Florin Krasniqi, an Albanian businessman from Kosovo living and operating in the United States, has filed a lawsuit against Montenegro for the suspension of the construction of two small hydroelectric power plants on the Gjuriçka River in Plav, in the northern part of the country.
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He is seeking more than 28 million euros in compensation, stated Bojana Çiroviq, the state's attorney representing the public interest.
"The state was sued by legal entities (Krasniqi's companies) for claimed damages of 1.2 million euros and lost profits of 27 million in connection with the contractual concessionary relationship for the construction of a small hydroelectric power plant in Plav," said Çiroviq.
As reported by Radio Free Europe (in Serbian), the contract for concessions for the construction of small hydroelectric power plants with Krasniqi's companies was signed in 2014 by the government of then-Prime Minister Milo Đukanović.
The concessions were granted for 30 years.
The data on when the contract was terminated are contradictory; the Government emphasizes the end of 2020, while Krasniqi claims the end of 2019.
Even after seven days, RFE did not receive a response from Ana Đukanović's law office, the sister of Milo Đukanović, who represents Krasniqi in the dispute with the state.
The termination of the contracts was also contributed to by protests by locals and non-governmental environmental sector in the northern municipalities of Montenegro, who strongly resisted this government project.
In addition to concession contracts, the Government provided high state subsidies to investors, which until the summer of 2019 were paid by all citizens as part of monthly electricity bills, through compensation for "encouraging the development of renewable energy sources."
Why were the contracts terminated?
According to official documentation accessed by RFE, Krasniqi's Kosovo company "Triangle" received a concession contract for the construction of two small hydroelectric power plants on the Gjuriçka River in Plav in June 2014.
However, his company claims they received the contract three years later, in April 2017.
Government documents show that "Blue Hydro Power," owned by Krasniqi, based in Ulcinj, submitted a request to the Government in 2014 to issue urban and technical conditions for the construction of small hydroelectric power plants.
In the following four years, that company received one of the two necessary construction permits from the authorities, on October 18, 2018.
Meanwhile, the construction of hydroelectric power plants was opposed by the local population and the non-governmental environmental sector.
In protests in Plav and other cities in the northern region, they claimed that "diverting rivers into pipes" would endanger the environment and "leave them without drinking water."
International organizations also supported them, while Balkanwatch, based in Prague, announced in September 2019 that "people close to Đukanović or his Democratic Party of Socialists benefited from the construction of small hydroelectric power plants."
Under pressure from local population protests, the Government decided to start the process of terminating the contract at the session on October 17, 2019.
"Considering that the concessionaire had problems with the local population, the Government concluded that the process of concluding the agreement for the termination of the contract should begin," the Government statement said, according to Plava e Gucia.
In the case of Krasniqi's company, the Government stated that contractual deadlines were not respected.
What does Krasniqi's company claim and what does the Government say?
On the other hand, Krasniqi's company claims that the state is responsible for terminating the contract.
They say that on December 9, 2019, the Ministry of Economy informed them in a letter that the Government had tasked them with initiating the negotiation process for terminating the Contract.
"The Government initiated the process of negotiations for the termination of the Contract and chose the judicial process, without an alternative," said Krasniqi's company.
In the Government's official documentation, on the other hand, December 2020 is mentioned.
As they say, Krasniqi himself informed the state through his lawyer's office about the termination of the Concession Contract on December 4, 2020.
That day, the government of Zdravko Krivokapić was elected, after Đukanović's Democratic Party of Socialists lost the elections three months earlier.
The process of terminating the contract was completed by the Government of Krivokapić on December 30, 2020, approving the information stating that "the concessionaire did not provide a bank guarantee in the amount and within the deadline specified in the contract, for this reason the conditions for terminating the contract have been met," reported Telegrafi.
Then Krasniqi filed a lawsuit against Montenegro.
What do the minutes say?
Even after several days of telephone correspondence, RFE has not managed to obtain any comments from Florin Krasniqi.
His company has not specified the amount Krasniqi is claiming from Montenegro.
"Our response is clear, the amount will be determined by the expert appointed by the court," they emphasized in their response to RFE.
The expertise showed that due to the suspension of construction, Krasniqi's "Plava Hydro Power" lost around one million euros in real profit and over 21.5 million unrealized, because the concession was for 30 years.
The representative of the state's interests in this disagreement opposed that finding.
She requested, and the court approved, additional reports from experts, Çiroviq told RFE.
"The expertise procedure is underway as well as the completion of the expert's findings in accordance with the state's objections. The expert's report included legal services, translation services, financial consultancy as well as payments made by third parties and not by the prosecutor, which we consider unfounded," emphasized Çiroviq, reported Telegrafi.
The next trial is scheduled for the end of May.
What do the residents of Plav say about the dispute?
Ramo Gutiq, director of the non-governmental organization "Let's Save the Rivers of Montenegro," a resident of Plav and a participant in the protest against the construction of small hydroelectric power plants on the Gjuriçka River, believes that Krasniqi has no legal basis to seek compensation from the state.
"Because the source of the Gjuriçka River, where Krasniqi was supposed to build two hydroelectric power plants, supplies the entire population of Plav with drinking water. Just this fact shows everything," he said.
Gutiq also says that all concession contracts and supporting documents of investors, including Krasniqi, are invalid because they do not correspond to the situation on the ground.
"That documentation was not done according to professional rules and conditions on the ground, but for money. Especially environmental studies were done haphazardly," says Gutiq.
He argues that those who signed them should be held accountable for the permits granted.
Gutiq also says that, despite their struggle, two small hydroelectric power plants are operating in the Bjeshkët e Nemuna National Park.
"One is in Babin Polje, and the other is in the place Jara, in the east of Plav on the border with Kosovo. The resources and reservoirs of those small hydroelectric power plants are in the area of the Bjeshkët e Nemuna National Park," Gutiq concluded.
Overflow of Lawsuits
Florin Krasniqi is not the only one who has sued Montenegro for unrealized business with small hydroelectric power plants.
So far, nine former concessionaires have sued the state, confirmed in the Economic Court.
"I am in the process of nine civil procedures, to determine the termination of the contract, compensation for actual damages, and lost profits. Considering that these are legal matters that have not yet been legally concluded, we cannot provide more detailed information," said court spokesperson Vladimir Bulatović.