Spajić: The Institute rescued by an €88 million investment, Government to take over children’s ward for school development

Prime Minister Milojko Spajić has declared that the Dr. Simo Milošević Institute has been salvaged, representing a pivotal moment for this rehabilitation facility, which was previously entangled in financial insolvency and the threat of privatization.

In a meeting today in Igalo with the Institute’s management and staff, Prime Minister Spajić emphasized the importance of the Shareholders’ Assembly’s decision to approve the Restructuring Plan, which entails an €88 million investment in the Institute by 2028.

The implementation of this plan initiates a new era in the growth of the Institute as a respected rehabilitation center, which will become a source of pride for its workforce, patients, the municipality, and the entire nation, stated Prime Minister Spajić.

He reflected on the difficult situation faced by the 44th Government when it took office, which included substantial debt, an unsustainable operational model, and neglected infrastructure.

Confronted with a challenging state aid scenario, we prioritized the well-being of our citizens and successfully addressed the Institute’s ongoing liquidity challenges. We raised the reimbursement rates for patients under the Health Insurance Fund from €4.5 million to €9 million annually. This has ensured sustainable liquidity and positive financial performance for the Institute, the Prime Minister explained.

Rather than heading towards insolvency or privatization, the Restructuring Plan assures the fulfillment of all financial obligations and investments for the second phase of development, reestablishing the Institute as a premier center for rehabilitation and health tourism, both within Montenegro and beyond.

Prime Minister Spajić expressed appreciation for the employees’ dedication, which played a crucial role in sustaining the Institute during its most trying times. He also acknowledged the creditors who recognized the Institute’s national significance and chose not to initiate bankruptcy procedures.

We have not overlooked the needs of the citizens of Herceg Novi. The Government will swiftly acquire the Institute’s Children’s ward to construct a new school, finally addressing a longstanding issue for the communities of Herceg Novi and Igalo, he concluded.

Together with minority shareholders, the Government plans to invest €88 million in the Institute by 2028, with €62 million earmarked for infrastructure enhancements.

Health Minister Vojislav Šimun called today a historic moment for the Institute.

It is especially rewarding to have developed a comprehensive plan to save the Institute. The effort of the 44th Government has been exceptional, and the Prime Minister’s leadership has been pivotal. Thanks to his initiative and determination, we have reached this long-anticipated milestone, Minister Šimun stated.

He noted that the Institute caters to approximately 5,000 patients each year through the Health Insurance Fund, including 500 children. He reaffirmed the Government’s commitment to preserving these vital healthcare services while also promoting the growth of health tourism.

We owe significant gratitude to the Institute’s employees, who have always believed that we could resolve a long-ignored problem, the Minister added.

The management of the Institute, along with union representatives and minority shareholders, concur that this is a landmark day for the Institute.

I hope this day will be remembered as a significant turning point for the Institute and as a stimulus for its future expansion. The unanimous endorsement of the Plan confirms that the Institute is on a promising path and will be a point of pride for both present and future generations, asserted Institute Director Zoran Kovačević, noting that the plan also enhances certain benefits for patients under the Health Insurance Fund.

Union President Biljana Ribar highlighted that employees had been eagerly awaiting the approval of this plan.

We awaited this decision with a mix of hope and uncertainty. Employees have faced tough working conditions for many years, but I believe this marks the dawn of a new era where we can all find satisfaction, Ribar declared.

One of the Institute’s main shareholders, Žarko Rakčević, expressed optimism that the Institute could fulfill Montenegro’s healthcare demands while also serving as a health tourism hub.

We must reinforce the Institute’s healthcare agenda and advance it while ensuring financial viability. These two aspects must coexist, transforming the Institute into a model for Montenegro and Europe. We need to reclaim our place in the Western European market. Despite past challenges with previous governments, we have established a foundation of trust and sincerely appreciate this administration’s proactive approach, Rakčević concluded.