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NewsMontenegro, Decisions on full or partial ownership of port capacities and their...

Montenegro, Decisions on full or partial ownership of port capacities and their consequences

The Montenegrin Government, through a series of decisions on the acquisition of full or partial ownership of the port facilities, expressed its clear intention to achieve only temporary ownership until tenders are announced and a new concessionaire is selected, the Digital Forensic Center (DFC) of the Atlantic Alliance announced.

DFC’s analysis showed that the Montenegrin Government’s moves, which recently made a series of decisions on acquiring full or partial ownership of port capacities, are indicative.

“By doing so, she expressed her clear intention that she only wants to achieve temporary ownership until the tender is announced and a new concessionaire is selected,” the analysis states.

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As it is added, after the Government purchased three quarters of the Port of Bar and ensured the possibility of making strategic decisions for the further development of that company, along with the announcement of the purchase of the second part of the port – Port of Adria, certain speculations were actualized that as new potential buyers or tenants on in the longer term, bidders whose interests are not compatible with the national and security interests of country may appear for this strategically important resource of Montenegro.

“A possible letter of intent from private investors could be accompanied by an expressed readiness for additional investments and incentives in the continental part of Montenegro, in order to increase the strength and receptivity of such an offer,” the analysis states.

According to publicly available information, in the past period Russia, Serbia, as well as Chinese multinational companies expressed interest in buying the Port of Bar.
“The crisis in Syria in 2011 forced Russia to look for an alternative solution for stationing its ships in the Mediterranean. It was of great importance for Russia to maintain a permanent presence in the Mediterranean in competition with NATO. In 2013, after a two-month delay by the Government of Montenegro with an answer, Moscow unsuccessfully requested from Montenegro, which was not a NATO member at the time, that the Russian fleet in the Mediterranean could use the ports of Bar and Kotor for stationing and servicing of military ships. Although since then Russia has significantly strengthened its presence in Montenegro through various spheres, primarily media and political, it is not realistic to expect that at this moment it could once again, even if not directly, be involved in the race for this important resource on the Adriatic coast, DFC said.

Also, as they added, it is not realistic that the Government of Montenegro could decide to do business with Russia or a company related to it at the moment of the Russian invasion of Ukraine.

Serbia, a key regional partner of China and Russia, is also interested in the purchase, but also in the joint development of the Port of Bar, which is continuously emphasized by high-ranking officials from Serbia. At the beginning of February, a meeting of the management of the Port of Bar was held with representatives of the Chinese company CCECC, as well as representatives of the company Elektrometal plus, which cooperates with the Chinese in Serbia”, the analysis states.

The DFC said that It is important to point out that the current ruling structure in Montenegro has close ties with the authorities in Belgrade, which can open the doors of the Port of Bar to Serbian investors.

“In this context, the initiative Open Balkans, which the 43rd Montenegrin Government insists on, is indicative, and which undoubtedly opens the door to a stronger influence of third parties, which could ensure their presence in the NATO member country within the framework of this regional initiative designed in Belgrade and Tirana . Serbia, as the most economically and politically influential country in the Western Balkans, has the potential to pull all other countries from the region towards other centers of power, especially bearing in mind the announced liberalization of trade relations between Serbia and China through the Free Trade Agreement, which even the European Union does not have with that country. Union, the United States of America,” the analysis states.
Chinese companies, it added, own or have stakes in a wide range of European critical infrastructure, including ports, airports, power plants, wind and solar farms, as well as telecommunications.

“Such type of control opens numerous risks, including the possibility of espionage, but also the use of ports as commercial hubs in Europe and favoring Chinese companies”, according to the DFC.

Due to the need of the Western Balkan countries for investments, Beijing, as stated, sees an opportunity to establish a foothold on the borders of the European Union, where their interests also lie. And while political elites in the Western Balkans perceive China’s presence as economic and mostly opportunistic, they do not see the strategic long-term implications of Chinese influence in the region.

“Beijing took advantage of the geopolitical vacuum in the Western Balkans region, which arose due to the redirection of the attention of Western partners, correctly assessing the opportunities for investment in strategically important sectors,” the analysis added.

In the Mediterranean, China is trying to achieve dominance in maritime traffic. Currently, China’s COSCO Shipping owns 64 percent of the Port of Piraeus. Also, COSCO Shipping included the Port of Durrës in its network in 2017, and there are indications that they want to include the Port of Ploče in their business plans. In 2018, the Port of Kopar officially joined the Chinese Belt and Road Initiative. That port is of crucial importance for the Austrian, Hungarian and Slovak markets.

“The potential takeover of the Port of Bar would allow China to have even greater influence not only in the Western Balkans region, but in the whole of Europe. In the past period, Montenegrin political leaders announced the deepening of cooperation between the Port of Bar and the Chinese,” said the DFC.

At the Cooperation Forum between China and Central and Southeastern Europe in Ningbo in 2019, former Montenegrin President Filip Vujanović said that the Port of Bar could be China’s port corridor on the Adriatic and increase trade between Europe and Asia.

In July 2021, a contract worth more than ten million EUR was signed between the Port of Bar and the company Zijin from Bor.

“Taking into account the evident interest, as well as the strategic importance of the Port of Bar, a logical question arises – whether in future activities related to the potential sale or concession of the largest port in Montenegro, which is a member of NATO, only commercial interests should decide”, it is said from DFC.

Full or partial Chinese ownership of critical infrastructure would, as they believe, significantly increase the exposure of Montenegro as an aspirant for EU membership to Chinese pressure to achieve broader geopolitical goals. Montenegro, as a country with access to the sea and the status of a candidate for EU membership, but with continuously weak and politicized institutions, represents an opportunity for China to position itself in another strategically important country.

“Given the fact that Montenegro has been a member of NATO since 2017, strategically important decision-makers in Montenegro should keep in mind the Strategic Concept of NATO, which in many ways reflects changes in the strategic environment, when implementing large-scale investment projects,” they believe.

China, which was not even mentioned in 2010, is described in the new Strategic Concept as a systemic challenge to Euro-Atlantic security, and its relations with Russia as a deepening of the strategic partnership that is also likely to threaten the Alliance.

“China’s ambitions and its policy of coercion are treated as a challenge to the interests, security and values of the North Atlantic region, with concerns about the deepening of the strategic partnership between China and Russia. The significant announcements contained in that document will certainly be very challenging for NATO member states, because they carry the risk of losing credibility in the event that they are not supported adequately, which is especially important in the case of Montenegro,” said the DFC.

As a new member of NATO with a relatively weak institutional capacity, Montenegro is strategically an ideal target for the expansion of Chinese influence in Europe. China’s geopolitical investments in major infrastructure facilities in Europe, such as roads, railways and ports, are viewed with caution by Western allies.

“Therefore, announcements about the possibility of cooperation between the Port of Bar and Chinese companies and investment in the continuation of the highway in Montenegro, as well as investments in railway infrastructure, should be taken into account and viewed through the prism of the national and security interests of the state and the Alliance, and not only through pure commercial interest”, concludes the analysis.

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