Montenegro, The law must be equal for all, including the Port of Kotor

Published on 27. March 2023., News

Statements by the Port of Kotor regarding the provision of port pilotage services in the Bay of Kotor, which disregard court and other competent authorities’ decisions, do not support the preservation of the port’s business reputation of national importance, the Ministry of Capital Investments announced.

The MKI said that the Increasingly frequent public appearances of the Port of Kotor do not send a message to the general public that should be sent strongly – that the law is equal for everyone, that there are no privileged ones, and that the share of the state or the municipality in the share capital cannot in any way mean the right to derogate from laws and court decisions.

– MKI will certainly maintain the position that the law is the same for everyone, even for companies in majority state ownership – it is stated in the press release of the MKI.

From that department, they said that it would be responsible for the Port of Kotor to pay attention to illegalities for which the appropriate laws prescribe and determine responsibility before making a public appearance.

– Also, we would like to remind that the Government entrusted the concessionaire Port of Kotor through the Institute of Priority Concession, i.e. without a tender procedure, an extremely valuable state resource to manage, i.e. port infrastructure and water area, for the sake of quality and legal performance of concession activities. In doing so, the Government was particularly guided by the fact that the right to use the port area and the right to carry out concession activities is ceded to a company that is majority-owned by the Municipality of Kotor, and it rightly expected that the Port of Kotor would show an increased level of social responsibility and set a positive example for other concessionaires. In Montenegro that the obligation to respect the applicable law is the same for everyone, without exception – the announcement states.

The MKI pointed out that the port service is primarily a port pilotage service, the main purpose of which is to ensure safe navigation in the Bay of Kotor and in the water area of the Port of Kotor, and the concessionaire should not under any circumstances consider it as a priority commercial service, and especially should not restrict or prevent the provision of this port service, as it potentially endangers the safety of navigation.

The Ministry of Interior reminded that the Administration of Maritime Safety and Port Management on behalf of the concessionaire of the Government, in accordance with the Law on Concessions, the Law on Ports and the Government’s decision on granting a concession for the provision of port services – port pilotage in the Port of Kotor and pilotage in the Bay of Kotor, with the Port of Kotor and concluded concession contracts with Sea Pioneer Montenegro from Herceg Novi in 2020.
– According to the lawsuit of the participants in the tender Boka Pilot & tug boat services from Bijela, the Administrative Court annulled the decision of the Government on the award of the concession on the basis of which the relevant concession contracts were concluded in a judgment from April last year. Bearing in mind the legally binding judgment of the Administrative Court of Montenegro, and the obligation to respect and apply legally binding court decisions, the Maritime Safety and Port Management Authority and the Ministry of Capital Investments have, precisely with the aim of overcoming open questions regarding the performance of pilotage operations in the Bay of Kotor, sent explained information Government – it is stated in the announcement.

With the information in question, the Government is aware of the fact that the Administrative Court annulled the Decision on the award of the concession, as a result of which the previously concluded concession contracts with the Port of Kotor and Sea Pioneer Montenegro became absolute null and void.

– After considering the information in question, at the proposal of the MKI, the Government adopted the information on the annulment of the Government’s decision at the end of last year and tasked the Administration of Maritime Safety and Port Management to prepare, without delay, proposals for a concession act and a concession contract for the provision of port services – port pilotage in the port Kotor and pilotage in the Bay of Kotor, and to undertake further activities to ensure the provision of port services – port pilotage in accordance with the law – they reminded from the MKI.

Against that conclusion of the Government, the Port of Kotor filed a complaint with the Administrative Court, whose proceedings are ongoing. After that, on February 9, the Government annulled the conclusion from December. In this way, the Directorate of Maritime Safety and Port Management and the relevant Ministry are prevented from executing the court decision, i.e. in the repeated procedure for awarding a concession for the provision of port pilotage services, after the tender procedure has been carried out, to propose to the Government the adoption of a new, legally based Award Decision concessions.

– Bearing in mind that invalidating the conclusion in question in the port area complicated a number of open issues, the MKI addressed the General Secretariat of the Government with a request to provide clear instructions on further action, on February 20. To date, the General Secretariat of the Government has not given any guidelines or instructions for overcoming the situation that arose by invalidating the Government’s conclusion – the MKI said.

The MKI and the Maritime Safety Administration continue to maintain that the concession contracts with the Port of Kotor and Sea Pioneer Montenegro are absolutely null and void after the court decision annulling the Government’s decision to award the concession, and that by preventing the implementation of a new procedure for awarding the concession for the port service at the same time, the application of the law, as well as the execution of the court decision, prevents the pilotage.
– In relation to the allegations of the Port of Kotor, we point out that this company currently only has a legally valid preferential concession contract, which does not entrust this company with the right to provide port pilotage services. The concession agreement for the provision of port pilotage services, concluded between the Port of Kotor and the Maritime Safety and Port Management Authority, as well as the agreement with another concessionaire, are no longer in legal force, are absolutely null and void and no longer produce legal effect – the statement specifies.

In the area of the Bay of Kotor, no company that meets the conditions prescribed by the Maritime Navigation Safety Act for the performance of pilotage operations has been granted a concession, so in a formal and legal sense, all three companies that have the appropriate approval of the Ministry are in an equal legal position.

– Therefore, the Port of Kotor does not, on any basis, have more rights or a different legal basis for providing port pilotage services in relation to the remaining two legal entities that meet the requirements prescribed by law – said the MKI.

Until the award of the concession in 2020, the Port of Kotor, like other companies that provided that service, worked without an assigned concession and also denied the state budget for income based on the performance of this concession activity, expressed in the form of fixed and variable concession fees, so that they were not accurately states that the Port of Kotor suffered any damage during the tender procedure, which was prolonged because the Port of Kotor constantly sued the state.

– On the contrary, the Port generated significant revenues based on the provision of this service without an assigned concession, and accordingly it did not pay the state either a fixed or variable concession fee – the statement added.

There are no allegations that the MKI, as they said, contributed in any way to the situation that is now current, while they remind that it was the Port of Kotor that sued the Government because of the conclusion from December 2022, seeking its repeal, which is actually should enable the introduction of port service provision within the legal framework and in accordance with the court decision.

– Therefore, let the public appreciate why the Port of Kotor is suing the state in the first place because of the conclusion that would enable a new tender procedure and the conclusion of new, legal concession contracts, which would bring order. By now, a public invitation would have been issued if the conclusion had not been repealed, and then, after the Government did exactly what the Port of Kotor requested, it is trying to mislead the public that the MKI is responsible for the situation that resulted from the repeal of the conclusion in question – it is stated in the announcement.

It Is untrue, as they said, that the Board of Directors of the Port of Kotor initiated any meetings with the MKI or with the competent Directorates on this topic, and that they were not answered. On the contrary, the current convocation of the Board of Directors has not yet addressed the MKI with a request to hold a meeting on this matter.

– There are numerous complaints about the operation of the Port of Kotor, in relation to which the Maritime Safety and Port Management Authority and the MKI requested a statement from the concessionaire, so that in the further process they could assess whether the concessionaire respects the provisions of the preferential concession contract, i.e. whether it respects and applies applicable law – said the MKI.

In accordance with the Law on Ports and the Contract on Priority Concession, the Port of Kotor is obliged to act in accordance with the applicable regulations, and the violation of this contractual obligation may lead to the withdrawal of the concession.

– The Port of Kotor sent, the day before the Government’s decision was made on February 9, i.e. on February 8, a notification to all port agents that they can use the services of all three pilot houses exclusively on the route of the Kotor port’s non-stationary area granted to the concession of the Port of Kotor company, after which the piloted ships will to be taken over by the authorized pilots of the Port of Kotor company, which represents a kind of abuse of the rights entrusted by the preferential concession contract. This right is not entrusted to the Port of Kotor in any way and it cannot on any basis assume the role of a regulator in the market, nor force port agents to hire only pilots employed in the Port of Kotor, thus eliminating other companies that, just like the Port of Kotor they have the approval of the Ministry to be able to provide port service – port pilotage – specified from the Ministry of Interior.

There are numerous examples that point to the well-founded need to initiate increased supervision over the execution of preferential concession contracts.
– The Port of Kotor did not submit a statement to the Directorate of Maritime Safety and Port Management as well as the MKI, and despite sending inquiries, on what legal basis the Port of Kotor as an operator, when applying the Law on Border Control, refuses for months to issue ID tags to the port agents, even though they have fulfilled all the conditions prescribed by the law, thus preventing them from the rights guaranteed by the law, i.e. preventing them from accessing the port area and the ship. Also, there was no answer on any grounds, the Port of Kotor, contrary to the law on administrative fees, instead of the legally prescribed administrative fee in the amount of five EUR for issuing an ID tag to a person who performs activities in the area of the border crossing, illegally charges port agents EUR 20 – it is stated in announcement.

The complaints of the port agents, unfortunately, also refer to the indication that after accepting a cruise ship with, say, around two thousand passengers, the Port of Kotor, as a port of national importance, keeps locked the premises in the port area intended for the satisfaction of basic hygienic and physiological needs, and is for passengers with cruise ships are thus prevented from using them.

– Regarding the alleged exclusive right of the Port of Kotor to provide the port service of port pilotage, i.e. to condition shippers and agents to the provision of services by this company, the Agency for the Protection of Competition has already decided, when it passed a decision in 2019 and established that the Port of Kotor had abused its dominant position from the Law on the Protection of Competition, which prevents, limits or distorts competition on the relevant market of port services-pilotage, so that since May 2015, i.e. the period since obtaining approval for the performance of pilotage jobs for three pilothouses Sea pioneer Montenegro, Boka pilot & tug services and the Port of Kotor in the Bay of Kotor, until the fulfillment of the measures ordered by the agency’s decision from October 2016, conditioned the provision of mooring services within the water area of the Port of Kotor to the performance of port services-pilotage exclusively by the pilot service of the Port of Kotor – said the MKI.

Namely, by the said decision of the Agency for the Protection of Competition, the Port of Kotor is prohibited from any future actions that could prevent, limit or impair competition by abusing a dominant position.

– By the same decision, the Agency ordered the Port of Kotor, among other things, to inform maritime agencies, i.e. shipowners, about the right to independent and free selection of business entities that provide port pilotage services in the port of Kotor on an equal and non-discriminatory basis, and it was ordered to inform maritime agencies, i.e. shipowners that the Port of Kotor does not have the exclusive right to provide pilotage services, and that the other services it provides are not and cannot be directly related to pilotage services – the statement concludes.