro)