MNE and BiH are preparing to better implement PPP projects

With a helping hand from Slovakia, Montenegro and Bosnia and Herzegovina seek ways to correctly implement PPP projects. 

While offering the opportunity to increase innovation and efficiency in the public sector infrastructure, public-private partnership projects allow governments to relax their budget and borrowing constraints, without an immediate one-time impact on the national debt. Advantages and risks of PPP projects were discussed by state representatives from Montenegro, Bosnia and Herzegovina, and Slovakia during a study visit of the Western Balkans countries to Slovakia.

The aim was to support Montenegro in strengthening the capacity of officials working on PPP projects, as the Law on Public-Private Partnership adopted by the Parliament in Montenegro in 2019 is quite a new act. It regulates the implementation of policies and projects based on PPP and was later followed by several other regulations.

Ms. Jelena Jovetić, Director General of the Directorate for Public Procurement Policy at Ministry of Finance of Montenegro, appreciates the willingness of Slovakia to share its know-how and experiences. “For the Ministry of Finance, it is of paramount importance to explore the projects of public-private partnership through the lens of Slovakia’s experiences. As a member of the European Union and a country with economic characteristics to some extent similar to Montenegro, Slovakia’s insights are particularly relevant. This especially relates to one of Slovakia’s most significant infrastructure projects, the construction of a highway, as well as projects of smaller fiscal magnitude within the municipal infrastructure of local governments. We express our gratitude to the Ministry of Finance of Slovakia and UNDP for the support in Montenegro’s reform efforts,” she said.

The support to Montenegro in its public finance management reform efforts has been provided since 2010 within the Public Finance for Development programme, and to Bosnia and Herzegovina since 2020. The study visit to Bratislava was one of the project activities.

Sharing knowledge from an experienced partner can increase the use of PPP

Among participants were representatives of the Ministry of Finance of Montenegro, Montenegrin Investments Agency and City of Podgorica, joined by the Ministry of Finance of the Republika Srpska (Bosnia and Herzegovina) and UNDP Montenegro as well as UNDP Bosnia and Herzegovina.

They learned about principal benefits of financial instruments compared to grant-based funding and other forms of financing and how those can be used for PPP and drew inspiration from legislative and institutional framework of the PPP projects in Slovakia. Slovak experts from the Ministry of Finance and the Ministry of Transport shared practical experience with implementing PPP projects. They presented successful projects as a model to follow, and less successful ones to learn lessons from.

A legal expert for Ružinov district of the city of Bratislava introduced steps that need to be taken for the PPP implementation at local self-government level. Finally, the visiting officials acquired knowledge on relations among the state, the concessionaire, and consortium of banks. It is private banks that the concessionaire depends on to prepare all structures needed to secure long-term financing for PPP projects.

The study visit to Slovakia was organized by UNDP and the Ministry of Finance of the Slovak Republic on 20-21 November 2023.