Construction of Montenegrin highway enters next stage

Construction of Montenegrin highway enters next stage


By Adnan Prekic – Podgorica

After months of negotiations, the Montenegrin Government and the China Exim Bank agreed on the terms of a loan contract to build a highway through Montenegro. The contract that will be signed tomorrow will need to be verified by the Assembly of Montenegro, after which the works are expected to begin.

The agreement on financing and construction of priority sections of the highway Bar-Boljari (Smokovac-Matesevo) between the Government and the Chinese “Exim” banks will be signed tomorrow at 12 am at the Chinese Embassy by the Ministers of Transport and Finance Ivan Brajovici Radoje Zugic with representatives of the Exim Bank. The value of the contract will be EUR 689 million, while the full construction cost of the section from Smokovac to Matesevo will cost EUR 809 million. With the signing of the contract, the Parliament of Montenegro will know the conditions for adopting the Law on the highway and thus begin construction of a large infrastructure project.

China’s Exim Bank approved a loan worth around EUR 687 million to Montenegro, in September, for the construction of the Bar-Boljare highway’s priority section Smokovac-Uvač-Mateševo. Exim Bank’s preferential loan is to provide 85% or the EUR 689 million of the amount, whereas the remaining 15% (EUR 120 million) has to be provided by Montenegro. The construction works on the priority section can be expected to start by the end of 2014.

In July 2013., the government of Montenegro selected the Chinese consortium: China Communications Construction Company, and the China Road and Bridge Corporation, as best bidders for the construction of the Bar-Boljare highway, that is, the priority section of the route. The offered price for the construction of the priority part of Montenegro’s greatest infrastructural project was EUR 809.58 million.

Montenegro is the only country in the region that does not have a single kilometer of highway. Construction of the highway after the restoration of Montenegro’s independence was designed as one of the most important national projects. The tender for the construction of the highway was announced in 2008 and in October 2009 the Prime Ministers of Montenegro, Serbia and Croatia have officially cut the ribbon for the construction of the highway. A section was supposed to be build by the croatian company Konstruktror, which however was unable to provide a bank guarantee for the completion of the project, which was the reason the whole deal fell through.

The following year, for the first time the Chineese appeared as a potential investor and the Montenegrin government from June 2012 to June 2013 has been negotiating with several chinese companies.

After a year of negotiations, the job to build the section Smokovac – Mateševo ​​was assigned to a consortium of chinese companies China Communications Construction Company, and the China Road and Bridge Corporation. The project will cost 809.5 million and its beginning only awaits the credit of the Chinese Exim Bank. This bank for the construction of the highway has offered the government a grace period of five years on a loan with an annual interest rate of 2 percent and a repayment period of 20 years. The construction of the entire 170 kilometers long highway is expected to take four years.

The highway from Bar to Boljari is 169.2 kilometers long. This will be one of the most expensive highways per km in Europe, due to the tunnels, bridges and viaducts that will make up over 40% of its total length. This highway construction is the greatest engineering construction project in Montenegro and one of the biggest projects being implemented in the European market. The route will require the construction of 42 tunnels, 92 bridges and viaducts. The average daily, or annual traffic on the existing road from Bar to the border with Serbia, in certain sections ranges from 5,100 to 8,300 vehicles with distinct seasonal annual intensity that reaches up to 20,000 vehicles.