Montenegro agrees 90-year lease with Azerbaijan's SOCAR.

By bne IntelliNews July 6, 2012
Montenegro's privatisation council has advised the government earlier this week to sign a 90-year leasehold agreement with the State Oil Company of Azerbaijan Republic (SOCAR) for the former military barracks Orijen Battalion in Kumbor. Under the deal, SOCAR is obliged to invest EUR 52mn into development of a tourism resort during the first four years of the lease and EUR 258mn during the first 8 years of the lease, the government said in a statement. The final investment plan for the development of the resort will be adopted after the approval of a state location study. The company will pay a fixed rent in the first 45 years of the lease. The lessee has to provide a EUR 3.6mn performance bond for the agreed investment, while in case of lease termination the lessor would keep the paid rent in advance, the statement said. The rent consists of two parts - a fixed rent of EUR 1 per square meter and a variable rent of 5% of the profit. The parties agreed that the lessee could establish a local company in Montenegro, which will take all rights and obligations under the lease contract.
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