The water systems in Plav, Gusinje, and Petnjica currently lack the necessary operating licenses. Of the total water sourced from Montenegro’s waterworks, only 24 percent reached consumers in 2024, while a concerning 67 percent was lost in the distribution network. This is a marked deterioration compared to 2023, where losses were at 60 percent. Seven Montenegrin water utility companies, including those in Budva and Podgorica, are functioning at a loss. Additionally, only half of the consumers connected to the waterworks also have sewage services available. Shockingly, just 36 percent of wastewater from sewage is treated, with many companies lacking precise data on this issue. There is a surplus of staff in most waterworks while professional expertise is sorely lacking.

This information was highlighted in the Report on Regulated Utility Activities for 2024, submitted by the Regulatory Agency for Energy and Regulated Utility Activities (REGAGEN) to the State Parliament.

The report emphasizes that these water companies serve a critical public interest by supplying citizens with drinking water and managing wastewater collection and treatment, which should positively impact public health and environmental safeguards. Given their monopoly status, the Regulatory Agency sets water prices to ensure these companies have adequate revenue for their operations and the development of their water supply and sewage systems.

Cetinje loses 86 percent of its water

The Agency warns that a majority of these companies fail to meet their legal obligations regarding data submission, hindering comprehensive analyses. Notably, 12 water supply companies do not even measure the volume of water extracted from sources, making it impossible to ascertain loss figures.

Cetinje’s water supply company experiences the highest losses, providing only 16 percent of the water drawn from its source, while a staggering 86 percent is lost in the distribution system. Following this, Danilovgrad (80%), Bar (78%), Kotor (75%), Ulcinj and Pljevlja (73%), and Herceg Novi and Nikšić (71%) report significant losses. In Podgorica, 58% of the water sourced is lost, with Bijelo Polje (57%) and Budva (55%) also experiencing high wastage, while Tivat records at least 31%. Other municipalities lack this data.

Wastewater flows into the Morača River after only 46 percent treatment.

Only four companies—Nikšić, Podgorica, Žabljak, and Budva—have submitted data on sewage wastewater treatment, while incomplete data from joint companies in Kotor and Tivat and from Mojkovac remains a concern.

“Due to incomplete information from all stakeholders, the Agency cannot evaluate the advancements in municipal wastewater treatment or assess compliance with legal mandates related to this.” The Podgorica plant exhibits the lowest level of secondary treatment for municipal wastewater (46.36%), and the effluent quality does not meet the established legal standards. This indicates that the facility is outdated and incapable of fulfilling its intended role, warranting the urgent need for a new plant, especially as Podgorica generates the majority of wastewater,” the report notes.

The Podgorica wastewater facility is discharging untreated sewage into the Morača River near the “Crooked Bridge,” which eventually flows into Lake Skadar. The European Union has provided funding for the construction of a new facility to be located south of Podgorica, near the village of Botun, since 2016, yet construction has yet to start due to unresolved local issues.

Redundancy and a lack of technical staff

The utility sector in Montenegro faces numerous challenges impacting its functionality and efficiency. Substantial technical and commercial water losses are among the most pronounced issues. Furthermore, the sector is characterized by an excess of employees, coupled with a deficient personnel structure that lacks technical staff while having too many administrative roles. It is crucial to establish mechanisms for measuring performance to ensure ongoing improvements within the sector. Significant investments are necessary for the renewal of the existing network and the expansion of sewage services, as there is a clear disparity between access to water supply and sewage systems. The professionalization of all processes and removal of political influence are essential for enhancing the sector while delineating responsibilities and imposing appropriate sanctions for non-compliance with legal mandates,” as stated in the Regulatory Agency’s report.

A primary issue in the sector is the inconsistent application of the legal framework, which significantly hampers operational effectiveness.

“During 2024, five service providers failed to apply the regulated service prices consistently throughout the year. Decisions in this sector are often made without proper analysis and understanding of potential repercussions, while the inadequacy of regulatory mechanisms diminishes legal credibility and hampers regulatory processes, thereby slowing necessary reforms,” the report continues.

A new law is essential

Only by relying on accurate data and identifying shortcomings can a holistic amendment of the legal framework for utility services be formulated for improvement rather than mere criticism of the current state.

“The efforts by the Ministry of Ecology, Sustainable Development, and Northern Development to establish a new legal framework that began in late 2024 are promising. There is a clear need for a transparent, stable legal framework that ensures the sector’s sustainable development, protects user interests, and fosters efficient regulation, all while highlighting the Agency’s role as an independent and professional regulatory body,” the report asserts.

Three utility companies in Petnjica, Gusinje, and Plav are particularly noted for flagrant legal violations, as they provided citizens with drinking water without a valid license, failed to submit requests for service price approval for 2025 on time or at all, and neglected to provide operational data during 2024 or submitted it with considerable delays.

Elect professionals to lead companies, diminish political influence

The regulator asserts that professionalizing management within utility services is vital for enhancing efficiency and service quality, as well as for the overall stability and sustainability of the sector. They insist on establishing clear criteria for selecting members of municipal water supply and sewage company management.

“By defining professional and other benchmarks for management selection, a foundation will be laid for appointing competent individuals in key positions. This can curb political influence over management selections and foster a responsible, professional governance structure. One of the primary benefits of this professionalization is the enhancement of management integrity, as personnel chosen based on clear, meritocratic standards are accountable for strategic decisions and their long-term sustainability. In professionalized management environments, decisions will be rooted in professional assessments and strategic goals, free from political meddling. Such management will be better positioned to recognize and optimize business processes, thereby reducing unnecessary expenses and improving operational efficiency,” the report concludes.

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