The Port of Bar is intending to increase its capacity to ten million tons. What is its current capacity and what are the investment projects that you are currently undertaking in order to achieve greater capacity?
The capacity of Port of Bar today stands at five million tons of annual return of all types of cargo; general, liquid and bulk. With this capacity, Bar is not a large port and that is why we intend to reach ten million tons annual capacity. By achieving that, the Port of Bar will become one of the central points in southeastern Europe. In reference to the investment that you mentioned we have a catalogue of projects that we have planned.
We have three type of projects, first: a group of projects in reference to the modernization of organization systems in order to reach the international standards. Heading in this direction we realized that the information system development project and the integral communication network for the port is pure electronics. Because of that we chose a communication holding that will be in charge of all the instruments that will be implemented, for example: fire fighting, cameras and sensors that will prevent thieves and will keep track of all the workers.
The next project was to win the international certificate, it started two years ago. A month ago we had the inspection from Geneva, that emits international certificates and we were successful.
We have a new project of privatization and modernization and we are looking forward to reach a decision in September for easily entering the process of privatization. Easily, meaning step by step, because the port can not be transformed overnight. The main element in the process of privatization is to have foreign investors. On the basis of additional investment we will create joint ventures, lease the space, and propose other modern ways of co-operation.
This first group of projects is especially important for us and we especially emphasize the strengthening of the young personnel. The second group of projects is a result of the marketing analysis we carried out, considering our invitation area, Serbia, Vojvodina, Kosovo, and southeastern Hungary. We came to the conclusion that in the future when this area will be more activate and we could be very competent in the field of exporting agriculture goods. Regarding these issues we made several projects, a project on constructing a cattle terminal for exporting livestock into Arabic countries. We have a refrigerator for fruits with the capacity of thirty thousand tons, for both fruits from the south and continental fruits. The full implementation of these projects will be the task of the foreign investor and his domestic partners.
The third group of projects is dedicated to foreign investors completely. They can choose either trained or untrained areas according to their plans.
In addition to these new projects, with the completion of construction of some areas, it would be possible to reach unexpected results.
One of the first things that the investors will consider when thinking about joint ventures with the Port of Bar is its financial health. What are your financial results for this year, and your predictions for the years ahead?
Going back ten years, the position of the port, being also ten years of contribution of my work. I started from June 3, 1991, as general manager of the port. From then to May 1992, when the sanctions were put on Yugoslavia, we had very good results. During the period of January 1st to May 20th 1992, before the sanctions were imposed, we reached a turnover of 1750 million tons and in case we could continue like that we would have reached three million tons.
Unfortunately after that we had a period of three years of sanctions; it is to even a bird wasn't able to enter the port. How did we survive? Well we didn't ask the government for help, but we survived and came out better then we expected. We reconstructed 24 km of railway in the port, then we constructed the timber terminal, and completed other jobs. After the sanctions we started to work with the annual overturn of 1.5 - 2 million tons up to 1998. During this period we financed everything in Dinars, but we got paid in foreign currency, and we put this money aside.
Last year we had a turnover of 1.4 million tons which is the very minimum.
This year is continues the same, approximately 100 thousands tons a month. It's interesting that it is mostly general cargo, which is very expensive to handle. That is why we are not in a bad financial state. We didn't have any losses, if we do not take into consideration the sixty million dollars we owe to the World Bank. This is from the time when the port was constructed that we took a loan of thirty million dollars. After the earthquake of 1979 we were forced to take an additional thirty millions. So this means that we have a double loan on the same capacity. If any reader of www.World Investment News Ltd.com is working at the World Bank, please emphasize that it would be fair of them to write it off.
The financial situation is rather good. Even though in the mean time we had a misfortune: in 1998, the main breakwater of the port was partially destroyed in a storm, and as you probably know, if there is no breakwater, there is no port. We had to join with the Croatian firm Congrad Split. This investment cost 23 Million DM. The European Investment Bank has secured for us 6 Million Euro for reconstruction. This investment was essential for us, thus exhausting our small resources. The money coming from the European Bank is greatly appreciated.
What have you been doing in trying to increase the efficiency of download and upload at the port?
In two and a half years, on three different occasions, we purchased new equipment for 1 Million DM each time. It was inevitable. We purchased new Electro-fork-lifts, and a self-sufficient crane, from Demag-Germany, costing nine hundred thousand-DM. Over this period of three years, we have purchased very useful equipment that has increased our productivity. We have highly qualified workers, who are well rewarded for their work.
We have 20 vessels outside and 10 in the port and we are able to work with them very effectively. We are able to maximize the efficiency of the work by moving ships in and out of the port as soon as the upload/download is done. With all the old and new equipment we are able to satisfy the capacity of 5 million tons. | Bar is the central point of all the goods coming into Kosovo. How will you promote the Port for the transport of merchandise towards neighboring countries in order to position the Port of Bar for the future?
Port of Bar is one of the centers for southeastern Europe, the other is Thessaloniki. Though Albania is near by, with its port of Drac, it only has the depth of 8 m, so big vessels cannot enter it. The cooperation of Serbia with Kosovo, or Macedonia and Greece is not on a wide basis. However, the Port of Bar is connected with Belgrade, Subotica and Budapest by railway. We are now preparing a presentation of the port in order to acquire new contacts with the area above Herzegovina, that belongs to the Republic of Serbia, and to the Municipality of Tuzla. Though there is a lack of railway on the Serbian territory, we are the port that covers most of the territory in this area.
What is The Port of Bar doing within this geopolitical situation in order to establish strong relations with international ports in countries such as Italy, France and some "sister ports"?
The Port of Bar is connected to some Italian ports, with regular lines. We have the line Bar-Bari on a daily basis. We have vessels going on a weekly basis to Bar, Krk, Malta, to Italy and to The Croatian port Rijeka. Our relations with the port Coper, with Slovenia are strong and friendly since the port of Coper was constructed the same time as the Port of Bar. We are co-operating with the ports of Venice, Bari, and Ancona.
How are you now looking to develop the city of Bar, which is the offshore zone. This is something that will also help in the development of the port, what is your role in the promotion?
This is a special project of the Port of Bar. First of all we declared the whole territory of the Port of Bar a duty free zone, with the approval of the government of Montenegro. Now we are working together with government of Montenegro on the regulation, law of the free trade zone. Also according to the federal law Of Yugoslavia we have made the zone a free trade zone. It is now known that the Port of Bar is a free trade zone, this information was put also on the Internet and it has received wide interest across the world.
The most interest comes from our partners from Germany, Italy and France. We expect our German partners will organize new production in the free trade zone in September. It is important to know that in Montenegro the maximum customs fee is 5%. Concerning the customs we are not very attractive to the EU countries. However, for the Asian countries it is very important to have the custom percentage at the level of only 1%. When we ask ourselves what is in the interest of our foreign partners, the answer is cheap labor, tax free profits.
According to our legislation the foreign entrepreneurs are not obliged to pay taxes for ten years. I personally think that it should be changed to 3-5 of tax free profits and the other 5 years 50% of the tax should be paid.
Going back in time, when the monarchy of Nikola Petrovici ruled, he wanted to have the port here. This is history already, but do you think that now a new chapter in the history of Bar has begun?
Since you are interested, let me tell you a bit about the history of the port. The Port of Bar has existed as a wooden port for centuries, and many armies concurred it until the Turkish army came and ruled here until the Berlin congress in 1878. It was the time when king Nikola won the cities of Bar and Ulcinj. The Berlin congress imposed the ruling of the Austro-Hungarian monarchy here for about thirty years and it lasted until 1908 when king Nikola annulled the agreement. For about 200 years, Montenegro as a small state had survived a lot of wars, but never gave away their freedom. King Nikola started the construction of the Port of Bar in 1906, he built the base of the 270 m long breakwater along the shore. King Nikola was a modern man. He built it on a joint capital with Italy. The incomes for the part of Montenegro he secured by imposing monopoly on tobacco. The first year the tax was very high, but later on he lowered it. People, after the first year started growing tobacco and the money was used to finance the participation of Montenegro in the construction of the port. With this money he built the Port of Bar, the railway Bar-Virpazar, and started sailing across the Scadar lake. He considered the Port of Bar as a free trade zone, for the free-flow of merchandise and people. We are starting a new renaissance of King Nicolas ideas right where he finished his.
King Nikola had a modern view of the future and we are trying to implement his ideas almost a century later. This is the answer to your question
Could you tell our readers something more about your working experience in the port, and before you started working here?
After graduating from the university I worked in the steal plant "Niksic". I worked there for about three years and I can say I gained a great knowledge, it was more of a school for me then a work place. After six months I was appointed chief of sale. Later on, I worked in an investment bank, when the Aluminum Company KAP was built. I worked there for about five years. After that I spent thirteen years in federal organs, like the council of the Prime Minister for economic issues, and I was also Minister of Economy. New people came in 1992 and many workers were removed from their positions. I was one of those. Later on I started working in an institute for small business, and luckily I got a one-month stipendium in the USA, through the American Cultural Center in Podgorica. To be honest, it has changed my mind completely. I got a whole new view of the world. I saw what real market was about and what it meant working in that field. After coming home I joined the refractors here in Yugoslavia and I am still doing that job today.
What would be your final message to the readers of "Forbes" magazine?
The Port of Bar is a company in development and progress. Of course primer to this we have the political problems in the region. A message to the business world, who is interested doing business in the Balkans should be: come to the Port of Bar, they will receive all the information they need about the economic situation and they will see everything with their own eyes.
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