Finance Minister Alexander Damyanovich informed the public at the beginning of the regular government meeting that North Star sent a notice on termination of the land lease agreement for the construction of the hotel Ritz Carlton (Marriott) in Lustica, the construction of which was planned by the Kuwaiti ruling family.
“Considering aspects of the contract, we immediately created a team and in mid-August gave an answer, where we invited representatives and owners of North star to see what problems there are in a direct agreement, and as a result, try to find a solution in favor of national interests, tourism interests and investor interests” Damyanovich said.
The company, he added, called in early September to discuss the issue outside of Montenegro.
“An answer was given in which the owners of North Star offered to look at what the problems were and try to find a solution in favor of the interests of Montenegro,” the minister added.
Arrangements for the lease of state land in Lustica
A consortium of North Star and Equest Capital Limited Jersey paid just under four million euros to lease almost half a million square meters of public land in Lustica. The rent is for a period of 10 years, i.e. until August 26, 2023.
In September 2009, the government signed a long-term land lease agreement with the consortium with a commitment to build, develop and manage an exclusive tourist complex, which came into force in August 2013, when a protocol was signed on its legal force. The protocol has been signed, but the implementation of these investments has not yet begun. In August 2013, the first annex to the agreement was signed, which determined the investor's obligation to invest 141,8 million euros in the first phase of the project over the next five years. The second annex, which was proposed in 2017, reduces the cost of the first phase investment to 80 million, with a new term of five years, and stated that "the contracting parties have not fulfilled their obligations under the main contract." With the second application, the government and the municipality of Herceg Novi committed to provide infrastructure (electricity, water and transport) in the place where the complex will be built.
The obligation of the investor from the application is that the minimum investment obligation is 80 million euros for the first phase of the project and another 130 million after the minimum investment obligations are met, as well as to pay an advance rent of two million euros. The investor paid the rent for the first 10 years of the lease, that is, for the period until August 26, 2023, in accordance with the agreement, in the amount of EUR 3. In addition, he paid funds based on the contractual penalty due to the delay in issuing the performance bond in the amount of EUR 934. According to Annex II, the investor also paid an advance in two equal installments for a total of two million euros. This was a prerequisite for the return to the project company of the previously delivered performance bond in the amount of one million euros.
The government and the municipality of Herceg Novi, in the second annex to the contract, committed to provide the general infrastructure and connection to the project site in accordance with the spatial planning documentation and the expressed needs of the investor no later than the scheduled day. It was also noted that in case of any delay in the agreed deadlines, the implementation of the minimum investment obligations will be extended in proportion to the dynamics of infrastructure construction on site.
In order to implement the project, a coordination group was formed to fulfill the obligations stipulated in the second annex, which includes representatives of the Cabinet of the Prime Minister, the Ministries of Tourism and Finance, the municipalities of Herceg Novi and Tivat, the state enterprise for the management of marine resources of Montenegro, the power transmission system and power distribution of Montenegro (CGES, CEDIS) and Northstar.
