Two years following Milo Đukanović’s signing of a contract as the then Prime Minister for the tourist valorization project of the Tivat area on the Luštica peninsula, the state commenced expropriation payments via Prva Banka, where his brother is the principal owner.

This was revealed through the account statement obtained by Action for Social Justice (ASP) this month from the Ministry of Spatial Planning, Urbanism and State Property under the Free Access to Information Act. ASP considers the account statement significant if presented as such, according to their announcement.

ASP stated that it is investigating several tourism investment projects in Montenegro, among which “Luštica Development” is a prominent focus.

“The account statement indicates that payments began at the close of 2012 and continued through periodic transactions until the end of 2018, totaling approximately 3.8 million euros. ASP has requested detailed records of all expropriation payments related to the ‘Luštica Development’ in Tivat. Additionally, ASP has sought information regarding the process of opening an account at Prva Banka, including whether the conditions were the most favorable compared to other banks approached for similar purposes,” they detailed.

“The agreements for the recapitalization of ‘Luštica Development’ and the lease for the construction of a tourist resort on the Tivat section of the Luštica peninsula were signed at the end of 2009 by Milo Đukanović on behalf of the government, with the lease agreement coming into effect at the end of 2013,” ASP conveyed in a press release.

The organization noted that the majority of funding for the “Luštica Development” project in Tivat comes from Egyptian investors registered in Switzerland. Currently, according to records from the Central Depository Agency, Montenegro holds approximately 12 percent of the share capital in “Luštica Development”.

“The Tivat area of the Luštica peninsula was leased for a substantial period of 90 years, requiring the construction of a tourist resort. The foreign investor was also permitted to build and sell individual tourist units like apartments or villas. This represents a hybrid model of leasing and selling, which has led to several tourism projects along the coast and in the northern parts of the country, indicating that private interests have been prioritized over the public good,” asserted ASP.

In recent years, foreign investments have been ramping up their development of the tourist town on the Tivat side of Luštica. In 2020, the company “BB Solar,” which is officially half-owned by Milo Đukanović’s son, was involved in construction activities.

“The ‘BB Solar’ project, known as Luštica Bay, has been framed as one of the largest investment ventures in Southeast Europe. The company reported involvement in both high and low voltage electrical projects across multiple residential buildings, including lighting for the promenade, breakwater, marina, and lighthouse, although they did not disclose the financial details of the contracted works,” ASP stated.

Conversely, Podgorica’s ‘Bemax’, which frequently collaborates with Milo Đukanović’s son’s company, also participated in the Luštica Bay project, claiming the value of its contracted services amounts to 26 million euros,” ASP reported.

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