Republic of Montenegro: Public Expenditure and ... - Vlada Crne Gore

102 Annex 4
with EU standards and directives, was defined as an important role for transport facilitation. The
following sections present for each sub-sector the important new reforms and laws.
Road Sector
The transport regulatory framework is being renewed in order to introduce the main
principles of liberalization, fair competition, and privatization, in line with international
standards. Up to 2004, the Administration for Maritime Security, the Directorate of State
Roads, and the Directorate of Highways were under the supervision of the MMTA,.The
Directorate of State Roads in charge of road maintenance, improvement and construction. The
relevant changes to the regulatory framework for transport are summarized below:
• A new law on State Roads was adopted in mid 2004 to harmonize the national law with
European directives. This established the Directorate of Public Roads (DPR) as the unique
body in charge of managing, maintaining, and building State and regional roads. Local roads
remain under the responsibility of municipalities.
• In January 2005, the new law on State Roads was implemented and the new Directorate of
Public Roads became operational as a line department of the Ministry of Maritime Affairs
and Transport, fully regulated by public administration laws and regulations.
• The former Directorate of Highways Construction is in the process of being transformed into
the Sozina Tunnel Management Company, and after completion of the ongoing Risan-Vilusi
project, it will cease to be involved in any road contracts.
• The Directorate of Public Works (DPW) is in charge of professional activities relating to
construction, and reconstruction of facilities of primary technical infrastructure, SOE
facilities, health, education, culture and sports complexes. After the enactment of the new
law on State Roads, the DPW became less involved in the construction of highways but
remained involved, when requested by municipalities, in the construction of roads that
connect municipalities to the trunk road network, as well as roads that connect municipalities
to villages. The Local Roads maintenance, improvements, and construction are under the
responsibility of the municipalities.
The planning and budgetary process in the sector is weak, with a number of deficiencies that
undermine the efficiency of expenditures within the sector including, inter alia: (i) the absence
of a sector policy and strategy for development; (ii) weaknesses in project identification and
assessment; (iii) poor budgetary control; and (iv) limitations in the management of the assets in
the sector.
There is a lack of professional management of assets in the sector. In the road sector, there is
little regular monitoring of the condition of the assets, there is no road and structure inventory
database, and the little information that is gathered on traffic volumes and axle loads is done in a
less than systematic and robust manner.
Accordingly, the limited use of formal techniques of economic appraisal in project
identification and prioritization is one of the main weaknesses in the budgetary process.