The director of the Regional Water Supply System, Goran Jevrić, warns about the idea of "Energoprojekt hidroinženjering" Consulting Engineers Co. Ltd that water should be pumped from ''Kaludjer oko'' and ''Crno oko'' springs, stating that "hasty decisions could do more harm than good"
Another confirmation from experts that the damage was caused by the deepening of the Morača riverbed, from which more than 100 thousand cubic meters of gravel were extracted
After several months of analysis, experts from “Energoprojekt hidroinženjering - Belgrade” concluded that the Bolje sestre water source was endangered by long-term uncontrolled extraction of sand and gravel from the Morača riverbed, which was reported by the Center for Investigative Journalism of Montenegro (CIN-CG) in mid-March.
Thus, the earlier claims of environmental activists, as well as the representatives of several state institutions, primarily the Regional Water Supply System (RWSS), which supplies coastal municipalities with water from local sources, were confirmed.
The director of the RWSS, Goran Jevrić, assures that, despite everything, the water supply to the coast will be in order.
"Of course, it should have in mind that there is a possibility of significant unforeseen disturbances in hydrological conditions, especially in the part related to the devastated bed of the Morača River," Jevrić told CIN-CG.
To mitigate this risk, the Regional Water Supply System, according to him, initiated investigative and test actions to provide the necessary quantities for certain technical interventions for this season as well.
Due to the drastic drop in yield of 80 percent, the director of the Water Administration (WA), Damir Gutić, suspended the works on the regulation of the Morača River in December.
The Minister of Ecology, Spatial Planning and Urbanism, Ratko Mitrović, said in the Parliament at the end of March that he visited the river with the locals of the village Grbavci and that they "noticed that gravel from Morača was being exploited at several locations, despite the current ban".
"It was noticed that the bed of the Morača River deepened more than five meters and widened several times in the part closest to the Bolje sestre water source," he told MPs.
The Ministry told CIN-CG that currently there is no permit or consent from WA that would allow entry into the riverbed and that any intrusion is "considered illegal".
According to the data previously obtained by CIN-CG, more than 100,000 cubic meters of gravel were previously extracted from the bed of the lower course of the Morača into Skadar Lake through concession works on flow regulation. The concessions were held by the company "Bemaks", and earlier by "Cijevna komerc" and "Beton gradnja".
According to CIN-CG's estimates, based on the data obtained from "Bemax", at least 52 thousand cubic meters were extracted from the riverbed.
"Cijevna" told CIN-CG that they extracted about 68,000 cubic meters, while "Beton Montenegro" did not answer the questions.
Speaking about the problem of illegal exploitation, the Ministry told CIN-CG that "in most cases, it is about the exploitation of materials from land that is out of the riverbed and which is not treated as a floodplain."
How to obtain 1,100 liters per second
Assessing that "return to the state before 2020 cannot be predicted, and probably not fully realized", "Energoprojekt hidroinženjering" experts in the analysis CIN-CG received under the Law on Free Access to Information for Regular Supply of the Montenegrin Coast suggested adding water from nearby springs to the existing spring, primarily spring ''Kaludjerovo oko'' and ''Crno oko''.
The director of the Regional Water Supply System told CIN-CG that the investigative work to select a source for public water supply requires comprehensive and serious research, and therefore significant time to make the right decision. He says that the legal regulations that need to be implemented through complex administrative procedures should not be neglected, because this issue is also of exceptional importance for health protection.
"This is precisely the reason why the study focused on seeking a short-term solution that would provide sufficient water for an orderly and sustainable water supply of the Montenegrin coast for two to three years… Hasty decisions on the subject could do more harm than good,” Jevric said.
The capacity of the water supply system is 1,100 liters per second, and the results of the analyzes conducted within this project indicate that the currently available water sources of the Bolje Sestre spring are at a minimum of 700-800 liters per second.
The analysis states that the source of the Bolje Sestre was not considered as an additional water source for several reasons, including the fact that there is a real possibility that abstracting the required quantities would affect the yield, possible loss of natural source, without gaining the required quantity.
The document states that the minimum yield of ''Kaluđerovo oko'' is not known, i.e. the maximum amount available for exploitation in the conditions of hydrological minimum. The advantages are the greater impact of groundwater and protection of water quality from the impact of ''Malo Blato'', and the disadvantage is that the transport of water is longer and more complex, with unpredictable problems of expropriation and use of private land.
The yield of ''Crno oko'' is also not known, and it will be difficult to determine it due to technical difficulties. The technical solution with the suction pump directly above the main source ensures the pumping of groundwater as a priority. The advantages are the unlimited amount of water for exploitation and the relatively short length of transport to the plant and the minor issues of expropriation. The disadvantages include probably higher costs of water intake and construction works due to field conditions, but also the uncertainty of water quality due to the impact of mixing with the water of ''Malo Blato'' source.
"Through a comparative analysis of the proposed sources for water supply, ''Crno oko'' has a small advantage primarily because it is relatively easy to provide the full required amount of water for water supply without additional interventions," it is stated in the analysis.
To find the optimal solution and balance between the required quantity and the best possible quality, two solutions of exploitation have been proposed. The first involves intake of the available quantities from ''Kaluđerovo oko'' source, provided they are proven, and ''Crno oko'' if required. The second solution envisages the exploitation of only ''Crno oko'', in addition to the existing quantities at the source of ''Bolje sestre''.
Morača riverbed "plowed"
According to the announcement of the Regional Water Supply System, the hydrogeological analysis of the yield of the spring, which was completed by "Energoprojekt hidrinženjering" last month and signed by the geological engineer Vladimir Beličević, was also presented to Minister Mitrović.
"This problem arose predominantly due to the exploitation of sand and gravel in the Morača riverbed. The basic condition for preserving the current quantities of water at the ''Bolje sestre'' spring is that there is no further deterioration of the terrain and the Morača riverbed due to new unforeseen works. Unfortunately, the effects of gravel exploitation in the Morača riverbed can be worsened in the coming years by the additional natural deepening of the riverbed as a result of increased speeds and disturbed riverbed profile," Belicevic told CIN-CG.
Therefore, in his opinion, it is necessary to take measures to rehabilitate the riverbed and return it as close as possible to the natural state, i.e. not lower than the elevation of 10 meters above sea level (masl). The analysis established that the Water Administration's recommendations on the excavation in the zone upstream from the mouth of the Cijevna in Morača were not followed.
Based on the request of the Regional Water Supply System, geodetic and bathymetric surveys were performed in November (using an echo sounder) on three sites upstream from the mouth of the Cijevna into the zones opposite the ''Bolje sestre'' spring. Based on these measurements, the lowest riverbed elevations are from 3.04-5.21 m above sea level, and the water levels in the Morača are from 7.35 to 8.61 masl.
According to the statement of the Regional Water Supply System, after the presentation of the analysis, the Minister said that the inspection and other competent bodies must "react urgently to stop these illegal activities because the water supply of the Montenegrin coast must not be endangered."
The Directorate for Inspection Affairs told CIN-CG that this year, two initiatives from the Regional Water Supply System for inspection supervision of the exploitation of river bed material from the Morača watercourse were received and that their inspectors made more than 40 field visits to the narrow sanitary protection zone.
"In the procedures of inspection supervision of the exploitation of river material, two criminal charges were filed with the Basic State Prosecutor's Office to determine the identity of the perpetrators of the theft of natural resources and one supplement to the criminal report. A decision was also issued banning the exploitation of river material on the control section ", the Directorate for Inspection Affairs stated, without identifying the perpetrators.
The drop in yield can be reflected to ''Plantaze'' as well
"Energoprojekt hidroinženjering" also states that the phenomenon of operation of a large number of irrigation wells, located in the zone of plantations in the valleys of the Morača and Cijevna, should be the subject of study in the coming period.
"The influences of these facilities on the work and yield of the ''Bolje sestre'' spring cannot be ruled out. However, the multi-year mode of operation of these wells is stable and takes place in the same annual period. It is mostly interrupted at the end of August after the main vegetative period for the grapevines ", it is stated in the finding.
The operation of these wells, as it is pointed out, is mostly predictable on an annual level and it is unlikely that there has been a drastic increase in their number, especially in the period during 2020, when the largest decline in spring yield was registered. This indicates that they "did not exert the main and decisive influence".
However, Jevrić told CIN-CG that the problem of reducing the yield of water balance will also affect other economic entities that use groundwater in the area of Podgorica for their economic activity, from "Plantaže" to agricultural producers and water supply companies.
"Plantaže", which consumes two million cubic meters of water from 24 pumping wells, from a depth of 50 to 90 meters, for irrigating 2,300 hectares under vineyards and orchards, told CIN-CG in March that they did not produce consequences, because every extracted liter returns to the soil.
Examine the impact of the highway – once it is built
Having in mind the planning documents that envisage the construction of the Bar-Boljare highway in the second protection zone of the ''Bolje sestre'' spring, according to the recommendation of "Energoprojekt hidroinženjering", it is necessary to propose to study possible impacts on the spring and defined protection zones.
This phase of the highway from Podgorica to the seaside is not in the current plans.
"In this process, it is necessary to envisage appropriate interventions and necessary measures to protect the source. The measures refer to the construction of water facilities for collection, drainage, and treatment of wastewater (main collectors, wastewater treatment plants) to provide the necessary protection of the source from the adverse effects of highway construction. During the design, the highest recorded water level of the spring must be taken into account, so that in the future the stability of the highway will not be disturbed and wastewater from its surface will not flow into the spring ", the finding warns.
Miloš RUDOVIĆ
An 80 percent drop in water source yields could have a direct impact on tourism. The regional water supply, which cost 107 million euros, in addition to climate change, is in danger due to the extraction of a huge amount of gravel and the deepening of the riverbed, experts claim.
The yield of the water spring Bolje sestre, which supplies water to six coastal municipalities for a decade and a half, has been reduced by more than 80 percent, from 2,660 liters per second in 2005 to a historical minimum of only 334 liters per second at the beginning of September last year. This is significantly below the projected water supply capacity of 1,100 liters and represents a serious threat to cause water shortage to the coast during the tourist season.
Due to the drastic drop in yield, the director of the Water Administration, Damir Gutic has suspended work on the regulation of the river Moraca, until the reasons for the shortage of piped water in households on the coast are determined.
The decision was made after years of warnings from the state-owned company Regional Water Supply System, based on expert analysis, that the spring was threatened by the extraction of huge amounts of sand and gravel from the riverbed and coastal area.
According to the data obtained by the Center for Investigative Journalism of Montenegro (CIN-CG), more than one hundred thousand cubic meters of gravel were extracted, through concession works of flow regulations, from the bed of the lower course of the Moraca into Skadar Lake. The concessions were granted to the company “Bemax“ to which the decision on suspension of works from December refers. These concessions were previously granted to “Cijevna Komerc“ and “Beton gradnja''.
Huge quantities of material from the riverbed and the agricultural land on the bank were also extracted by illegal exploiters, whom the inspections generally fail to locate.
The riverbed is deepened considerably below 10.5 meters above the sea level, which is considered the lowest allowed elevation, below which, according to the Regional Water Supply System, the impact on the movement of water leaves consequences on the springs.
The Regional Water Supply System, in which 107 million euros were invested, was put into operation in 2010 when Budva, Kotor, and Tivat were connected to it. A year later, Bar was connected and in 2012, Ulcinj. Since 2013, through the water supply system of Tivat, Herceg Novi received 40-50 liters per second for a part of the municipality, and last year works on the complete connection to the regional water supply have begun.
A long-standing issue of water shortage in coastal cities during the tourist season such as Budva and lasting restrictions in Herceg Novi, which was partly supplied from Croatia, have been regulated by the regional water supply system.
The consumption of 750 liters per second for several days during the peak season was recorded from this water supply system.
If we take into account a year when the water supply of the spring Bolje sestre was at its ten-year minimum (which was the case in 2020) and a year with a record water supply (at the level of 2019), the challenge of orderly supply of consumers on the Montenegrin coast would be realistic, " Goran Jevric, the director of Regional Water Supply Company (RWSC), told CIN-CG.
According to official data, Montenegro has recorded the best tourist season in history in 2019, with more than 2.6 million tourists, more than 14.5 million overnight stays, and 1.1 billion euros in revenue. More than nine million cubic meters of water were delivered to coastal municipalities that year – somewhere near 5.7 million cubic meters from June to September alone.
However, Jevric rejects the worst-case scenario, according to which the delivery of technical water to coastal cities is the only option. RWSC has contracts with the local water supply systems on the minimum quantity that it has to deliver, and they are additionally supplied from local sources, he says.
The measured yield, as explained in the RWSC, represents the flow values at the overflow, and it is possible to capture larger quantities.
"In the period when, for example, the flow at the overflow was only 334 l / s (September 5, 2020), there was a continuous supply of water to municipalities on the Montenegrin coast of 680 l / s (by lowering the water level in the water intake, it is possible to capture the even higher amount of water than the stated 680 l / s)“ RWSC stated.
The representative of the Institute of Hydrometeorology and Seismology Golub Culafic, who analyzed this problem for the needs of RWSC in 2016 and 2018, warned a few years ago about the negative trends of declining yields. According to him, it is necessary to take actions to protect springs, but also "to find a possible additional source as an alternative for the summer months, when consumption is at its peak and recharge in the basin is minimal."
Culafic also pointed out the consequences of climate change, stating that the recharge of karst (limestone) springs, such as Bolje sestre, directly depends on the amount of precipitation, and that projections say that temperatures will rise and precipitation will be less and less. He also emphasized the consequences of the illegal exploitation of sand and gravel on this water source, which has been on the UNESCO map of the 150 most important karst sources since 2017.
"Special attention should be paid to the institutional ban on the exploitation of sand and gravel from the mentioned zone, as well as to provide guidelines for arranging the existing exploitation pits, to prevent artificial alteration of the Moraca in this part, and the possible opening of new sinkholes in limestone.", Culafic concluded.
Warnings from RWSC on endangering springs, according to the documents CIN-CG had access to, were submitted to the previous Government in reports on the work and plans of the company, which were regularly adopted.
Taking into account the drastic drop in the yield of Bolje sestre spring of about 30 percent in 2020 alone, the regularity of water supply during the 2021 tourist season cannot be guaranteed with certainty.", the President of the Board of Directors of RWSC, Budimir Saranovic, warned former Deputy Prime Minister and Minister of Agriculture Milutin Simovic, in September last year.
At the session of the Board of Directors held on September 29 last year, the director of the Institute of Hydrometeorology and Seismology, Luka Mitrovic, stated that illegal exploitation around the spring mostly affects the decline in yield, and that, in addition, the displacement of the Moraca riverbed is another cause of such situation.
Dozens of reports submitted by the RWSC to the Sector for Water Management Inspection - Directorate for Inspection Affairs (DIA), in recent years, due to the exploitation of gravel, were mostly without major results. The employees who have been reporting them also faced threats while recording the actual situation on the ground, they say in this company.
CIN-CG had insight into more than 20 RWSC requests for inspections, addressed to the DIA from 2016 to the end of last year.
For example, in a request dated July 25, 2017, Jevric states that "illegal exploitation seems to be 'gaining momentum' again, regardless of the moratorium."
“In the previous days, construction machinery was noticed at the Mahala locality. Therefore, we forward to you the photographs from the spot with the request for inspection control… ”.
In July 2019, the Board of Directors of RWSC stated that the best evidence of this organized activity is the fact that all machinery is being removed by the arrival of the competent authorities on the spot, and in the late afternoon and evening exploitation continues, as well as during rainy days and holidays, when the activities of inspection bodies are not expected.
“These activities directly affect the Moraca riverbed and legally defined elevations, which should not be lower than 10.5 meters above sea level, while field data indicate that the actual elevations are significantly lower, which indicates a high degree of endangerment of the Bolje sestre spring,“ it is stated in the minutes from the meeting of the Board of Directors on July 31, 2019. Other documents state that the elevations of the bottom of the river are lower from two to four meters.
From the Water Administration, they told CIN-CG that it can be said that illegal exploitation from the Moraca riverbed has been significantly lowered and reduced to a minimum. However, the problem of extracting materials from agricultural and non-agricultural land outside the river remains, somewhere even on a kilometer from the river.
Since 2016, according to the DIA, the Water Management Inspection has issued several misdemeanor warrants and filed multiple misdemeanor charges against perpetrators. They point out that one criminal complaint was filed against unidentified persons.
In one of the reports, which was submitted by the water inspector to RWSC on October 5, 2018, it is pointed out that during the inspection in the place called Botun, a yellow-blue ''Gisslens" loader (backhoe) without registration marks and a yellow-blue cargo motor vehicle, brand FAP, without registration marks and mounted sieve, were found. At the moment of the inspection, sand from the Moraca riverbed was being sifted.
“Person S.A. was found on the spot, according to whose statement he is the very owner of the machinery. During the on-site inspection, it was determined that it was illegal exploitation of gravel and sand ", it is stated in the report. Against S.A. a request for misdemeanor proceedings was filed, and the machinery was removed in the presence of an inspector.
The DIA, however, points out that a large number of RWSC initiatives were related to the mechanization of contractors, who had signed contracts with the Water Administration on works on the regulation of Moraca, which is performed by "Bemax".
RWSC Technical Director Ivan Spadijer, at a group meeting with WA representatives on the protection of the Bolje sestre water source a year and a half ago, said that it was not just about climate changes, and "this is supported by the fact that this problem has not been recorded in other springs in Montenegro". Spadijer also said that they had been protesting since 2014 because of the works on the regulation of the Moraca River because even then they thought that those works could have a negative impact.
Several members of the Board of Directors of RWSC, at several sessions in 2017, whose records CIN-CG had access to, expressed doubts about the correctness of the river regulation project and pointed out that during the earlier implementation of regulation, the groundwater level lowered about two meters.
A round table on the water source was held in January 2019, which was attended by the directors of RWSC and WA. One of the conclusions of the experts was that the works on the regulation of the river Moraca must be stopped until the moment when it is finally determined whether the exploitation of materials from the riverbed - legal or illegal - affects the yield of the spring.
At the meeting with representatives of RWSC in September of the same year, the director of WA said that if "the main problem of the functioning of RWSC and the yield of the spring Bolje sestre depends on the regulation project, then the problem is easily solved."
However, he decided to temporarily suspend the regulation work a year and three months later, which was preceded by exchanges of accusations with representatives of the RWSC on responsibility for the situation.
To the dissatisfaction with the cooperation with WA, about which Jevric and Saranovic informed Milutin Simovic in October last year, Gutic responded by assessing that RWSC did not deal with the causes, but only with the consequences of the reduction in yield. He described it as "an attempt to divert attention from its (RWSC) obligations to other institutions" as frivolous.
Executive director of the NGO “Green Home“ Natasa Kovacevic told CIN-CG that WA did not research the capacity and quality of water from the Bolje sestre spring, nor it had determined the specific impact of the regulation of the Moraca, or the illegal exploitation of gravel and sand from the riverbed, as well as from agricultural land.
She pointed out that the picture of the devastated lower course of the Moraca in the second and third protection zones of the water source can hardly be subsumed in the major part under the climatic influence.
"But it is understandable that for those who earn money at the expense of gravel exploitation and on the other side at the expense of water exploitation, such a justification can suit" ... The regulations are violated by both the concessionaires and the competent institutions, noticeably in front of the lay and professional public, achieving incomes, while neglecting the aspects of water safety and water protection, as well as the environment," Kovacevic said.
Gutic's decision stopped the works on the project of regulating the Moraca on section three, from the mouth of the river Sitnica to Ponari, which was performed by “Bemax“ and supervised by the “System-MNE“ of Podgorica.
"The reason for the temporary suspension of regulation is precisely the possible threat to the water supply of the Montenegrin coast, although the impact of watercourses and regulatory works on the abundance of water sources has not been proven by not classifying the third zone of sanitary protection,” he told CIN-CG.
Gutic said that the situation on the Moraca is further aggravated by the exploitation of materials from land that is treated as agricultural.
"Events that are not completely under control lead to the fact that the execution of the project is not happening at the dynamics we would like, but there were no deviations from the project solution," he said.
“Bemax“ told CIN-CG that from 2015 to 2019, they paid 156,780 euros to the Water Administration and that they paid 2.5-3.0 euros for a cubic meter of extracted material. That means that they extracted at least 52 thousand cubic meters from the riverbed. When asked if they had any reports and warnings concerning the deepening of the riverbed, they said that there were “no objections to the work“.
WA previously had agreements on the regulation of other sections of the river with “Cijevna Komerc“ and “Beton Montenegro“. The amount of the fee for the purchase of surplus materials, as the Administration previously stated for CIN-CG, was 2.75 euros per cubic meter for Cijevna, and 2.76 euros for Beton Montenegro.
The company "Cijevna Komerc" has signed a contract on the regulation of the Moraca riverbed on a section of 3,267 meters, downstream from the Vukovacki Bridge and 70% of the works have been completed.
''They were stopped in 2018 due to the inconsistency of the new project documentation with the actual situation on the ground, and the second part disputed the execution due to unresolved property-legal relations,” the company “Cijevna Komerc“ told CIN-CG. They claim that they were extracting raw material for further processing through regulation and that they paid 187,606 euros.
"Accordingly, the amount of extracted material is approximately 68,000 cubic meters," it is stated in response to a question from CIN-CG.
Company "Beton Montenegro" did not answer CIN-CG's questions.
General Director of Directorate for Water Management, Ministry of Agriculture, Forestry and Water Management, Momcilo Blagojevic, agreed that climate change cannot be the cause of a large drop in springs, but said that "concrete impacts must be professionally proven."
"... which has had to be done so far by the source administrator, taking into account the linear decline in the yield of the source from 2005 until today, which has been measured and validated by the Institute," Blagojevic stated. According to Blagojevic, the allegations in the "Vision of development 2030" of RWSC that the impact of the temperature change led to a decrease in the yield of the spring are not relevant, because "... the annual precipitation trend has remained almost unchanged."
At the beginning of this year, two projects have begun, one financed by the European Bank for Reconstruction and Development, which will try to determine the causes on a scientific basis, but also to propose measures to protect springs and increase capacity. The finding is expected by the beginning of June.
Culafic: The locals had to deepen the wells
“We assume that one of the influences on the reduction of the yield regime of the Bolje sestre water source is anthropogenic, i.e. man by his doing. This primarily refers, in this case, to the extraction of gravel and sand (‘regulation’) from the Moraca in the Grbavci zone, which may have led to accelerated water movement (declining levels and/or width of the flow) and reduced recharge of coastal alluvial aquifer, with which the source is probably partly connected“, Golub Culafic told CIN-CG, referring to the results of the latest analysis also, which was recently completed by an international team of experts, of which he was a member.
The analysis states that it is necessary to take measures and activities to adapt to modern climate processes, but also the impact of human activities.
If the clay layer, which was a return barrier for karst water aquifers, was removed by the deepening of the Moraca riverbed, theoretically it could have intersected the underground streams and enabled the outflow of karst waters along the Moraca riverbed, and further reduced the yield of the spring. The smallest depth to the karst aquifer is in the areas where Moraca approaches the limestone rim of the plain, and this is the case in three places: downstream from village Lekici, downstream from Grbavci (slopes of the hill Jez), and upstream from Gornji Vukovici (slopes of the hill Orlovina). At all three locations, the flow was being regulated, or the gravel was being exploited, " Culafic said.
As he said, the residents of the village of Grbavci, who had to deepen the wells on their properties, also testify that the level of groundwater in this area has decreased.
As possible causes of fluctuations and declining yields, especially in the summer months, Culafic also included the use of groundwater from the Zeta plain, pointing out that the largest user is the winery "Plantaze" for irrigation of their agricultural areas. Part of Podgorica is supplied with water from Cemovsko polje and the number of rural households that use groundwater for irrigation is growing.
From the company "Plantaze", which consumes two million cubic meters of water from 24 pumping wells, from a depth of 50 to 90 meters for irrigation of 2,300 hectares of vineyards and orchards, and regarding earlier similar claims from RWSC, they told CIN-CG that they do not produce consequences, because every liter extracted is returned to the ground.
Pointing out that the explanations from the new analysis are based on numerous assumptions, Culafic estimates that hydrogeological and hydrological research is necessary, which will be conducted in the next period in the narrower and wider zone of the water source.
A factory is also planned
The Regional Water Supply System Company also plans to build a water factory, and director Goran Jevric claims that the drop in yield will not jeopardize the project.
"The production capacity of the planned factory of bottled water at the Bolje sestre spring is 1-5 liters per second, so this project cannot be endangered by the decline in the yield of the spring," he told CIN-CG.
Regarding the project of building a factory for bottling water and producing beer and cold teas, the RWSC document "Vision of Development 2030" states that the preconditions for its implementation are "realistic, while it is necessary to complete the procedure in the Parliament of Montenegro, which should adopt planning assumptions for the area of Skadar Lake so that the RWSSC would be able to obtain urban and technical conditions for the start of construction of the water factory ".
The regional water supply system has prepared a conceptual project, as well as a study on the environmental impact assessment, which, as the RWSSC claims, created the preconditions for a potential investor to start an investment of several million euros.
Miloš RUDOVIĆ
Millions of household batteries, instead of being exported and recycled, end up in the trash. "When alkaline batteries are disposed of in a waste container with ordinary, municipal waste, the entire content becomes hazardous. This increases both the risk of pollution and the cost of waste management ", biologist Vuk Iković warns
Michael Bader moved to Montenegro from Germany 14 years ago. He rents the apartments in Utjeha Bay, between Bar and Ulcinj. He was the first out of 12 people from Montenegro to be awarded the Ecolabel certification from the European Union (EU) in 2012 for meeting high environmental standards.
Bader noticed that the guests were throwing away a large number of used batteries, so, since it was hazardous waste and guided by experience from Germany, he asked the Utility Company in Bar where they should be brought. They told him that they did not have the conditions for the disposal of used batteries.
"As there is no system for disposing and recycling batteries, I made a box for its disposal. Neighbors are also used to it, so instead of throwing them away, they leave the batteries with me ", Bader says in an interview for the Center for Investigative Journalism of Montenegro (CIN-CG) and Monitor.
Several times a year he carried batteries to Germany.
"In Germany, in every city, there is a recycling center for hazardous waste - tires, computers, batteries, white goods... Such waste is collected free of charge there. A system has been set up to pick up used batteries in stores,” Bader says.
Eight years later, to Bader's repeated question, CIN-CG/Monitor received a similar answer from the Utility Company in Bar: "In the Waste Catalogue Ordinance - accumulators and waste batteries are classified as hazardous waste and since we are not registered to perform such types of activities, we do not have conditions for disposing and further treatment ”.
Although about 50 tons of batteries are imported and used in Montenegro annually, only a few hundred kilograms are returned abroad through authorized companies for recycling or safe disposal.
Most of it ends up in municipal waste, which poses a huge risk to the environment and human health. Distributors and sellers, despite the legal obligation transposed from the European Union, generally do not take back used batteries in places where new ones are procured, while only a few recycling centers do that - the research of CIN-CG/Monitor showed.
In domestic legislation, as well as in the EU legislation, batteries are treated as hazardous waste. They can contain dangerous substances - lead, cadmium and mercury. Heavy metals have far-reaching negative effects on the environment and human health. In the process of decomposition and decay, heavy metals go into the ground, but also groundwater, and then into the food chain. On the other hand, if they burn, heavy metals reach the air in the form of small particles, and further back into the soil and water.
Batteries, accumulators, soot, waste from paints, varnishes and glues, motor oils, pesticides…, are some of the hazardous wastes with which we are often in contact, biologist Vuk Iković, from the Organization KOD, reminds.
"Waste management is not organized in Montenegro. Thus, hazardous waste is often mixed with non-hazardous waste. When alkaline batteries or engine oil packaging are disposed of in a container with ordinary, municipal waste, the entire contents of that container become hazardous. This increases the risk of pollution and increases the cost of waste management,” Ikovic told CIN-CG/Monitor.
He reminds us that fines for mixing waste and improper disposal range from 1,000 to 40,000 euros. The Environmental Inspection, however, does not have precise data on the fines imposed, which, judging by the answers to CIN-CG/Monitor questions, mainly related to the illegal collection and handling of batteries for motor vehicles and other purposes.
"According to the Law on Waste Management, the Environmental Inspection initiates misdemeanor proceedings. In the previous period, there were misdemeanor proceedings that related, among other types of waste, to illegal management of waste batteries-accumulators (collection without a permit, handing over waste to an unauthorized collector, improper storage at the collection site, etc.), but records are not kept in a way that the number of procedures could be singed out, especially by type of waste ", Veselinka Zarubica, Chief Environmental Inspector of the Department for Environmental Inspection of the Administration for Inspection Affairs, said for CIN-CG/Monitor.
During 2018 and 2019, according to the data of the Customs Administration (CA), more than 1.3 million primary batteries were imported. The difference between primary and secondary batteries is that secondary batteries can be recharged, while primary ones have a significantly shorter shelf life. Data obtained by the Statistical Office of Montenegro Monstat somewhat differ from the CA and show that in 2018, more than 700,000 primary batteries were imported, in 2019 875 thousand, and from January to November last year 716 thousand. Batteries for motor vehicles and other purposes are imported significantly more: 4.7 million in 2018, 4.4 million in 2019, and 3.5 million from January to November last year.
It is certain that some of the batteries intended for the household arrive outside the customs procedure and are sold outside the official flows at markets and flea markets. Monstat does not have data or an estimate of how many disposable batteries a household consumes per year, as well as the number of batteries and accumulators that end up in the waste, they told CIN-CG/Monitor. That is why only comparison based on data from the region is possible. According to the statistical data published by Balkan Green Energy News, an online platform specialized in the topics of sustainable development and ecology, a four-member household in Serbia consumes 20 batteries a year.
In Montenegro, with almost 200,000 households, this could mean that about four million batteries containing hazardous substances end up in waste every year or about 50 tons.
Vasilije Seferović, executive director of Utility Company in Herceg Novi, stated for CIN-CG/Monitor that they collect about 330 kilograms of batteries a year. But, as they specify, these are only batteries that the company uses in the process of work. Batteries aren’t selected from the total amount of waste that is collected, since the company isn’t registered for that.
The data of the Waste Management Department of Utility Company in Podgorica also show that the awareness of hazardous waste disposal is not sufficiently developed. From January to the end of October last year, only 62 kilograms of batteries were disposed of in the six recycling yards they manage.
"They are temporarily stored in recycling yards, in containers that are specially intended for these types of waste. After filling the capacity, they are handed over to companies that have a license to manage this type of waste, from the relevant ministries", Podgorica's Utility Company stated for CIN-CG/Monitor.
Company for sanitary and environmental protection which collects hazardous waste ''Hemosan'' Ltd. Bar, says that in 2020, 291 kilograms of batteries were taken over. They are temporarily stored and then exported to EU countries.
"In 2019, we launched a campaign on collecting used batteries with the trade chain Idea and the Faculty of Business Economics and Law (from Bar), while last year our partner was the distributor S plus," Zoran Nikitović, the director of Hemosan, said.
Hemosan cannot state the exact export price, since the batteries were shipped with other hazardous waste. However, they estimate that 15 tons of batteries could be collected at the level of Montenegro, and exports would cost up to 20,000 euros.
"In Austria, batteries are destroyed, while in Germany they are recycled," Nikitović says.
Several hundred thousand tons of industrial and portable batteries reach the EU market every year - approximately 800 thousand tons of automobile, 190 thousand tons of industrial and 160 thousand tons of consumer batteries.
In case of the absence of a sustainable recycling end market, or if a detailed environmental, agricultural and social impact assessment finds that recycling is not the best solution, EU countries may dispose of waste portable batteries containing cadmium, mercury, or lead in landfills or underground warehouses.
Management of this type of waste in Montenegro is regulated by the Law on Waste Management.
"According to the law, waste batteries and accumulators, which, by the waste catalog, are not municipal waste, are handed over to a company or entrepreneur who performs the activity of collection, processing or disposing of special types of waste. Waste batteries and accumulators that make up municipal waste are handed over to places intended for this type of waste within the separate collection of municipal waste, or to places intended for the collection of these types of waste at distributors", Veselinka Zarubica, Chief Environmental Inspector, explains.
According to Zarubica, in practice, only the collection of waste accumulators works.
"Most accumulators are returned for recycling through the purchase of secondary raw materials. Also, a significant amount of waste accumulators is collected through the shares of accumulator’s distributors who give a certain discount when buying a new accumulator if the old one is returned ", the Chief Environmental Inspector points out.
The fact that the used accumulators are handed over to the seller, whereby a discount is obtained for the new one, is also a good example of recycling, Seferovic considers.
Zarubica confirms that the collection of batteries used in electrical and electronic devices has not improved significantly.
"The reason is primarily that this type of waste is generated in small quantities that are of interest for collectors of secondary raw materials. Certain quantities are collected through a system for selective waste collection set up by some companies."
According to the data from the website of the Environmental Protection Agency, for the time being, only Hemosan has received a permit for the export of hazardous waste this year. During the last year, in addition to this company, the following companies: Valgo Montenegro (a company specialized in the export of land and stone containing dangerous substances), Matej - Cetinje (specialized for waste mineral oils), and SS Alga Nikšić (specialized for waste lead batteries filled with acid) had permits as well.
"During the last year, permits were issued for the export of 3,000 tons of accumulators and batteries," Bojan Basanovic from the Environmental Protection Agency told CIN-CG/Monitor. Most often, waste accumulators are exported to Austria, Slovenia, Serbia, Bulgaria, and the Czech Republic. According to the current classification, the Agency does not have data on how much it refers to household batteries.
The Agency notes that there is no official company in Montenegro that deals with the processing (treatment) of batteries and lead batteries. Hemosan explains that the recycling process involves a physical process of treating used batteries and usually consists of "sorting, magnetic separation, disassembly and grinding (crushing)". Metal residues can be processed by various processes, pyrometallurgical or hydrometallurgical. The products of these processes are metal alloys or solutions containing metal ions.
In the National Strategy for Transposition Implementation and Enforcement of the EU Acquis on Environment and Climate Change 2016-2020, it is pointed out that "basic principles of waste management that EU waste management is based on, even though integrated into the National Waste Management Strategy and National Plan for Waste Management, are still not fully applied in the system of waste management in Montenegro".
This document states that the requirements set out in Directive 93/86/EEC (batteries labeling) have not been transposed into the legal system of Montenegro, while they have been partly transposed by Directive 2006/66/EC (batteries and accumulators).
The most important objective of the 2006 Directive is that "The Member States shall, having regard to the environmental impact of transport, take necessary measures to maximize the separate collection of waste batteries and accumulators and to minimize the disposal of batteries and accumulators as mixed municipal waste as to achieve a high level of recycling for all waste batteries and accumulators”. The minimum collection rates to be achieved by the Member States were also prescribed: 25 percent by September 26, 2012, 45 percent by 2016.
Montenegro has practically not even started yet. The data published in December last year by the Ministry of Sustainable Development and Tourism in the National Implementation Plan of the Minimata Convention on Mercury for the period 2021-2025 also show that immediate action should be taken. It states that the main source of mercury discharge is illegal disposal of municipal waste (940 kg of mercury per year) and waste disposal (692 kg of mercury per year).
According to the Regulation on the manner and procedure for the establishment of the system of taking, collecting, and treatment of waste deriving from batteries and accumulators and on the system functions from June 2012, distributors have numerous obligations that they do not respect. At the point of sale, they should collect waste portable batteries and accumulators free of charge, regardless of their origin and without conditioning the purchase of a new portable battery or accumulator. Containers for separate collection and temporary storage of collected waste portable batteries and accumulators should be placed and visibly marked.
"The Law on Waste Management stipulates the obligation for importers/producers to establish a joint system for collection and storage of used products and packaging. Unfortunately, these systems are not organized ", Zarubica says.
"We have no clue about that," workers at the Idea supermarket in Podgorica wondered when we asked them if we could leave used batteries there. At the Voli supermarket, they said we had to talk to the management, who referred us to their Board of Directors. Answers to CIN-CG/Monitor questions remained unanswered.
Over the past year, research by the large Swedish company IKEA has shown that if batteries are not properly destroyed, they have an immeasurable and long-term impact on the environment due to their content. It was decided to remove all alkaline batteries from use and sale by October 2021 and replace them with rechargeable ones, which are significantly less harmful to the environment.
Bader also takes fewer batteries to Germany: “I replaced everything with rechargeable batteries in the house and apartments. It was quite an investment, but it pays off over time. That's the way of protecting nature and health as well. "
Free of charge collection of used batteries in Croatia
The Regulation in Serbia also stipulates that used batteries and accumulators are taken over from the end-user in the sales facility, and then the trader hands them over to the collector or someone else who performs storage and treatment.
"You should know that for batteries as major pollutants, the state has prescribed an environmental tax that is included in the price of new batteries, so that every time you buy new batteries, part of the price you paid for those batteries is intended for collection, disposal and recycling", it is stated on the website that sells batteries online.
Collection campaigns are organized in some consumer stores, and some local governments do the same from time to time. The widest network for collecting used batteries is organized by the company Delhaize, and batteries can be handed over in more than 70 Maxi and Tempo supermarkets throughout Serbia. Last year alone, 1.4 tons were collected.
In Croatia, a directive is in force that prohibits the placing on the market of certain batteries or accumulators with a mercury or cadmium content above the fixed threshold. The goal is to reduce the number of hazardous substances that end up in nature. In Croatia, there are several possibilities for citizens to get rid of used batteries. They can bring them themselves to recycling yards, i.e. to specialized places of authorized collectors (shops, services, shopping centers…). Free collection is enabled, after calling a toll-free number, sending a message or an e-mail, or entering an order on the website of authorized waste collectors.
Battery acid is dangerous for the skin and eyes
In the case of battery leakage, take precautions to ensure that battery acid does not come into contact with skin or eyes. Otherwise, you will have to ask for medical help, the website from Serbia for the online sale of batteries warns. Batteries, as it is stated, contain various chemicals, some of which can be aggressive or dangerous to health.
Keep batteries out of children’s reach, thus eliminating the danger of swallowing them and poisoning. Do not dispose of it in the fire. Doing so may generate toxic gases and vapors during combustion. Do not charge non-rechargeable batteries. Do not open or disassemble, some of the substances inside (e.g. lithium) can be explosive in contact with air”, it is stated in the warning.
When asked what to do with used batteries, this site recommends not to throw them with other waste, because they contain heavy metals that can greatly pollute the soil and water, and afterward end up in food and endanger health.
"Take used batteries, regardless of their type or purpose, to one of the specialized stores. The majority of such stores have the authority to collect used batteries and hand them over to recycling centers."
Predrag NIKOLIĆ
Andrea JELIĆ
The transmission lines pass through the strictly protected area of Durmitor and Emerald areas of Lovćen and the rivers Komarnica, Tara, and Ćehotina. The project worth 106 million is also questionable economically after the Italians halved the submarine cable
The 400-kilovolt transmission line, which should link the south with the north of Montenegro, as a continuation of the undersea power interconnector of the Italian company TERNA, will irreversibly endanger nature in the Lovćen and Durmitor national parks and cause significant damage to the rivers of Komarnica, Tara and Ćehotina.
Despite warnings that the transmission line could go another route or underground through the parks, the authorities did not care enough about the environmental damage, but opted for the shortest alternative, in order to save 16 million euros. Thus, parts of national parks will be cut off, plant and animal species endangered, and the landscapes due to which these areas have been inscribed on the UNESCO list destroyed.
The Environmental Impact Assessment Study for the Čevo - Pljevlja corridor, conducted by “Liming project” bureau owned by Željko Asanović, states that forest habitats will suffer more damage due to fragmentation along the entire route, while non-forest habitats where transmission lines are installed will be irretrievably destroyed. The study specifies that, in addition to the territory of the Durmitor National Park, the transmission line route will have a direct impact on two Emerald sites - Komarnica and Ćehotina.
"The construction of the transmission line will destroy smaller areas of NATURA 2000 habitats in the Komarnica canyon, Sinjajevina, and the Ćehotina valley. There are no rare habitats among them in Montenegro,” it is stated in the study, which the Center for Investigative Journalism of Montenegro (CIN-CG) received from the Environmental Protection Agency. Apart from the canyons of the Komarnica and Tara, as it is pointed out, transmission lines pose a special threat to birds of prey through collision with electric vires during the capture of prey. However, the authors of the study believe that, given the narrow space of the route, "the survival of any species will not be called into question."
Emerald is an ecological network made up of areas of special conversation interest. It operates in parallel with the Natura 2000 program in the European Union.
Energy experts are also questioning the economic viability of this transmission line and the investment of 106 million euros, because the submarine cable was ceremoniously put into operation on November 15 last year, only half of the announced capacity, 600 instead of 1,200 megawatts. That is why the transmission of electricity is performed without any problems by the existing network of transmission lines.
Savings was the main goal for the creditors as well. A document from the European Bank for Reconstruction and Development (EBRD), which provided a 60 million euro worth loan to the Montenegrin Electrical Transmission System (MNE: CGES) for the 106 million euro worth project, points out that one corridor solution avoiding both national parks was analyzed in the Environmental and Social Impact Assessment (ESIA) in which the Center for Investigative Journalism of Montenegro (CIN-CG) had an insight to.
"This corridor would be over 200 km long compared to the proposed 152.5 km corridor, and longer for about 50 km . This would raise costs by about 16,000,000 EUR, or about 27 percent. This alternative was not considered economically feasible," it is stated in the document.
Economic savings and a shorter route means the transmission line to pass 11 kilometers through the Lovćen National Park and another three kilometers through the Durmitor National Park.
The EBRD's website states that they consulted several environmental NGOs to assist CGES in preparing the ESIA in line with the EU Directive and the bank's requirements.
One of them is Green Home, whose executive director Natasa Kovacevic emphasized for CIN-CG, that they have warned the EBRD that this project is not following the principles of environmental sustainability and asked it to refrain from financing it in the foreseeable future unless all issues are resolved adequately.
During public hearings on environmental impact assessments organized by the EBRD and the Environmental Protection Agency (EPA), three key issues were highlighted - the environmental damage of the project, socio-economic justification and shortcomings in spatial planning.
“We tried to point out that the planned transmission line passes through the zone of strict protection of NP Durmitor and the second zone of NP Lovćen and additionally passes through four Emerald areas (Lovćen, Durmitor, the rivers Komarnica and Tara) as future Natura 2000 areas, and that the planned corridor and route violates the provisions of the Law on Nature Protection, " Kovacevic told CIN-CG.
According to her, the alternative was not chosen because avoiding the Lovćen National Park would be 18 kilometers longer and 7.74 million more expensive, and in the case of the Durmitor National Park, that would mean an additional 29 kilometers and 8.35 million euros.
Kovačević emphasizes that the visual and landscape identity of Durmitor and the Tara River is especially endangered by the transmission line: "Classified as highly sensitive, intolerant of changes, and it was already clear that the combined 40-50 meters transmission line poles through Durmitor and the Tara River canyon would significantly jeopardize one of the most important criteria for declaring this area a UNESCO natural heritage site."
The route of the transmission line in two places cuts off the map of the Emerald zone of NP Lovćen, which can be seen from the study for the transmission line "Lastva - Čevo" from November 2014, which CIN-CG received under the Law on Free Access to Information. The study done for the needs of CGES was conducted by the "Medix" bureau whose founder and executive director is Ljiljana Vuksanović.
Biologist Vuk Iković, a representative of the organization KOD, also points out that the transmission line caused the loss of the visual identity of Lovćen, distorting, in addition to the landscape, the biological value of the park.
The KOD believes that, if national parks could not be bypassed, an underground cable should have been chosen. That would not be an exception, because about 5.5 kilometers of underground cable was laid from the Adriatic coast to the converter station in Lastva.
"Maybe some other country would have a justification for not using the underground cable, but not Montenegro since it is defined by the Constitution as an ecological state. Our state should be covered by forests, not cables, cords, and pipes," Ikovic told CIN-CG.
CGES told CIN-CG that the option of laying underground cables in combination with an overhead transmission line was considered, but that such a solution "in addition to introducing disturbances, i.e. significant problems in the operation of the transmission system, is also avoided in international practice."
"Such a way of building the transmission lines would be economically unprofitable, especially having in mind the configuration of the terrain, i.e. mountain topography and forests, where the works on laying the underground cable would be far more complex, extensive, accompanied by mining, which would have a much greater impact on the environment and society as a whole,” CGES claims.
During the selection of the corridor, as pointed out by CGES in the answers to the CIN-CG's questions, care was taken to bypass protected areas, avoid fragmentation of national parks, as well as to use the routes of the existing 110-kilovolt transmission lines as much as possible.
The EBRD document states that the route of the transmission line in some parts of the Lovćen National Park is up to 100 meters wide. Ikovic points out that the harmful consequences most often occur "at a distance of one kilometer from the route itself". He says that building of a transmission line or a road prevents part of the animals from reaching the feeding ground or breeding area. Certain species must be exposed to the sun to move from one part of the forest to another which may be "fatal for many of them." But it not clear what consequences it may have, because in the Study on the Environmental Impact Assessment for the Transmission Line Čevo - Pljevlja, Iković points out, it is written that it has not been investigated in detail.
"If you do not know with great certainty the state of nature, then you cannot even know how a transmission line will affect the animal world and what measures should be prescribed to reduce the negative impact. The doctor cannot prescribe you medication before making a diagnosis ", Iković warns.
Some forest species that are active during the day must cross the cleared area and be directly exposed to the sun. This is fatal for species that lose water quickly such as amphibians.
Ikovic points out that, for example, salamanders are on the list of protected animals in Montenegro and are highly sensitive to temperature changes.
"If the cleared area passes through the reproductive center of the salamander population (e.g. ponds or puddle), then that species will disappear from that locality because there is no place to lay eggs. A similar thing happens if the route in the form of a barrier prevents salamanders from reaching the pond," Ikovic said.
Nature was not taken into account when the transmission line was built, but, in Iković's opinion, it was designed "according to petty-own interests".
He reminds that national parks, in addition to natural wealth, also have a strong tourist dimension. According to official data, all five were visited by 600,000 people last year, mostly Durmitor.
Ornithologist Bojan Zekovic from the Center for Protection and Research of Birds (CZIP) also told CIN-CG that he is additionally concerned because "the area of Jezerska Površ (Plateau of Lakes) on Durmitor, especially around Bara Zugića, is important for the migration of predators," which are also the high-risk group due to the possibility of death from electric shock or collision with installations.
Zekovic says that further monitoring is necessary to see which species are most endangered and in which parts, but he also suggests the installation of jammers and insulators.
Cecilia Calatrava, a communication specialist at EBRD, told CIN-CG that during the route selection they agreed on "measures with CGES to reduce the consequences in the NP, including local analyzes for setting up poles and timing for construction works that are out of the season of nesting and mating birds."
Unlike the environmental organizations Green Home, KOD, CZIP, and others, the Public Enterprise National Parks claims for CIN-CG that the entire transmission line route goes through the third zone of both parks, which, according to the Law on Nature Protection implies that settlements and accompanying infrastructure can be built.
Considering that Terna, instead of a 1200MW submarine cable, installed half as small, economist Dejan Mijović believes that the existing high-voltage transmission network, built with the support of the World Bank in the 1970s, and which connects all countries of the former Yugoslavia, can service all electricity trade of Montenegro and its neighbors with Italy.
"CGES's investment in the construction of the Lastva transformer station and its connection to the existing transmission network was rational and justified. However, the construction of a new transmission line to Pljevlja and the destruction of national parks was unnecessarily rushed after the Italian Terna gave up laying the second core of the 600MW cable, without any guarantee that it would do so in the foreseeable future. Therefore, it would be most rational for CGES and Montenegro to immediately stop further construction of the transmission line and the use of the unspent part of the EBRD loan. Even if the Italian partner changes its mind in the meantime, a part of the transmission line should be dismantled, which completely devastated our most beautiful natural areas and endangered the survival of the local population, because it made them unsuitable for the development of rural tourism. In any case, it is necessary to carry out a detailed cost-benefit analysis of alternative construction options, i.e. the possibility of bypassing or laying an underground cable through the most vulnerable areas, as this has never been done properly. I am convinced that such an analysis would show that there is a solution whose benefits for society would be significantly greater than the slightly increased construction costs," Mijovic said in an interview with CIN-CG.
He reminds that Terna's initial motive was to enable the import of cheap electricity from the region because it could be sold at higher prices in Italy. They counted on large imports from existing and newly built production facilities in the region, not just green energy, which required a 1,200MW cable.
"They gave up when they realized things were not going according to plan, that numerous, market-competitive solar and wind power plants (financially viable without state subsidies) were being built in Italy, while Montenegro and other countries in the region were not realizing planned investments in expensive and unprofitable thermal and hydropower plants ", Mijović said.
Terna did not answer CIN-CG's questions about whether and when another submarine cable is expected to be installed, and CGES said that it was "primarily related to the future needs of the electricity market in both the Balkans and the Apennine Peninsula." Referring to the executive director of TERNA, Luigi Ferraris, the Italian media announced that the second cable can be expected only in 2026-2027.
CGES previously told CIN-CG that the works on the construction of the transmission line through the Durmitor National Park have not started yet, except for the preparations for cutting down the forest on the access roads and the transmission line route on the territory of Zabljak. The COVID-19 pandemic, they point out, has partially slowed down the works, but they will try to finish them on time.
"The plan envisages that the works on the construction of the TL Čevo - Pljevlja will be completed by the end of 2021," it was stated in the response from CGES.
The total budget of the transmission line project is around 106 million euros. As of 2019, more than 95 million euros have been spent. The construction of the "Lastva-Čevo" section amounted to about 31, while about 40 million euros were allocated for the "Čevo-Pljevlja" part.
Through the estate, no matter what
The persistence of CGES to pass the transmission line through national parks will affect citizens as well. Radomir Martinović from Cetinje goes to Ulcinj every other day to get milk to make and then sell cheese. He had moved a herd of cows from the Lovćen National Park to the south after transmission lines were installed over his property.
On the estate, a few kilometers before a popular picnic spot Ivanova korita, in addition to two houses, Martinovic also has an unfinished motel. The problems, he claims, started when the commission of the Real Estate Administration, composed of four court experts, determined that "there should not be residential or other construction facilities in the corridor of this section of the transmission line".
After Martinovic's complaint, the same commission noted three months later that "transmission lines diagonally divide arable agricultural land and the small part of land remains on the southwest side, with a family house and an auxiliary facility."
The document of the commission of the Real Estate Administration from mid-July 2013, which CIN-CG had access to, states the concern "that there is a possibility that electric and magnetic fields adversely affect human health, because they encourage the development of malignant diseases, leukemia in children, to destroy the body's immune system, create suicidal instincts in people who stay longer in the transmission line zone ".
The Commission assessed that CGES should consider the possibility of relocating the transmission line route. Martinović says that his relatives offered the transmission lines to cross their properties. CGES told CIN-CG, however, that in 2017 they analyzed how to avoid Martinovic's property, but, "unfortunately, neither the owner nor his neighbors and relatives showed readiness to accept a compromise solution."
“… A fair compensation for the real estate which is the subject of expropriation has also been considered, but Mr. Martinovic did not agree with the proposed one,” the state-owned company said.
Martinović points out that they offered him about a quarter of a million, but that foreign experts estimated that his property was worth three million euros. He would be satisfied with two million, to buy another land, build a motel and continue the family business with his sons.
No agreement was reached, and CGES explains that based on the decisions of the Real Estate Administration and the Basic Court in Cetinje, it installed a transmission line over the property "as provided by the Detailed Spatial Plan (DSP) and the issued building permit, because the landowner did not allow any works ”.
The KOD organization, which has dealt with this and several other cases, says that CGES did not approach the compensation of the local population on a fair basis.
"In 2017 alone, CGES earned 34.7 million euros with a profit of 4.7 million euros. They offered the family we had contact with 2.3 euros per square meter, although the expert's report says that the possibility of use will be significantly reduced. In the vicinity, the land is sold for over 20 euros per square meter ", Iković said.
The maximum capacity
According to CGES data, from the commissioning of the submarine cable until the end of August, including transit through the Montenegrin system, 916,631.59 MWh was imported from Italy, while 916,641.03 MWh was exported to that country.
Despite significant challenges and disruptions in the electricity market with the emergence of the coronavirus pandemic, the results so far not only support the thesis of the cost-effectiveness of the submarine cable project but also exceed the company's expectations, CGES said, pointing out that they "regardless of when the second core will be laid", received at their disposal a part of the capacity of the submarine cable of 200 MW, which was defined at the beginning of the project.
Based on the data on the site, it can be seen that a maximum cable transmission capacity of 600 MW was often used.
“Revenues of transmission system operators come from the allocation of cross-border transmission capacities. CGES earned € 4,435,201.93 at the auctions of cross-border capacity allocation on the border with Italy, while in the first nine months of this year, the revenue from the allocation of cross-border capacity with Italy was € 3,755,552.57,” the CGES stated.
Miloš RUDOVIĆ
EVEN THOUGH THE EUROPEAN PARLIAMENT DECLARED 2028 AS A REASONABLE DEADLINE FOR AN ASBESTOS-FREE EUROPE, MONTENEGRO DOES NOT HAVE ANY ACCURATE RECORDS OF CANCER-CAUSING MATERIAL OR A PLAN FOR ITS REMOVAL
"My child will be bathing there tomorrow," Mladen Krivokapic told CIN-CG/Monitor.
He is one of 15 workers who worked on clearing the terrain of the former Bijela Shipyard. The removal of huge quantities of grit and other dangerous materials was supposed to be completed by the end of June. But their contracts were not extended in May, after, as they claim, they warned their supervisors that the area is being cleaned unprofessionally and that dangerous asbestos-containing material remains in the environment which poses threat to human health.
''In some places, the ground was dug seven meters and it was properly cleaned, while in other, against regulation, only half a meter. We asked the Nature and Environmental Protection Agency (NEPA) and Center for Ecotoxicological Research (CETI) to check it. However, instead of CETI taking the sample itself, the Valgo Company provided samples for it, after which CETI claimed everything was fine. NEPA didn’t even show up,'' Krivokapic claims.
The five-member team, which, according to him, was trained by experts from the Valgo Company from Paris, extracted asbestos from the grit.
"They had complete equipment, like astronauts - gloves, masks, suits, oxygen. Up to eight kilograms of asbestos were extracted daily and stored according to a special procedure. Several tons of asbestos are now stored in the Shipyard, waiting for export ", Krivokapić says.
We have not received answers from the Valgo Company, whose representatives signed the contract with the Ministry of Sustainable Development and Tourism in June 2018, on the soil remediation in the former Bijela Shipyard. NEPA hasn’t responded either regarding the claims of the fired workers.
Valgo has been selected following the international tender. The removal of grit (solid waste and contaminated land) is part of a project to rehabilitate black environmental spots, for which Montenegro has taken a 50 million euro loan from the World Bank. After that, a mega yacht service is planned to be built in Bijela, based on a 30-year concession given by the Government to the Damen-Porto Montenegro consortium.
The protest of these workers and the asbestos stored in Bijela additionally brought to the fore the topic of the health risk of the population. Even though the European Parliament approved a resolution in 2013 declaring 2028 a reasonable deadline for "an asbestos-free Europe", Montenegro still does not have accurate records of asbestos-containing facilities or a precise plan on how to remove from the environment material that causes some of the most serious diseases.
Government institutions dealing with ecology are mainly concerned with shifting responsibilities and recalling that the 2016 Law on Environment (11 years after the EU directive) completely prohibits asbestos-containing products from entering the market, as well as the use of all types of asbestos fibers. They also remind that it stipulates that facilities built after this period, do not contain asbestos.
Inhalation of asbestos fibers causes lung cancer
Existing facilities and devices are an issue. Inhalation of asbestos fibers has been shown to cause lung cancer and other lung diseases. Asbestos fibers are invisible, up to 500 times thinner than hair follicles. The consequences of exposure to a "silent killer" can occur even after 40 years.
"Asbestos is all around us" – this is the title of a publication published ten years ago by the Croatian Institute of Toxicology. It is very similar to the Manual on the Handling of Materials Containing Asbestos Fibers issued in 2017 by the Ministry of Sustainable Development and Tourism (MSDT) and the Nature and Environment Protection Agency. According to this manual, every building that was constructed or refurbished before 2000 could contain asbestos.
Prominent Dutch expert Harry Vonk, the author of numerous books on the subject, pointed out, during his visit to Belgrade last year, that more than 18,000 items contain asbestos, of which only 15 percent do not cause cancer.
"Harmful health effects of inhaled asbestos particles are a consequence of its proven carcinogenic effect," Dr. Ivana Joksimović from the Institute of Public Health of Montenegro told CIN-CG. "If necessary, asbestos removal should only be carried out under strict control measures to avoid exposure. This requires the use of personal protective equipment - special respirators, protective goggles, gloves, and clothing, as well as adherence to special instructions for their decontamination."
From water heaters to brakes
Joksimović reminds that asbestos was installed in households in different places, in external or partition walls, different forms of cement mixture or mixture with polymers such as vinyl, old roof panels, as an insulator in ovens, water heaters or steam heating boilers, in plumbing pipes, electrical appliances, car brake systems, gloves and clothing for heat protection…
Joksimović states that workers in the following industries are at risk of contracting asbestosis and other diseases related to asbestos: shipbuilding industry, tractor industry, motor and textile industry, construction workers, workers renovating houses and removing asbestos, as well as miners.
"It is very important to emphasize that asbestos materials must not be touched unless it is necessary because decomposition is a very big issue during its removal due to the health risk to which both workers and citizens are exposed," Joksimović emphasizes.
The World Health Organization estimates that 125 million people worldwide are exposed to asbestos in the workplace each year. According to the International Labor Organization (ILO), more than 107,000 workers die each year from disease caused by such exposure. Several thousand people die each year from asbestos in their surroundings. According to European experts’ estimates, about half a million people in the EU will die by 2030 due to asbestos exposure in the second half of the 20th century. Although asbestos was banned by Sweden 30 years ago, the number of deaths due to occupational exposure to it is two to three times higher than the number of deaths due to work-related injuries.
The consequences of asbestos exposure in Montenegro are not sufficiently known.
"According to data obtained from healthcare institutions, diseases that can be linked to asbestos exposure are rarely reported, but there is currently no mechanism to confirm the causal link with certainty. The establishing of the register of occupational diseases will create conditions for connecting, identifying and confirming asbestos-related occupational diseases", Joksimović says.
Such register has never existed in Montenegro, and the Government's Strategy for Improving Occupational Medicine 2015-2020 states that "there is no reliable data on the incidence and prevalence of occupational diseases." There is a Rulebook on Determination of Occupational Diseases, which lists 56 occupational diseases, including asbestosis of the lungs, but there are no data on sick persons.
Đina Mitrić, the coordinator of the Safety at Work Association of Montenegro (SWAM), reminds us that this first of August, on the World Lung Cancer Day, the need to raise awareness about the risks was pointed out. One of the most common forms of cancer is associated with exposure to dangerous substances, such as asbestos.
"But, it seems that people in Montenegro don’t want to listen about that," Mitric said.
Experts needed only because of the loan
According to her, the Association contacted professors from the Faculty of Metallurgy and Technology who were in the expert teams regarding the mentioned grit in Bijela and found that none of them had any information on what was happening at that location.
"The moment the funds were received from the World Bank, their expert opinions were no longer of interest to anyone. It is only known that the grit still lies in the crumbling sacks in Bijela. Nobody knows what happened to the asbestos that was extracted from it and other dangerous heavy metal impurities," Mitric says.
Civil engineer and appraiser Predrag Nikolic points out for CIN-CG that it is necessary to remove asbestos pipes in the water supply system. That job will imply certain health risks, so the necessary equipment and protection should be provided. Monitor/CIN-CG wrote that it is necessary to replace about 620 kilometers of water pipes in Montenegrin waterworks, for which 100 million euros are needed.
When it comes to the region, the progress has been recorded. Siniša Mitrović, from the Serbian Chamber of Commerce, explains for CIN-CG/Monitor that last year they intensified cooperation with the Dutch company KIWA, which is the leading company in Europe for asbestos disposal. So far, they have created the project Asbestos Monitoring in Serbia, in which special emphasis is placed on public facilities - schools, military barracks, centers for social work, health and agricultural facilities, water supply infrastructure…
"We are raising the capacity of the laboratories for testing the presence of asbestos in construction facilities, and the first asbestos handling center during the demolition of buildings and its proper disposal. We are finishing the new Rulebook on asbestos since the previous one was made in 2010. The most important thing is that we are ready for the regional monitoring project, as well as for the regional center for permanent storage of asbestos ", Mitrović says.
He recommends to his colleagues in Montenegro to establish contact with a Dutch company, which, among other things, can help access EU funds to solve this problem.
"The cadaster of facilities containing asbestos has been established, but since there is no legal regulation by which representatives of local self-governments would be obliged to report such facilities, that work cannot be carried out well," Mirjana Sklabinski from the Serbian Ministry of Environmental Protection stated.
"The Ministry of Sustainable Development and Tourism does not have data on facilities in the construction of which asbestos was used," the MSDT answered CIN-CG/Monitor.
According to the architect Borislav Vukićević, this indicates a whole series of problems. He explains that the establishment of a database on asbestos-containing facilities is the first step on the way to defining procedures for its safe removal.
''If there is no initial data - then it is not possible to plan further activities. This does not only apply to the list of facilities. It is necessary to determine the exact positions of the asbestos elements in those facilities - which would be, I suppose, a serious and demanding job - which would necessarily precede the removal itself ", Vukićević said.
The Agency recalled the existing manual and submitted data that in 2010 they issued a permit for the export of 1,500 tons of waste construction materials containing asbestos. The second permit was issued in March 2018, when 200 tons were exported. The waste was exported to Germany, and the work was done by the Hemosan Company from Bar.
Zoran Nikitović from Hemosan says that their company worked on the removal, packaging, storage, and export of hazardous waste, including asbestos waste, on the entire territory of Montenegro. Since 2010, they have exported a total of 1,488.70 tons of all types of hazardous waste - Porto Montenegro 594.20 tons, Lustica Development 145 tons, Porto Novi 220.37 tons. It is exported to EU countries, and one of them is Germany.
"The price is determined by parameters such as quantity, type, export destination, packaging, storage," Nikitovic says. He is not allowed to state the precise price due to contractual obligations, he explains, but they range from 1,100 to 1,300 euros per ton.
"The main goal is to protect the population from a disease called asbestosis, which causes lung cancer and which is recognized in the world as one of the causes of lung diseases. It is very important that protection measures are carried out rigorously and that there is no improvisation in this type of work, as with all types of hazardous waste. Exports are done according to the Basel Convention and it is quite difficult to get a permit to the final destination. After packing, it can be stored at the location of work, or if there are smaller quantities in our warehouses that are specialized and safely packed ", Nikitović says.
When asked what kind of waste construction material it was, whether they were removed from old buildings, how much it cost to remove it and export to Germany, the Agency said that they did not have that information and referred us to MSDT.
The Administration for Inspection Affairs, however, states that the Agency also has competencies: "Asbestos that is installed in buildings, in case of demolition, i.e. removal is considered hazardous waste, according to the Law on Waste Management. Investors, or contractors, depending on who is the holder of such waste, must develop a Construction Waste Management Plan, and since asbestos is considered hazardous construction waste, they must obtain the consent of the Nature and Environmental Protection Agency."
"In previous years, on several large investment projects, the asbestos roofing was removed. A legal entity licensed by the Agency for Management of this type of waste was in charge of asbestos removal. The Administration stated that after its removal, it was packed and after obtaining permits, exported from Montenegro for permanent disposal.
MSDT told CIN-CG that "in order to introduce energy efficiency measures", a large number of health facilities, educational and social institutions and buildings, where the administration is located, were renovated, and that "… in case of finding asbestos materials it was removed and managed in an adequate and legally prescribed manner." For the exact number of facilities, we were referred to the Ministry of Economy.
Former Minister of Sustainable Development and Tourism Pavle Radulović, was not specific in one of the last public appearances in October last year during the parliamentary debate, in which he, referring to asbestos and a large number of cancer patients, stated:
''The existence of asbestos is a factual situation. We are grown people, we can tell fairy tales, but asbestos pipes, roofs, and facades still exist in certain parts of Montenegro. These citizens have been warned. I hope that the state will regulate it through the social program since the citizens cannot finance the replacements themselves.''
Radulovic has resigned, and Prime Minister Dusko Markovic is currently at the head of MSDT. Asbestos is not in the program documents of the current election campaign.
NO MORE WASTE EXPORTS TO SPAIN
In Bijela, it was necessary to treat 150 thousand tons of materials - land, dust from metal residues, and other waste, on an area of about 18 thousand square meters. The project relies on Valgo's expertise (Valgo is an asbestos removal and soil remediation company) regarding detailed analysis of contaminated soil and treatment of sensitive waste including hydrocarbon derivatives, metal, and asbestos.
From March to August last year, 38,500 tons of grit were exported to Spain. In September last year, the Montenegrin government asked Spain for permission to export another 30,000 tons of solid waste and 40,000 tons of contaminated land but they refused. Since then, grit export has been stopped. Valgo Company announced in April this year that the Norwegian Environmental Protection Agency had given the green light for the import of contaminated land from the Bijela Shipyard.
"Tons of grit, enough to fill seven to eight ships are waiting to be exported. Everything stopped, although according to the contract with Valgo, it was supposed to be finished by June 30 ", Krivokapić says.
ASBESTOS-CONTAINING MATERIAL WAS KNOWN TO BE HARMFUL
Asbestos was widely used in construction between 1950 and the mid-1980s. This material was installed in factories, halls, houses, entire residential areas, but also in schools and hospitals throughout the former Yugoslavia. It is most often used in the components of vinyl tiles and vinyl floors and a popular asbestos roof panels in Yugoslavia.
The Salonit factory in Vranjica near Split, which has used asbestos in the production of construction materials since 1921, has produced over seven million tons of asbestos roof panels.
"It was known 40 years ago that asbestos was harmful. I remember that my father took it off from the old house, so he covered the barn and barracks with it ", says a farmer from Bjelopavlići. A similar experience is described in Croatian manuals dealing with this topic: "If people were aware of this danger, it would not happen that the replaced asbestos roof covering would end up as a temporary roof covering for all possible canopies, storage rooms, as protection and a roof for wood and dog houses, etc."
Asbestos is a solid material, and any work on its removal or replacement when it breaks, punctures, drills, creates an emission of asbestos dust, which when inhaled causes serious diseases.
In 2018 alone, close to 300 tons of asbestos waste was removed in Serbia. The plan is to make a national register in the next two years so that Serbia can apply for European funds and thus repair as many facilities as possible.
Predrag NIKOLIĆ
Andrea JELIĆ
Experts claim that asbestos water pipes are not so harmful, but their replacement is primarily to protect human health and the environment. It is estimated that the investment requires at least 100 million euros, while the state still does not have 750 thousand for the project
Health protection of the population and huge technical and economic losses are officially the reasons why Montenegro has to follow the example of other European countries and replace about 620 kilometers of water pipes, made with a mixture of asbestos fibers and cement.
It is uncertain when the whole work will start because 100 million euros are needed, and currently, there is not even 750 thousand euros for the project development - the research of the Center for Investigative Journalism of Montenegro (CIN-CG) and the weekly Monitor has shown.
Currently, only the residents of Plužine and Petnjica have the privilege of not drinking water from asbestos-cement pipes. Others can only comfort themselves that there is no reliable evidence of the harmful effects of ingesting asbestos fibers. However, inhaling asbestos can cause cancer.
In Montenegro, the ban on placing on the market and use of asbestos fibers was introduced only by the 2016 Law on the Environment. Due to the possible carcinogenic effect, this material was banned in the European Union (EU) in 2005. This regulation allows the use of products containing asbestos fibers, installed or in service before 2005, in the EU until their disposal, i.e. the end of their service life, so many European cities still face the same problem.
Asbestos was widely used in construction between 1950 and the mid-1980s when pipes made of this material and cement were installed in water supply systems in all countries of the former Yugoslavia.
Inhalation of asbestos fibers proven dangerous: Hygiene specialist Dr. Ivana Joksimović from the Institute for Public Health (IPH), who conducts the sanitary analysis of drinking water, explains for CIN-CG/Monitor that asbestos is a naturally occurring fibrous silicate mineral, mostly magnesium and iron. Due to its characteristics - resistance to temperature, stretching, and chemicals, it was used for the production of water pipes during the last century.
Thus, these pipes are still part of the distribution networks of European and world capitals. It is estimated that there are more than 400 kilometers of them in the Belgrade water supply system, and it is similar in Budapest, Barcelona, Sofia, Vienna, Lisbon, Warsaw, Rotterdam…
Harmful health effects of inhaled asbestos particles, as Dr. Joksimović points out, are a consequence of the proven carcinogenic effect.
"However, not all the details regarding the health effects of asbestos intake through drinking water passing through asbestos-cement pipes have been clarified yet. Nevertheless, it is considered that ingesting is far less harmful from the health aspect than the inhalation of asbestos particles ", Joksimović states.
Hydrologist Mihailo Burić told CIN-CG/Monitor that due to erosion or physical damage to the pipes, there is a risk that asbestos fibers can be found in the water: “This is everywhere marked as a health risk and asbestos pipes are phased out from the residential, commercial and industrial piping. Asbestos does not dissolve in water, so there is no danger on that basis." It is not known to Burić if asbestos has been found in our waters.
He also states that chlorination of water carries certain health risks, and those modern systems for water purification use UV rays and ozonation. However, these techniques are still way too expensive for Montenegro.
"Our waters are at the top in the world in terms of primary quality, there is only a bacteriological risk", Buric explicitly stated.
The World Health Organization (WHO) has no guidelines: This is exactly the risk that the Nature and Environment Protection Agency (NEPA) states in its reports every year - the biggest sources of surface and groundwater pollution are municipal wastewater. The latest published report for 2018 states: "In the continental part, the natural water quality at almost all groundwater sources is worsened by predominantly anthropogenic influences and is the result of inadequate sanitary protection and inadequate sanitation of the catchment area." Groundwater in Montenegro provides about 92 percent of the total amount of water to supply settlements.
The World Health Organization has so far not determined the carcinogenicity of asbestos ingested by drinking water, so there are no guidelines on the permitted amount in water. A risk has been recognized for people working on the removal of asbestos pipes because they can inhale particles of this material.
"Asbestos exposure occurs through inhalation of fibers present in the air, most often in the work environment, near factories where asbestos is used, or indoors containing asbestos materials in poor condition. Prolonged exposure can cause lung cancer and other lung diseases ", is stated on the website of the Ministry of Health of Croatia.
The Institute of Public Health 'Batut' in Belgrade reacted to the frequent media reports in Serbia that drinking water flowing through asbestos pipes causes cancer, saying that epidemiological studies on experimental animals and the human population have shown that there are harmful effects on health if asbestos is inhaled, but that there are no harmful effects if ingested with drinking water.
The director of the Croatian Institute of Toxicology, Dr. Franjo Plavšić, also categorically claims that there is no harm to the health of the population, considering that asbestos particles do not dissolve in water. He has stated in the author's article that "asbestos is dangerous only if its fibers are inhaled, while they can’t cause health problems if swallowed."
TWO-THIRDS OF WATER ARE LOST: Pipes containing asbestos, on the other hand, showed shortcomings due to the large loss of water flowing through them. Burić states that the technical and economic motives for replacing these pipes are significant because up to two-thirds of water is lost.
"The question is how realistically the constant losses are shown – according to some the loss is 50 percent, and according to others 70 percent. It is certain that part of the losses is caused by asbestos pipes, because they often burst, unlike new plastic ones ", Burić says.
The Association of Waterworks of Montenegro (AWM), which brings together all Montenegrin water companies, began preparing the project "Replacement of asbestos-cement pipes in the water supply networks of Montenegro" in June 2018. Despite assurances from experts that asbestos pipes are safe, they also indicated in the project's objectives that its replacement "provides health protection to the population", then reduces water losses, increases water security, enormously increases business efficiency, and meets EU requirements, which is in line with the negotiating Chapter 27 – Environment and Climate Change.
The Ministry of Sustainable Development and Tourism (MSDT) explained to CIN-CG/Monitor that the replacement of these pipes is not one of the criteria for closing Chapter 27, in negotiations with the European Union, but that "our country is replacing the remaining asbestos-cement water pipes, primarily to protect human health and the environment”.
COALITION 27 IS WARNING OF WASTE: "The distribution water supply network in most cities consists of asbestos-cement pipes. Disposal of construction waste containing asbestos is not adequately regulated ", it is stated in the Shadow Report of the Coalition 27 (non-government organizations dealing with ecology). They also stated that it is necessary to raise public awareness about the harmfulness of chemicals, handling substances containing asbestos fibers, and handling asbestos waste.
Thanks to the support of the United Nations Development Program (UNDP), in 2019, project tasks were prepared for 21 municipalities, necessary for the development of major projects for the reconstruction of asbestos-cement pipes.
Within the local self-governments, there are 21 city companies for water supply and sewerage with a total of 2,124 employees. Most of them are in Podgorica - over 600.
"Every water supply system in Montenegro has technical and commercial losses. The technical losses are affected by the age and quality of the installed water supply network, and in developed countries, they range from 18 to 22 percent ", Bojan Lazović, the President of the Assembly of the Association of Waterworks of Montenegro, explains.
In addition to the losses recorded by developed countries as well, the specificity of Montenegro is the so-called commercial losses, which is a euphemism of illegal connections and theft.
"Based on the research, we came to the data that water theft accounts for close to 18 percent of total commercial losses, which mostly happens in suburban settlements," Filip Makrid, the executive director of Podgorica's Water and Sewerage Company, explains.
As the most common reason for this type of loss, he states the impossibility of access to the network, because most of it passes through private properties. The solution, according to Lazovic and Makrid, would be to relocate the pipeline under public space, which is a lengthy process that requires a lot of money.
In Herceg Novi, on the way to the consumers, close to 60 percent of water is lost in the summer and about 70 percent in the winter months. The losses are also a consequence of the fact that in Bijelo Polje, for example, the water supply and sewerage network dates from 1961. In Nikšić, the average age of pipes is 35 years, while some parts were installed in 1931.
According to Makrid, Podgorica has smaller losses compared to other municipalities. They managed to reduce them from 61.77 percent in 2010, to the current 48-49 percent.
Despite the reduction, only in Podgorica, due to losses on the network, there is an annual loss of water in the market value of about seven million euros. This calculation was made at the beginning of the year by Zoran Mikić, a member of the Civic Movement United Reform Action (URA) in the Assembly of the Capital, emphasizing that more than 40 million euros of water have been spilled in the last seven years.
Makrid announces that a pilot project to reduce network losses for the areas of Donja and Gornja Gorica, Donji Kokoti, as well as the settlements of Beri, Farmaci, Lekići, and Grbavci, will be completed in the second half of the year.
Asbestos-cement pipes were dominant in the capital's water supply system 15 years ago, but they managed to reduce it from 60 to 18 percent. There are still 136 kilometers of these pipes in Podgorica, and "greater progress is not possible without additional funds, earmarked for this type of work", Makrid says.
"The replacement of dilapidated asbestos-cement pipes is conditioned by the size of the pipeline that is changing. Pipelines with smaller diameters up to 100 millimeters are mostly replaced by polyethylene pipes, and larger diameters with ductile iron or steel pipes,” Markid explains.
The estimated average value for the construction of one meter of water pipe, when replaced, is between 80 and 200 euros. Makrid said that "according to experience, taking into account the urban conditions where the largest number has been located the costs for Podgorica will range from 120 to 180 euros per meter".
MSDT calculates that 170 thousand euros are needed for the preparation of the first phase of the main project, which would replace the 129-kilometer-long pipe.
"These funds need to be planned within the budget of local self-government units, with the support of the capital budget." The deadline for the development of the main projects for the reconstruction of asbestos-cement pipes will be defined after the provision of financial funds, after which the reconstruction will begin," the Ministry has stated.
Assessing that 750,000 euros are needed to make the complete main project for the replacement of about 620 kilometers of pipes, Lazović states that water supply systems are not a unique system like the Electric Power Industry of Montenegro, because the founders and owners are the municipalities.
"Therefore, all investments, including the replacement of dilapidated pipelines, depend on the financial situation of the water supply companies," Lazović explains.
Risky in buildings older than 20 years
At the parliamentary session in October last year, MP of Democratic Front (DF) Branko Radulović asked then Minister of Sustainable Development and Tourism Pavle Radulović if he knew how many asbestos-cement pipes through which water flows in Montenegro were there. "There are 3,000 people who officially get cancer. One thousand five hundred are cured, and one thousand five hundred die. These are IPH's data," Radulović said.
"We are grown people, we can tell fairy tales, but asbestos pipes, roofs, and facades still exist in certain parts of Montenegro. These citizens have been warned. I hope that the state will regulate it through the social program since the citizens cannot finance the replacements themselves. And it’s not just about asbestos. You’ve heard that 16 water companies don’t measure abstraction (water intended for human consumption is water abstracted from a spring and has the quality prescribed for raw water). So, we don't know quantities they abstract" former Minister Pavle Radulović said at the time.
The Nature and Environment Protection Agency issued a Manual on the Handling Materials Containing Asbestos Fibers three years ago. It states that, if the facility was built before 2000, it can be assumed that asbestos is present in it. It is also stated where asbestos was installed in households: in external or partition walls, old panels on roofs, as an insulator in ovens, water heaters, or steam heating boilers…
The media in the region published the statements of experts that in the former SFRY, asbestos was used during the construction of factories, halls, but also entire apartment blocks, health, and school facilities.
There is a well-known case of the asbestos settlement of Bele Vode, in Belgrade, in which apartment owners protested against the frequent occurrence of cancer. After ten years of protests, the entire settlement was relocated, and the demolition of the old one, which began in 2006, was completed in late 2011. Now the new buildings are there.
The cause of the most serious diseases
According to the website of the Croatian Ministry of Health, the main diseases caused by inhalation of asbestos fibers are mesothelioma (a rare type of aggressive and deadly form of cancer), lung cancer (high mortality), and other lung diseases: asbestosis (does not result in mortality, but it is a progressive disease) and diffuse pleural thickening (not life-threatening). It also states data from the World Health Organization that 125 million people worldwide are exposed to asbestos in the workplace: “During 2004, asbestos-related lung cancer, mesothelioma and asbestosis due to asbestos exposure at work caused the deaths of 107,000 people, at 1,523,000, the exposure resulted in health consequences that cause premature death”.
There is no cure for these often deadly diseases caused by asbestos. According to the Slovenian government's website: "Asbestos exposure remains a major problem in removal, demolition and maintenance procedures. Due to the long delay, the disease can appear even after 20 to 40 years after exposure. As asbestos use in Europe increased until the late 1970s, the annual number of malignancies will continue to increase even in those countries that first banned its use. In some Member States, the annual number of asbestos-related diseases will reach its peak only around 2030."
A little chlorine, cloudy and sometimes salty
Hygiene specialist Dr. Ivana Joksimović says that based on the results of analyzes from previous years, it can be said that the quality of drinking water in Montenegro is satisfactory, and that work should be done to preserve it by protecting the source and improving the supply system.
"If we analyze drinking water test results from the city water supply system, we can conclude that the cause of the malfunction was mostly the lack of residual chlorine and increased turbidity (during periods of heavy rainfall). In addition, on some water supply systems, especially in the period of low waters, salinization occurs on the coast ", Joksimović says.
According to the results of microbiological tests of the Institute of Public Health of Montenegro, during 2019, only 2.95 percent of chlorinated water samples did not meet the prescribed health standards, most often due to the increased total number of bacteria and the identification of coliform bacteria.
"A significantly higher percentage of defective samples was registered at measuring points in local, rural water supply systems, which indicates the need for more active monitoring in the coming period," Joksimović points out.
Predrag NIKOLIĆ
State institutions left the river to itself to solve the problem of pollution and ecocide downstream from Bijelo Polje. High-quality fish are declining, heavy metals have been found in them, and the number of fishermen has been reduced by three quarters.
"Nobody fishes in the Lim anymore. People neither eat fish nor give it to children because of the pollution. The fish stock has been reduced. There is not even ten percent of the former ", Ismet Softić, president of the Sport Fishing Club "Sinjavac" says for the Center for Investigative Journalism of Montenegro (CIN-CG).
He points out that in 2009, 828 recreational fishing licenses were issued, while only 220 last year. The fish used to be the primary food source for people of this area, but now nobody wants to eat it because it is contaminated.
Today, there are more than 270 illegal landfills near the Lim. There is a large number of industrial pollutants and untreated wastewater, from the half-century-old and 185-kilometer-long sewage network in Bijelo Polje flows into the river. All that has turned the river into one of the most polluted watercourses in Montenegro.
Due to the pollution, trout and some plant species disappear from the Lim, while others that tolerate released toxins are settled. Experts have also discovered a high concentration of heavy metals in fish.
A study conducted by CIN-CG showed that, even though the Lim has been declared a river of national importance and despite the warnings of experts and the obligations from the Negotiating Chapter 27, the state institutions do little to improve the current situation.
The Ministry of Sustainable Development and Tourism (MSDT) and its Environmental Protection Agency of Montenegro (EPA), as well as the Ministry of Agriculture and Rural Development with the Water Administration, do not have a comprehensive analysis of the River Lim, sediments, fauna and flora, land and degree of endangerment.
The Water Administration does not have a water cadastre. They accuse the municipalities of being late with the data. The municipality of Bijelo Polje has not even started the planned construction of a wastewater treatment plant. Fines for polluters are symbolic and often expire. Symbolic fines of several hundred Euros for individuals, up to a thousand for companies that persistently do not install treatment plants, are more stimulating than warning.
Occasional cases of fish die-off or changes in the color of the river due to the release of toxic substances, most often end in police reports against unknown persons and endless investigations without results. The Lim and other rivers in the north of the country are overseen by one inspector.
A fish die-off - investigation still underway: The source of the Lim is spotlessly clean. The Lim flows out of the lake Plav, collecting streams and rivers from the territory of Andrijevica, Berane, and Bijelo Polje along its 83-kilometer-flow through Montenegro. At the time of the SFRY, huge pollution began in Berane due to the release of toxins from the pulp and paper mill, which was closed at the end of the last century. The situation is now alarming near Bijelo Polje and downstream. The international river of the Danube basin then passes through Serbia and Bosnia and Hercegovina, and at the 220th kilometer, it flows into the Drina.
EPA's State of the Environment Report from 2018, states that the river below Bijelo Polje is "out of all prescribed classes" and "not usable", while “the pollution has been recorded through the content of phosphates, nitrites, TOC and the Ca/Mg ionic ratio”.
This was recently confirmed by a team of experts from the Faculty of Natural Sciences and Mathematics from Podgorica. A study of the ecosystems of the rivers Lim, Ljubovidja, and Bistrica, published at the end of January, shows that the pollution was mostly caused by industrial and communal waters, while poaching also contributed to the depletion of fish stocks.
The study was initiated by the local government after a large quantity of fish die-off due to the wastewater spills on September 2, 2019. Like numerous reports, this one is also in the investigation phase.
On February 28, 2020, the police, in cooperation with the Environmental, Agricultural, and Water Management Inspection, filed a criminal complaint with the Basic State Prosecutor's Office in Bijelo Polje against "Mesopromet" LLC and the responsible person HF (33), as well as against the company "Milka MDK" LLC and Manager M.Ć. (31).
Even after several attempts, ''Mesopromet" did not want to comment on this for CIN-CG, and "Milka MDK" said that they did not feel responsible.
“It is a long-lasting process, but we will try to prove that we are not responsible for the fish die-off ", Ivan Žunić, the executive director of "Milka MDK ", said.
Two and a half months after this incident, there was another, when black liquid was noticed in the Lim, due to which a criminal charge was filed against unknown persons. An investigation is still underway.
Long-lasting and dedicated devastation of a river: Danilo Mrdak, an ichthyologist, a professor at the Faculty of Natural Sciences and Mathematics, and a member of the team that worked on the study, claims that devastation of the Lim was ''long-lasting and dedicated process.''
"Complete negligence comes to the surface only when dead fish start to float. Then people start wondering what is going on, the local fishing societies make their voices heard, videos and photos get viral on social networks, and the media starts reporting. This is a reflection of decades of negligence since it is assumed that the running water will carry it all away. This is what happens when there is no more room for all the waste and toxins," Mrdak told CIN-CG.
He points out that due to the pollution, "trout become so rare that it can be considered endangered".
"Species that are more tolerant of pollution and reduced oxygen are multiplying, which supports the thesis that fish community structure has changed. The good thing is that these changes are reversible so when the situation improves, the fish that are now rare or non-existent will return," Mrdak said.
An indicator of pollution, he says, is the appearance of invertebrates, in science known species from the group Oligochetae, Diptera, and Nematoda, which develop in such an environment.
In the Analysis of Water Pollution in the Lim conducted during 2015 and 2016, environmentalist Danijela Veličković found heavy metals, iron, copper, and zinc in the common nase and chub. There were about 57.5 milligrams of iron per kilogram in the muscle tissue, which is above the limit value of the Montenegrin rulebook on the quality and content of heavy substances, mycotoxins, and other toxins in food.
Veličković is also a member of the commission that worked on the Local Environmental Action Plan of the Municipality of Bijelo Polje 2019-2023 (LEAP) that concluded that “the Lim is the most polluted and neglected watercourse in the country.”
She says that the biggest polluters are livestock and chicken farms, slaughterhouses, households, gravel and sand mines, printing houses, and dairies.
"When large amounts of untreated municipal and industrial wastewater are poured into rivers, as in our country, there is a significant disturbance of the natural balance and pollution dangerous to the health of the population," Veličković says.
In the area of Berane, 42 unregulated construction and municipal landfills were listed on the banks of the river last year, while data on other types of waste are missing. The Catalog of illegal landfills in Bijelo Polje registered more than 230 of these landfills with all types of waste, except medical.
Verbal consent: According to the data of the Water Administration, the following companies: "Mesopromet", "Eko-meso" and "MI Burko" have temporary water permits for discharging technological wastewater in the Lim. These companies are obliged to examine the quality and quantity of wastewater. The others are not, so it is unknown what is disposed into the river.
According to the documentation provided to the CIN-CG's journalist in the premises of the Water Administration, the water permit was issued to "MI Burko" despite the untested operation of the treatment plant, due to, as stated, inaccessible terrain. This is contrary to the Rulebook on Issuing Water Acts because the commissions of the Administration should check the functioning of the plants for all companies that have been issued a water permit.
Public water and sewage utility "Bistrica" in Bijelo Polje, a town where according to the latest census 46 thousand inhabitants live, does not have a water permit for wastewater discharge, while the sewage system for collecting and draining wastewater is used by 16 thousand people, i.e. 32.5 percent. The report on the work of "Bistrica" for 2018 shows that the sewerage network is 40 to 55 years old, built of almost all known materials, steel, cast iron, PVC, polyethylene, zinc….
The director of "Bistrica", Mladen Bulatović, says for CIN-CG that "conditions must be created to implement the laws that regulate water area". A wastewater treatment plant (WWTP), is necessary. Its construction was planned for 2019, but it was postponed because there was no money. It was planned to cover the urban and industrial zone, i.e. the left bank of the Lim, which is the equivalent of 20 thousand citizens.
The LEAP also states that "an on-site inspection identified about 500 locations of sanitary wastewater discharges, and due to branches and vegetation on the Lim and tributaries, it is impossible to find every sewer pipe."
From 2015 to 2020, the water inspector issued 21 decisions to obtain water permits. Four companies, whose names the Inspection Directorate refused to disclose, were fined five hundred Euros each and given a deadline to obtain it. Three companies do not have it yet, so they were fined a thousand Euros.
The cadastre of potential pollutants, derived from LEAP, states that a dairy "Milka MDK", two chicken farms "Beganović", printing houses "Mercator" and "Pegaz", two wood processing companies "Brenta" ”, Ltd "Selector", "Bau Center" and "Gradišta Komerc" do not have water treatment plants.
CIN-CG's journalist saw drain pipes in front of companies and farms that do not have a wastewater discharge permit.
Among them, there are two chicken farms "Beganović" in Bijelo Polje. Authorized representative and founder Senad Beganovic refused to answer a CIN-CG's question on how he plans to protect the river.
Close to the car service and the vehicle technical inspection station "Wagen", the journalist also noticed two exhaust pipes. Traces of black liquid were also noticeable from one of them. The executive director of the company, Refik Kasumović, claims that it was not released from the company's premises.
“We are not an ordinary car service, and our wastewater cannot significantly pollute the Lim. Both pipes are sewage pipes and wastewater from the car service goes to the pool, which is regularly emptied, and it is performed by the utility company ", Kasumović said. Water and Sewer Utility confirmed to CIN-CG that wastewater from this and all empty basins is discharged into the river.
Wastewater and organic waste are located in front of the farm "Franca Oluja" on the land near the Lim. Company “Mesopromet” whose farm this is, refused to answer CIN-CG's questions.
"We do not have wastewater treatment plants, and we are not planning to build them, because there is no need. All our technological wastewater is collected and transported by the company for sanitary and environmental protection "Hemosan" from Bar", Zoran Loktionov, the owner of the printing house "Pegaz ", claims for CIN-CG. However, "Hemosan" told CIN-CG that they have nothing to do with the wastewater from “Pegaz”, and that in a certain period in 2019, they took away the packaging and paints.
Loktionov paid a fine of 1,200 Euros for spilling red paint from the company "Pegaz" in the tributary Lješnica, and then in the Lim on March 22, 2019. The company claimed that it was an employee's mistake.
The director of "Milka MDK", Ivan Žunić, said that the wastewater from the dairy flows into the common manhole of the sewage drain and it is thus treated.
"That is the problem that should be solved by the city sewage system to which we are connected. We regularly pay for the sewerage, 50 percent of the used water ", Žunić said. According to him, the dairy has had the same products for 40 years, they have never polluted the river, but they will still build treatment plants, when money from the European program for rural development IPARD, with 50 percent non-refundable support, is approved.
According to the regulations derived from the Law on Waters, "Milka MDK" should have a water permit for the discharge of wastewater, and the inspection should punish those who do not have it.
The other seven companies from the Cadastre of Potential Pollutants from Bijelo Polje, "Fishpond Kasumović", car wash "Damjanović", "Optikon Bistrica", PI "General Hospital", Health center, butcher "Denko" and "Mesopromet" have treatment plants, but Veličković still has objections.
"They have certain plants, sedimentation tanks, pits, manholes for primary wastewater treatment, so the inspection should check the work of those plants," Veličković says.
A bad example is a hospital in Bijelo Polje, from which sanitary and fecal waters go to a sedimentation tank, built in 1975 and reconstructed in 1999, and so insufficiently purified flow into the Lim.
"Wastewater from the nursing home and one part of the settlement is connected to the sedimentation tank, so it is difficult to determine the exact amount of fecal and wastewater," the Cadastre of Potential Pollutants states.
The hospital told CIN-CG that everything was fine with the plant, and that "other institutions should deal with its inspection and testing."
As a positive example, Veličković praises the car wash “Damjanović”, whose owner Vuk Damjanović implements good practice from Switzerland, where he lives. According to the available documents, this company uses the most modern methods of wastewater treatment.
"It is a separator with a volume of 2,000 liters, equipped with several filters, which completely clean the water and retain dirt, designed to protect the environment. We have owned the plant since the establishment and we chose it exclusively for the protection of the Lim and biodiversity ", Mirko Damjanović, the executive director of the car wash, said for CIN-CG.
Rita Bajraktarevic, an ecologist from Berane, points out that the Lim is the most polluted in the territory of Bijelo Polje because there is a larger number of polluters there. That city, unlike Berane, does not have a WWTP.
Pollution comes from neighboring countries as well: Danijela Velickovic estimates that the Lim is problematic because it is "unknown from the systemic scientific-research aspect".
"In order to talk about the degree of endangerment, it is necessary to do other analyzes in addition to the basic physical and chemical parameters: river sediments, state of fauna and flora, soil on the bottom and shore, geomorphology of the riverbed, degree of endangerment," Velickovic claims.
Everything that is thrown or dropped in Bijelo Polje easily ends up in a part of the Lim in Serbia, which is why the authors of the LEAP point out the danger of transboundary pollution in Serbia and Bosnia and Herzegovina.
Vladimir Malešić, a member of the Ecological Society "Friends of Sopotnica" from Prijepolje, says that "due to the great power of purification that the river has, the Lim in the territory of this municipality often belongs to classes I and II, less often at the transition to III. "
"Every high tide of water takes away, but also brings new quantities of waste, which cover the shores, while the trees are "decorated" with bags. It is obvious that huge amounts of garbage, in the part above Prijepolje, also come from Montenegro ", Malešić said.
The European Commission (EC) estimates that the level of harmonization of Montenegro with the European Union in the field of water management is still limited, and along with the climate changes it presents the weakest link, biologist Jelena Marojevic said for CIN-CG.
"The EC states that wastewater is still the largest source of river pollution in Montenegro. In this sense, more work is expected to solve the problem, especially in the process of drafting management plans for the Adriatic and Danube basins, which have been long-awaited. Montenegro needs to ensure the establishment of a water status monitoring program. Only by fulfilling the EU requirements to which we have committed ourselves, with consistent application of penal policy, raising awareness, changing bad habits and ways of doing business of some economic entities, can we expect that the condition and quality of our rivers will improve, so the Lim is no exception," Marojević concluded.
The management plan for the Danube basin, to which the Lim also belongs, is being drafted and it is expected to be completed by the Water Administration this year.
Drafting a list of pollutants takes a long time
The Environmental Protection Agency has warned several times that "the cadastre of pollutant sources, as a basic instrument in the policy of adopting measures and plans to prevent and reduce pollution, does not exist yet, so it is necessary to work on its establishment as soon as possible."
The Municipality of Berane is preparing the Local Environmental Protection Plan 2019-2023, from which the cadastre of potential polluters of this municipality could be drafted. From the available documents, as is the case in Bijelo Polje, it is not possible to conclude about the causes of pollution.
Professor Mrdak points out that the water cadastre, which, according to the law, should be managed by the Water Administration, is much more important for the water of state importance.
"I know that it does not exist yet, but that does not prevent the municipality from making its list of pollutants," Mrdak said.
The Water Administration answered CIN-CG that in October 2019, they started to make a water cadastre, but that the municipalities did not provide them with "all specific information".
"The municipality of Bijelo Polje submitted to this body the Cadastre of potential polluters. Water and Sewerage Utility of Berane gave a list of legal and natural persons who can be polluters on the territory of this municipality", it is stated in the response of the Water Administration.
One inspector cannot do everything
The most famous environmental incident on the Lim, in addition to fish die-off, is the release of red liquid in July and August 2017. The water inspector has filed two criminal charges against the unknown person, and the investigation is ongoing, the Basic State Prosecutor's Office in Bijelo Polje announced.
In October 2018, near the facility of the local meat processor, red liquid painted the Lim. A criminal complaint was filed against the unknown person, which is also in the investigation phase at the Basic State Prosecutor's Office.
From 2015 to 2020, nine criminal charges were filed on the territory of Berane. In two cases, the defendants for the disposal of municipal waste by applying the institute of deferred criminal prosecution paid 300 Euros each. Seven charges against the unknown persons for the exploitation of gravel and sand are unfinished, and many have expired. Three proceedings were initiated before the Misdemeanor Court in the same period, in one of which a fine of two hundred Euros was imposed, and two cases are still pending. The water inspector issued nine misdemeanor warrants of two hundred Euros each for illegal exploitation of river sediment.
All this is part of 520 inspection controls in five years, which were carried out by one inspector on the Lim. He also brought 21 decisions regarding the exploitation of river sediments, waste disposal, interventions in the riverbed, and the removal of sewer pipes, but as CIN-CG was informed from the Directorate for Inspection Affairs no one was punished.
The institutions in Bijelo Polje have not collected data on how many times and who has been punished for endangering the Lim, while the Communal Police from Berane issued seven misdemeanor orders for illegal dumping of waste near the river, but they avoided answering about the perpetrators and the number of fines.
Almir Mekić, director of the NGO "Euromost", on whose initiative the competent services went out on the field dozens of times, claims that reports are usually submitted when environmental incidents attract public attention. He also says that those irregularities are numerous and suggests more frequent controls.
Professor Mrdak emphasizes that "it is obvious that the sanctions did not help and that they were not enough, because last summer there would not have been a fish die-off, and the Lim would not have had such a gloomy appearance."
He estimates that more people should be involved in the supervision of rivers of state importance in the north of Montenegro.
"A complete reorganization of the water sector is needed, with the delimitation of competencies, specification of procedures, and systematization of jobs. I know that there is no hydrologist employed in the Water Administration, as well as that there is only one water inspector for the entire north, "said Mrdak.
Alisa HAJDARPAŠIĆ
White bread prices will be capped, while the socially vulnerable will receive a free portion of groceries and special shopping vouchers, as confirmed to Vijesti by the Ministry of Economic Development. The International Monetary Fund estimates that global food prices will continue to rise due to the effects of the pandemic.
By Marija Mirjačić
The Government of Montenegro expected to put a cap on the retail price of white wheat bread, following a proposal of the Ministry of Economic Development (MED).
According to the proposal, the maximum retail price of white wheat bread, weighing between 500 and 600 grams, will be 50 euro cents. As for bread weighing between 300 grams to 400 grams, the maximum price will be 40 euro cents.
Confirming this information, the MED told Vijesti that this “will help stabilize the retail price that has fluctuated significantly in the previous period, all in order to secure consumer confidence in the price of this essential foodstuff.”
The MED says that this is one of the first measures that are expected to lead to a reduction in prices of essential groceries. Regarding the prices of other foods, the Ministry announced they would soon present the conclusions of a comprehensive analysis and propose the adoption of recommendations on possible restrictions on retail margins, “especially because these products are already subject to a reduced VAT rate of seven percent, and owing to the fact that these products are predominantly imported at preferential zero percent rates of duty.”
“We expect retailers to adopt these recommendations and thus show corporate responsibility, all in order to maintain a stable purchasing power of consumers,” the MED said. According to them, market inspections will continuously monitor how these recommendations are followed, which is expected to enable the Ministry to continuously monitor and possibly devise “a different price control mechanism”.
The Government, as confirmed to Vijesti, is also planning to help the most socially vulnerable residents who will receive free cooking oil, special shopping vouchers and various other benefits.
A 2.4 percent rise from June to June
In Montenegrin retail stores, the prices of bread, flour, oil, sugar, meat, eggs, milk have all risen in the previous year. Analysts estimate that this is a consequence of a growing global demand and a declining production of sunflowers, cereals and soybeans, which has been caused by the coronavirus pandemic.
According to the latest official data from Monstat, consumer prices in June 2021 were on average 2.4 percent higher, compared to the same month last year.
“The biggest impact on the monthly inflation rate was made by the rise in prices of accommodation services, fuel and vehicle lubricants, meat, milk, cheese and eggs, catering services, sugar, jam, honey, chocolate and sweets, pharmaceuticals, bread and cereals. Consumer prices were on average 1.2 percent higher in the period between January and June 2021, compared to the same period last year,” Monstat said.
The MED says that at the height of the current rise in food prices at the global level, they are continuously monitoring the situation on the Montenegrin market. It has been found that certain food categories are seeing double-digit and even triple-digit percentage growth compared to the last year.
The rise in prices, as noted by this government department, was influenced by numerous factors that were primarily caused by the coronavirus pandemic, which also brought about an increase in the prices of transport and necessary raw materials.
“With the help of market inspection, the Ministry collects data and analyses retail margins in order to have a comprehensive insight into all factors affecting the formation of prices of essential groceries and ensure stabilization in an effective manner. It should be noted that Montenegro has so far pursued an inadequate development policy, which is why we rely too much on imports, even of those products that can be produced by domestic companies. In that regard, the conclusion of the Ministry is that we must solve the inherited problems of our chronic trade deficit through relevant development policies aimed at strengthening domestic production and export capacities of domestic manufacturers, while respecting the rules of the free market,” the MED pointed out.
Despite the fact that their mechanisms to address market anomalies are limited, this Ministry said it was preparing a number of programmatic solutions, jointly with other departments, by which they will tackle the sudden jump in the prices of essential groceries, with the aim of preventing more severe economic and social consequences.
A group of manufacturers of bakery products said last week that due to significant increases in production costs, bread price rises is are inevitable and require a thorough review of producers’ business policies, as well as better understanding of and support for retailers.
“The average price of the basic type of bread of 37 euro cents including VAT – which is the price at which bakeries sell this foodstuff to retailers – dates from April 2019. In the meantime, there has been a significant increase in the prices of energy products, flour and other raw materials. In retail establishments, the price of this bread is 50 euro cents. It is a fact that unsold bread is returned every day, so bakeries have to sell it at much lower prices or destroy it,” the group said, adding that last year they had a loss of revenues of €11 million due to the lack of tourist demand because of the pandemic, increased prices of raw materials and other inputs that affect production.
The IMF is worried about price increases
In an analysis released late last month, the IMF said that rising food prices around the world were causing public concern. The most recent data, the analysis says, show a moderation in consumer food price inflation, which would only add to the high prices that consumers in many countries already lived through last year.
“Due to various factors, it is probable that the effect would be felt most by consumers in emerging markets and developing economies still wrestling with the effects of the pandemic,” the IMF pointed out.
This international organization said that the rise in consumer food price inflation preceded the coronavirus pandemic, adding that early lockdown measures and supply chain disruptions caused a new jump.
“At the start of the pandemic, food supply chain disruptions, a shift from food services (such as dining out) towards retail grocery, and consumer stockpiling pushed up consumer food price indices in many countries,” the IMF assessed. According to the organization, prices peaked in April 2020, after which the trend was mitigated, “pushing down consumer food inflation in many countries”.
“Producer prices, on the other hand, have recently soared. But it takes at least 6-12 months before consumer prices reflect changes in producer prices,” the IMF explained, adding that transport costs have increased around 2-3 times in the last 12 months, ultimately increasing consumer food inflation.
According to data from the IMF, international food producer prices rose by 47.2 percent from their lowest level in April 2020, reaching a record level in May 2021 ever since 2014. Accordingly, between May last year and the same month this year, soybean and corn prices increased by more than 86 and 111 percent, respectively.
The IMF estimated that consumer food price inflation will rise again in the remainder of 2021, specifying an increase of about 3.2 percentage points this year and 1.75 percentage points next year.
Fidelity Consulting said that the food price index of the Food and Agriculture Organization of the United Nations shows that food was as much as 39.7 percent more expensive in May 2021, compared to the same month last year. This index monitors the monthly movement of international food basket prices.
“In 12 months, oil prices rose the most, by as much as 124 percent, sugar by 57 percent, cereals by 37 percent, dairy products by 28 percent, while meat prices increased the least – only by 10 percent,” Fidelity Consulting said.
This consultancy company house notes that Montenegro, unfortunately, is a country that is extremely dependent on food imports – a devastating fact for which we should especially thank the neoliberal economic model, which was carefully supported and selflessly promoted by the former government.
“It will take at least 10 years of full economic stability to change that model,” Fidelity assessed.
Strategic reserves are necessary
The Chamber of Commerce (PKCG) told Vijesti that the increase in the food price index of the Food and Agriculture Organization of the United Nations was mostly influenced by rises in the prices of commodities such as vegetable oils, sugar and cereals.
“Data published by this organization are encouraging, as they have revealed that in June global food prices fell for the first time after twelve months of consecutive growth, and that this index was 33.9 percent compared to June 2020,” PKCG said.
The increase in prices, the organization says, is a consequence of reduced production activities during the pandemic period, as well as a sharp increase in demand when economic activity picked up again. In addition, the rise in food prices was significantly influenced by the increase in transport costs and prices of energy products.
“Since the prices of essential groceries have risen, the Government of Montenegro should create an assistance package for the socially vulnerable population as a way to protect consumers. In addition, in these situations, there is a possibility of emergency procurement, which is applied in conditions of severe market disruptions. The Chamber of Commerce has repeatedly called for building strategic reserves of basic commodities precisely due to such circumstances,” PKCG said.
The Chamber believes that overcoming price challenges in the long run means continuing the ongoing restructuring of the economy, i.e. investing in the development of sectors offering comparative advantages (primarily sustainable agriculture and food production, energy, tourism, ICT, etc.) and expanding the scope of economic activities.
“One of the possible directions that could help stabilize the domestic prices of a number of groceries is to boost domestic food production. In this regard, it is important to support the increase of competitiveness of businesses and to strengthen export capacities. The other direction is to continue attracting foreign investments and to invest in infrastructure in order to reduce certain key production costs, but also to encourage further development of manufacturing sectors,” PKCG concluded.
Montenegrin Employers Federation: Excise taxes on fuel to be reduced urgently
The Employers Federation told Vijesti that they expect the Government to consider the possibility of reducing its participation in the formation of the price of fuel as soon as possible, i.e. to reduce excise taxes on fuel.
“The increase in fuel prices in the current economic crisis caused by the coronavirus pandemic is a move that leads to further growth in prices of many other products and services (food, imported clothing and footwear, transport services…), especially necessity goods. All this contributes to the worsening of citizens’ standard of living and additionally slows down the process of economic recovery,” the MEF said.
The Federation says that the effects of rising prices of any energy product, especially fuel, bring about an increase in other prices, often to an extent that is even higher than the degree of increase in the price of fuel.
“All this leads to an increase in prices of other products and services, which is an economic necessity that businesses are forced to accept, because otherwise, due to the negative impact of this cost (fuel prices), they will face even greater losses and greater illiquidity. Therefore, this is a forced consequence,” the MEF pointed out.
Fuel prices have risen ten times since the beginning of the year. The last price increase was at the beginning of this week. The price of a litre of fuel is now €1.42 for Euro-super 98, €1.38 for Euro-super 95, €1.21 for Euro-diesel and €1.19 for heating oil.
70 tons of oil to the socially vulnerable
Montenegro’s government has decided to classify 70,000 litres of oil, which was procured at the same time as the imported wheat, as state property and distribute it to the most socially vulnerable population categories, the MED said.
“Along with the social voucher programme, which was previously announced by the Ministry of Finance and Social Welfare, this is another social measure that we have decided to implement properly in order to maintain the stability of purchasing power,” the Ministry said, promising further measures in order to “calm” the market.
“In this way we will ensure the protection of citizens’ standard, and especially that of the most vulnerable population categories, by means of stabilization of essential food prices and other social measures, without acting repressively on the market,” the Ministry said.
As a part of the social voucher project, the Ministry of Finance will distribute vouchers worth 30, 50 and 100 euros, and it will be possible to trade with them in a market that will be selected through a public call.
Bids for providing vouchers for purchasing food products can be submitted by interested companies until 24 July, after which the Ministry of Finance will publish a list of companies that have met the requirements and conclude contracts with selected providers, within three days of the end of the public call.
The amount of loans on which businesses and citizens are late with repayment is growing. Interest rates remain high, bank profits have been cut in half, while citizens are making fewer and fewer term deposits. The crisis has strengthened electronic banking.
By Marija Mirjačić
Citizens and businesses are finding it increasingly difficult to repay loans, and high interest rates are hardly going down at all. Due to the crisis caused by the coronavirus, there are significantly fewer term savings, and mobile phones are increasingly replacing counters.
These are the key findings from an analysis of the impact of the pandemic on the economic and banking system recently published by the Central Bank of Montenegro (CBCG), which claims that its own measures and policies have largely preserved stability.
The total bank capital at the end of March 2021 was €600.4 million, which is a drop of 0.9 percent at the annual level.
Deposits at the end of March this year were €3.45 billion, having increased by €94 million in a year. Citizens had €1.77 billion on their accounts, or 51.28 percent, while businesses had €1.68 billion or 48.72 percent. In the comparable period last year, citizens’ deposits were €1.70 billion, and those of businesses were €1.66 billion.
According to the CBCG, at the end of March, total loans approved were €3.26 billion, €1.4 billion of which was provided to citizens and €1.85 billion to businesses. That is an increase of €104.6 million compared to the same period last year.
From March to the end of 2020, banks approved €789 million in new loans, more than 72% of which was granted to the business. In the first three months of this year, €238.08 million in loans were approved, up 22.95% on the comparable period of the previous year.
At the end of March, according to the CBCG data, loan arrears amounted to €177.9 million, which is an increase of €17.3 million or 10.76% compared to the same month last year. The share of these in total approved loans is 5.45 percent.
At the end of March this year, citizens were late in paying their loan instalments for a total amount of €63.5 million, while legal entities had overdue debts of €114.5 million.
“The data indicate that the banks have so far withstood the economic consequences of the pandemic and that their stability as the most important part of the financial system has been preserved,” CBCG told Vijesti.
However, economic analyst Predrag Drecun explains for Vijesti that it is logical for loans to grow, because in times of crisis, citizens and businesses use loans to protect themselves from illiquidity. However, he emphasizes that this growth alone is not a sufficient premise to draw any conclusions on the health of the economy.
“We need to see what’s behind the growth of loans– whether the level of security is of high quality, whether loans to residents or non-residents are growing, whether this a consequence of a rise in earnings or whether the base of borrowers has expanded. It is logical that increased borrowing is accompanied by employment growth. However, our credit growth is accompanied by unemployment growth. This means that we need to see who is borrowing, because it’s logical that a jobless citizen can’t easily take out a loan,” Drecun notes.
He pointed out that if you look at CBCG data, you can see that increased borrowing is predominantly caused by an increase in loans granted to the Government.
“The rise in loans in 2019/2020 amounts to €97.4 million, €45.5 million of which refers to the growth of loans given to the central government. It can be observed that loans are growing from year to year, but amounts are getting smaller. It is remarkable that there is a considerable rise in loans in the four months of 2021 compared to December 2020, taking into account the trend of the last four years. There has been an increase in loans totalling €136 million, but this growth was predominantly caused by the growth of loans granted to non-resident legal entities for a total amount of €112 million. Thus, the CBCG’s argument about credit growth is very questionable in respect of benefits for Montenegro’s economy. Residents were granted only 24 million euros more compared to the balance of loans at the end of December last year. The rise in loans to households is rather symbolic and amounts to barely €1.4 million,” Drecun explains.
He says that deposits reflect a dangerous trend for the stability of the system. In his opinion, the decline in the share of term deposits in total deposits is dramatic.
According to CBCG data, Drecun says, term deposits (whose terms and interest are known) accounted for 70.99 percent of total deposits in 2013, 39.46 percent in January last year, and 36.04 percent in April this year.
Demand deposits (with no fixed term) were at 28.79 percent in January 2013, 60.54 percent in January last year, and 63.96 percent at the end of April this year.
“The liquidity of banks is potentially at risk. Bank funds range mostly around 90 percent of the total amount of demand deposits. This means that term deposits are completely uncovered by liquid assets. Today, deposits are lower by about 40 million compared to the end of 2019. The CBCG is again consciously sugar-coating the reality by comparing growth with the worst months and years, and not with the best,” Drecun said, adding that low interest rates on savings is another cause of the change in the maturity of deposits.
The weighted average effective interest rate on savings, according to CBCG data, was 0.41 percent at the end of March this year, which is the same level as in March last year.
The CBCG, led by Governor Radoje Žugić, says that the minimal decline in total bank capital is largely due to the accounting treatment of the merger of two banks (Podgorička and CKB banks) in 2020. In addition, it did not affect the aggregate solvency ratio, which is significantly above the statutory minimum of 10 percent.
The bank’s liquidity is its ability to meet its overdue liabilities at any time. Insolvency occurs when the value of a company’s liabilities exceeds the value of its assets, i.e. when losses exceed its share capital.
“That ratio was 19.30 percent at the end of March this year. Its growth is 1.9 percentage points on an annual basis,” the CBCG explained.
The analysis has found that clients are experiencing falling revenues, reduced liquidity and more difficult settlement of liabilities, which further leads to more stringent bank conditions when granting loans, while the growing uncertainty when it comes to future settlement of loan commitments has been pointed out as a risk.
Erste Bank and NLB Bank told Vijesti that they expected a further growth of loans with late repayment of instalments, while Crnogorska komercijalna banka (CKB) did not answer this question.
“We expect a slight, but continued growth of non-performing loans, which rose from 3.2 percent to almost 4.5 percent last year, which is still substantially below the market average,” Erste Bank said. NLB pointed out that the significant decline in economic activity inevitably leads to an increase in the percentage of non-performing loans.
“Last year’s absence of tourists was felt mostly in the area of net commission income and through higher risk costs, due to the timely recognition of expected credit losses. The share of non-performing loands in the bank’s total loans at the end of March was 7.2 percent,” NLB said.
According to CBCG procedures, banks are required to set aside a reserve for each approved loan, which is used as security in case a borrower fails to repay their loan.
The total reserve requirements allocated by banks with CBCG were €182.2 million at the end of March 2021, an increase of €1.2 million or 0.7 percent on a monthly basis. Compared to March 2020, reserve requirements decreased by €74.2 million.
Drecun explains that reserve requirements have been reduced to about 70 percent of the 2019 level.
“CBCG announced that it has consciously reduced reserve requirements in order to help businesses with about €70 million. But, then we can’t talk about real borrowing growth, because that means that a substantial part of this growth was financed by reserve requirements,” Drecun explained.
Lower, but still unfavourable interest rates
Data from the Central Bank of Montenegro show that loans with a delay in repayment of more than 90 days have slightly decreased from 2.66 to 2.44 percent, which indicates that temporary measures introduced by this institution in respect of harmonization of repayment plans with expected cash flows of loan beneficiaries were appropriate.
“When it comes to future projections of trends in non-performing loans, regardless of their limited growth compared to the pre-crisis period, it can be expected that the withdrawal of temporary measures will lead to a rise in these loans, primarily for beneficiaries whose business has become unsustainable as a result of the crisis. Future trends in non-performing loans will depend on a number of factors, including the duration of the pandemic. The overall macroeconomic environment in the country is contingent on that. This primarily includes the effects of this year’s tourist season, which will have the greatest impact on macroeconomic indicators and trends in the coming period,” CBCG told Vijesti.
The Central Bank statistics show that last year there was a further decline in the weighted average effective interest rate on approved loans, which was 5.81 percent at the end of March this year, while it was 5.93 percent the year before. At the same time, the interest rate on loans granted to citizens at the end of March this year was 7.31 percent, and to businesses 4.35 percent.
Drecun points out that interest rates are unreasonably high and that they are a consequence of the ailing Montenegrin economy and the country’s high trade deficit.
“By taking certain measures in respect of the capital, the Central Bank could cause a reduction in interest rates, as it is well known that they are hefty partly due to the strict regulations it imposes on banks,” Drecun explained.
It is logical, he says, that if businesses find it difficult to repay loans due to poor results, this can also affect the loan repayment capacity of citizens who work in those companies.
One of the measures taken by CBCG to protect the banking system during the coronavirus crisis is a temporary ban on the payment of dividends to bank shareholders, except in the form of shares. This was done in order to increase bank capitalization levels. Banks reported profits of €22.7 million last year, which is significantly less compared to 2019, when they recorded a surplus of €48.6 million.
According to CBCG, the temporary ban on the payment of dividends to bank shareholders has led to an increase in the annual solvency ratio of banks from 17.40 to 19.30 percent.
Erste Bank said that the most noticeable effect of the crisis on banks’ operations was a decline in certain revenues, as well as a decline in profits of almost 60 percent in 2020.
“The major contributing factor was the growth of costs of loan loss provisions, which will remain high in this year as well. We have strengthened our financial position to meet the potentially more challenging situation, so the solvency ratio was 24.4 percent at the end of March, significantly more than the statutory 10 percent. In these circumstances, the bank’s focus is not on looking for opportunities to achieve additional business results, but on supporting clients affected by the crisis, while preserving the stability and health of the bank,” Erste Bank said.
Mobile banking
Erste Bank said that ever since the beginning of the pandemic they had been actively working to reduce the negative effects of the crisis on customers, implemented several moratoriums, suspended certain fees and charges and provided favourable loans in cooperation with international financial institutions.
“We continued to see a strong growth in the number of e-banking users, which was up 21.5 percent on the previous year, as well as a rise in the number of mobile banking users of almost 33 percent. The number of accounts was as much as 86 percent higher, while there were about nine percent more active cards,” Erste Bank added.
CKB Bank said that a decline in overall economic activity in the market had resulted in a drop in revenues, adding that the pandemic had caused new potential credit risks that were directly linked to those businesses that were most affected by the crisis.
“That is why we have set aside significant loan loss provisions”, a CKB representative pointed out.
The bank said that they had implemented all officially adopted mechanisms to help businesses and citizens (moratorium and restructuring). They also ran a “client protection programme”.
This programme, as they explained, means that they could analyse each case individually and offer a solution that best suits the client’s capabilities. Thanks to that programme, among other things, the bank avoided a significant increase in non-performing loans. CKB also recorded a growth of 25 percent in digitally active clients compared to the previous period.
NLB: We will see after the tourist season
NLB Bank said that they were satisfied with their results compared to those during the crisis. However, when it comes to regular targets, they were significantly below the planned ones.
“We expect to see the real effects of the crisis on our clients and our operation after the moratorium and rescheduling agreements end for most companies, and when we see the effects of the upcoming tourist season,” the bank said.
According to data from NLB, in 2020 they provided support citizens and businesses for a total amount of €165 million in the form of a moratorium on loan repayment, while the value of restructured loans to businesses (by means of defining more favourable repayment terms) was almost €20 million.
The bank says that they did not slow down the process of loan approval, as this segment saw a growth of 2.7 percent at the end of March compared to the end of 2020.
“Despite the negative effects of the pandemic in 2021, we have continued to have a stable performance this year with a net profit. The current circumstances have had the greatest impact on net non-interest income, which decreased compared to the comparable period of the previous year,” NLB said.
Since the outbreak of the pandemic, the bank has been trying to encourage the population to use digital banking service. To achieve this, the bank says, they have allowed customers to use those services free of charge on several occasions. When it comes to businesses, they focused on providing money for liquidity and loan restructuring.
Businesses are craving fresh money
Representatives of businesses and trade unions told Vijesti that interest rates are high and should be significantly lower to allow the effects of the economic crisis to be mitigated faster.
The Montenegrin Employers Federation (MEF) said that banks’ loan policies should take into account the present state of the economy, which is deeply affected by the current crisis.
“In these conditions, businesses have found themselves in a situation to “crave” fresh money in order to maintain their current liquidity and continue the investments which are under way. It would be logical for banks to support businesses by easing the conditions for granting new loans, particularly by reducing interest rates in order to give businesses impetus for growth again. But, since banks also want to make a profit, it is reasonable that they do not want to expose themselves to risks that are greater than the existing ones. Their loan policies remained at the 2019 level – in other words, there was no significant drop in interest rates. On the contrary, banks are even more cautious when granting loans to business, even though they have enough fresh money at their disposal,” the MEF said.
This organization says that the Montenegrin economy needs lower interest rates, but the question is how realistic this is given the current conditions.
The Chamber of Commerce believes that interest rates on loans are relatively high, adding that they still present a limiting factor for a more dynamic recovery of the economy. This body suggests that interest rates should be lower in order for business to enter a recovery phase as quickly and easily as possible.
“The current interest rate policy exhibits a significant discrepancy in the average interest rate for citizens and for businesses – of almost three percent. This can be explained by the greater risk of lending to the general population, taking into account the growing unemployment rate, the closure of small businesses, difficulties in paying wages, all of which resulting from the pandemic. Businesses are relatively well rehabilitated in terms of credit obligations with measures taken so far to delay loan repayments. A further drop in lending interest rates is necessary in order to enable stronger development of the real sector and more stable conditions for recovery and economic development,” the Chamber of Commerce said.
Union of Trade Unions: Citizens are low priority
The Union of Trade Unions says that it is not surprising that interest rates for businesses are significantly lower compared to the rate for citizens, as citizens have been low priority for years.
“Businesses are provided with numerous opportunities, both with banks and with the Investment and Development Fund. Over the last ten years, citizens have found it harder to get favourable loans than before. It is often the case now that the effective interest rate on housing loans exceeds eight percent, while the interest rate of 6.99 percent can be described as one of the most favourable. Not so long ago, it was not uncommon for citizens to take out housing loans on much more favourable terms, and with nominal and effective interest rates even below three percent. We believe that it is high time that the interest rate policy went back to the period of 10 or 20 years ago, when banks competed for each client and provided numerous benefits and relatively very low interest rates,” the trade union organization said, adding that banks took advantage of the last year’s moratorium to further increase customer indebtedness.
Pharmaceutical and IT industries have seen significant revenue gains, while hotels are spending their accumulated profits to survive. As many as 86 new companies have been founded in the IT sector, and laboratories have profited from PCR and other tests
By Marija Mirjačić
The pharmaceutical, IT and healthcare sectors are the biggest business winners on Montenegro’s disrupted economic map in the midst of the coronavirus crisis. Most other industries, such as retail, hotels, construction, transport, real estate, oil and petroleum products, telecommunications, have suffered significant losses.
This is the main finding of Vijesti’s analysis of last year’s financial reports of companies in Montenegro.
Such a picture is not surprising, given that the global economic crisis, which has been described as the most severe since the 1929 Great Depression, is the sum of the consequences of the coronavirus pandemic.
Revenues in pharmacy rose by €61.32 million
The pharmaceutical industry in Montenegro is mainly composed of trade in medicines and medicinal preparations and just one Hemofarm’s drug production plant. Most entities in this industry reported strong revenue and profit growth last year.
An analysis performed by BI Consulting, a provider of business and credit information within the project entitled “Montenegro’s 100 biggest companies”, has shown that in 2020, total sales revenue in the pharmaceutical industry increased from €320.19 million to €381.51 million (19.10%). Profits were up from €12.72 to €16.39 million (28.85%), whereas the number of employees rose from 1,786 to 1,960 (9.74%).
Data from the Statistical Office (Monstat) show that last year saw imports of €116,377 million worth of medical and pharmaceutical products, which is an increase of 8.3% compared with the previous year, when that value was 107,409 million.
The industry’s leading company, Glosarij, which specializes in the wholesale supply of pharmaceutical products, reported revenue of €84.32 million last year, an increase of 12 percent on the previous year, when it yielded €74.71 million. The Glosarij’s reported profits were €3.73 million, up 6% compared to 2019, when the company made €3.49 million.
Glosarij told “Vijesti” that their business had not been affected by the COVID-19 pandemic in 2020.
“We all know that this is a viral infection for which an effective cure is yet to be found. Also, we did not trade in COVID-19 vaccines, because this is not done through pharmaceutical wholesalers, but states instead perform procurement and distribution directly. As far as sales of vitamins and dietary supplements are concerned, we recorded a slight increase in sales, while overall growth was achieved as a result of an increased range of services and equipment,” Glosarij said.
The COVID-19 outbreak led to an increase in the consumption of zinc, magnesium and vitamin C and D supplements, but Vijesti could not obtain exact data on this. The Institute for Medicines and Medical Devices explained that they were not in charge of procuring medicines and medical devices. The state-owned Montefarm company, a pharmaceutical wholesaler with a network of 55 pharmacies, confirmed that there was a high demand for “a significant number of supplements that have a beneficial effect on the immune system,” without presenting specific amounts.
“One of the most sought-after supplements was certainly vitamin C, but also products containing zinc and selenium, which all saw a multiple increase in demand. Vitamin D in doses of 1000-10.000 units was especially popular, after it was recommended by medical experts as having a role in the prevention and treatment of COVID-19, but also as a post-Covid supplement for faster and easier recovery of patients. The turnover of this vitamin increased several times in the last year,” Montefarm said.
Montefarm pharmacies, as the company says, also recorded increased demand for herbal preparations, which “have a positive effect on immunity and boost its defensive power”.
Montefarm’s annual revenue jumped 10%, up from €73.58 million in 2019 to €81.34 million last year, while the profit for the same period fell by 31, down from €376.405 to €261,325.
The data from the analysed financial reports show that the revenue of private pharmacies also went up. According to one the chains, this was expected, because the pandemic, intensified by fear, caused the demand for medicines and medicinal preparations to increase substantially, especially in the first months.
“We had an onslaught at the beginning, but the situation normalized later,” the company management told Vijesti.
More than 120 new companies in the IT sector
The pandemic has also led to computers and laptops becoming priority devices in households, as many were and still are working from home due to the state of emergency, while children are attending classes online.
This has also caused the IT industry to generate significant revenue.
The analysis by BI Consulting also shows that the number of companies in this sector climbed from 495 to 621 (up 25.45%), sales revenue from €112.22 million to €126.048 million (up 12.32%) and profits from €9.72 million to €14.5 million (up 49.29%). The number of employees at the annual level increased from 1,512 to 2,074 (37,175%).
Comtrade Distribution, an IT company that generated the highest revenue in 2019, specializing in the wholesale distribution of computers, computer equipment and software, increased its profits from €373.403 in 2019 to €398,925 last year, which is a growth of about six percent, although its yearly revenue fell from €19.8 to €18.54 million.
Čikom, a company carrying out the same activity, increased its annual profits by as much as 60%, up from €561,678 in 2019 to €903,221 last year. Revenue was up 11 percent, from €7.88 million to €8.80 million.
Amplitudo, a company commissioned by the Ministry of Education to develop a web portal and a YouTube channel for the purposes of online teaching last year, reported total revenue of one million euros and a net profit of €197,000. A year earlier, their revenue was 925,260, while profits were €61.960.
“The main factor for the strong growth of the IT sector globally is the impact of the pandemic on everyday life and the way we use technology,” says Predrag Lešić, the CEO of DoMen company, which manages the .ME domain.
According to him, various services, such as messaging apps and video conferencing platforms, have enabled administrative and other jobs to be relocated without any problems.
“On the other hand, everything that needed to be digitalized in the course of next five years was digitalized in five months,” Lešić said.
Between March 2020 and March 2021, he says, when compared with the period between March 2019 and March 2020, 12.5% more websites were created, while the registration of domains intended for e-commerce websites increased by 23.65%. There has also been a slight increase in domains intended for blogging.
Lešić also points to the increase in domains that are registered and developed as websites and featuring words such as ‘webinar’ (19.23 percent), ‘freelance’ (9.15 percent), ‘e-learning’ (6.61 percent), ‘fitness’ (5.52 percent), ‘social distancing’ (2.83 percent) and ‘delivery’ (1.86 percent).
Coronavirus tests as a way to make big gains
Significant revenue was also generated by private clinics and laboratories offering complete examinations for those suspecting that they are infected.
Labs performing rapid antigen tests, which cost around €25, earned particularly well, while several private clinics offered PCR tests at €80.
Frequent advertising campaigns on billboards, television channels and newspapers, where PCR tests are now being offered at around €50, prove that this activity has resulted in a competitive race.
There is an especially high demand for serological tests, which are blood tests to check if a patient had an infection before. Their price ranged between 15 and 30 euros.
The Ministry of Health did not answer Vijest’s question as to how many new laboratories have been opened for the purpose of such analyses. They referred us to their website, which gives 12 addresses where a PCR test can be done.
“Of these institutions, the Institute of Public Health and the Kotor Health Centre belong to the public health system and they do not charge PCR testing services,” the Ministry said.
One of the first newly established private laboratories and polyclinics (in August 2020, in the middle of the pandemic) is Moj Lab, which is run by thoracic surgery specialist Milan Mijović. In five months, it generated revenue of €1.5 million and a net profit of €322,000.
The Institute of Public Health did not answer Vijesti’s question as to how many tests have so far been conducted in public health institutions and how many have been performed in private ones.
According to BI Consulting’s data, 86 new companies were established in the medical services sector last year, so now there are a total of 539 such companies. The number of employees in this sector has increased from 1,895 to 2,090 (10.29%), sales revenue from €39.47 to €48.65 million (23.25%) and profit from €3.47 million to €3.52 million (1.26%).
In May last year, Montenegro saw the opening of F.T.S. – a company specializing in the production of face masks. According to the Central Registry of Business Entities, its registered activity is “non-specialized wholesale trade” and its founder is Italian national Francesco Meleo. This company reported revenue of €693.380 and a net profit of €262,577 last year.
The information about this business was first made public last year by former MP and now acting director of the Revenue and Customs Administration Aleksandar Damjanović, who said that the company had not been entered in the Register of Medicines and Medical Devices.
Subsequently, the Capital City announced that they had made the first contact with the investor specializing in the production of masks at the Podgorica Investment event.
“The company “F.T.S.” bought two machines for the production of face masks for a total amount of 291,000.00 euros. “F.T.S.” is an export-oriented company, as all their main customers are from Europe and other parts of the world. It currently employs 12 workers,” the Capital City said in July last year, among other things.
Retail chains see a decline in turnover
The retail sector, which is traditionally the biggest industry in Montenegro in terms of the number of companies and employees, has seen a decrease in revenue and profits. According to BI Consulting, this area of business generates €3.4 billion, which is about 40 percent of the revenue of all companies.
The Chamber of Commerce (PKCG) told Vijesti that the decline in demand in tourism had a negative impact on retail turnover. As a result, in 2020 it fell by 16.8 percent compared to the previous year.
The highest revenue among supermarket retailers was generated by Voli, which recorded an annual decrease of about 10 percent, from €242.39 million in 2019 to €218.70 million in the last year. The company’s profits in this period were slashed by half from €4.87 million to €2.46 million.
“The drop in turnover is the lowest in the industry thanks to great commitment of our employees across all structures of the company. Taking into account our results in the previous seven years and comparing this year’s parameters with that period, it can be concluded that 2020 was extremely difficult. It is clear that 2019 was a record year for many business entities in Montenegro, including our company, so it is not a reference value with which this year should be compared,” Voli said.
According to them, falling revenues have also led to a drop in direct costs, because they abandoned everything that was unproductive. Voli explains that they used the launch of five new retail stores in 2020 and €15 million in investments as a mechanism to mitigate the consequences of the pandemic. They also emphasized that they had the support from co-owners – the European Bank for Reconstruction and Development.
Financial statements have also revealed that Mercator ended the last financial year with a deficit of €7.37 million compared to 2019, when profits were €1.042 million. Franca’s saw its profits halved – from €1.55 million in 2019 to €772,630 at the end of last year.
The oil and petroleum products sector, which features several renowned international companies, is also making poor results. Jugopetrol, which is majority owned by Greece, saw a 47 percent drop in revenue, from €159.34 million to €84.79 million, with profits also being down from €4.32 million to €2.57 million.
Hospitality revenues slashed by half
According to the BI Consulting data, the hotel and catering sector saw the biggest drop in revenues last year, by an average of 55 percent. Hotels had it worse. A big loss was suffered by the largest hotel company in Montenegro, Budvanska rivijera, which owns five hotels, whose revenue fell from €21.95 million in 2019 to €2.96 million last year (down 87 percent). This state-owned company also reduced the number of employees from 599 to 412 (32 percent) over the same period.
“For the first time since 2003, we recorded a business loss and found ourselves in a situation that presented an insurmountable challenge. Thus, the balance sheet at the end of the last tourist year resulted in a loss of nine million euros,” Budvanska rivijera said, adding that they had recorded a €1 million profit a year earlier. According to them, liquidity was preserved thanks to the accumulated profits in previous years, along with additional austerity measures, reduced overheads and a reduction in salaries. The investment momentum of almost 40 million euros from previous years has been disrrupted.
Less food and drink
The food and beverage industry has also suffered significant losses. One of the reasons is that this sector is closely linked to the catering and hotel sectors, which generally did not operate during the coronavirus crisis, which is why they did not require big orders. One of the leading companies on this market, Coca-Cola HBC Montenegro, saw a drop in revenue from €29.31 to €19.97 million (32 percent), with profits of 1.17 million in 2019 melting into a minus of €126.17 thousand last year. The company told Vijesti that 2020 had been particularly challenging for the operation of companies linked to the tourism and hospitality sector.
This has affected their business as well. Yet, they continue to be a reliable partner to employees, customers, partners and the market.
“We have taken on the burden of the crisis. In particular, we have not reduced the number of employees and their salaries, we have settled all liabilities to customers and continued to invest in the market. We collaborate directly and indirectly with two and a half to three thousand customers and by deciding to meet all obligations to them, we have supported the survival of a large number of these businesses. We felt it was responsible to continue to support the community, even though our business was severely shaken by the pandemic. Together with the Coca-Cola Foundation, we have donated 50 thousand US dollars to the Red Cross and 15 thousand litres of drinks for health workers and those working in Covid institutions,” the company said.
Another big loser from this branch is Nikšić-based Trebjesa, which ended the last financial year with a loss of about €1.37 million, unlike in 2019, when it made a profit of 3.94 million.
Direct assistance only to the most vulnerable
Aleksandar Damjanović, a former MP and acting director of the Revenue and Customs Administration, told Vijesti that he had said several times in the Parliament last year that the consequences of the pandemic were not the same for all economic activities, which is now confirmed by companies’ financial statements for the last year.
“I pointed to certain sectors, such as pharmacy, IT industry, energy… which profited in some way, while others, such as transport and tourism, were brought to their knees. That is why I asked the former government to selectively target the most vulnerable companies and support the economy. Unfortunately, that failed to happen,” Damjanović said.
He expects that a comprehensive analysis of the winners and losers of the pandemic will help define a long-term support package, exclusively for those who need it the most.
“This may include special tax measures for vulnerable economic activities,” Damjanović pointed out.
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