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Contract for electricity power line signed by Abruzzo, despite the shadows hanging over Djukanovic

Gennaro Varone, magistrate from Pescara, has opened an investigation into the gigantic financial operation surrounding the project for laying a cable link for sending electricity from Montenegro to Italy. To Abruzzo, to be specific. At the moment no one has been charged, but it's early days yet.

The signature of the Italian Minister for Development, Paolo Romani, is only the most recent event in a long story begun in 2007. The agreement with the government of Montenegro stipulates that from 2015 a one thousand megawatt new power line will connect the two countries, cutting around 225 million Euros a year from Italy's energy bill. The Italian side of the consortium is represented by Terna (investing 760 million Euros), while the Montenegro side is in the hands of CrnoGorski Elektroprenisni Sistem Ad (CGES) who will put in 100 million Euros, with the Montenegro government as guarantor. Work will begin in 2011 and the total length of the completed power line will be 415 kilometres. Of these, 390 will run beneath the sea with – according to the construction companies – zero environmental impact, while of the remaining 25 kilometres 15 will be in Abruzzo e 10 in Montenegro. The 15 kilometres in Abruzzo are the first problem: according to environmental activists they will brutally mar the landscape of the Maiella National Park.

The controversy does not end here. A committee has been formed in Pescara, with the aim of opposing the project and its connected public works, on the grounds of lack of public benefits. The Centre-left opposition in the city's municipal government, backed on this occasion by supporters of Gianfranco Fini and various independents, have requested the mayor of Pescara and the President of the Regione Abruzzo to revoke the local government rubber stamp dated 3 November approving its protocol agreement with Terna concerning the power line. This important official act was not submitted to the town council for approval, as it should have been, but was hushed up and carried out without debate. It established the amount of four and a half million Euros as territorial compensation for the work carried out. A sum decided upon in a totally arbitrary manner, according to the opposition. However, Terna CEO Flavio Cattaneo – Director General of the RAI Italian state TV from 2003 to 2005, and known to be very close to premier Berlusconi – promises that the realisation of the project will give work to no less than sixty local companies, and create over two hundred permanent jobs once operational.

That remains to be seen. But meanwhile Cattaneo (and Terna) have wrapped up a very big package, since the cable project is only the first step in a much broader framework agreement between Italy and Montenegro: this will see Terna purchase 22% of CGES; Italferr will build the railway between Belgrade and the Montenegro port of Bar; ENEL will construct a hydroelectric plant, and A2A (the stock exchange-quoted consortium of Lombardy municipal companies) will build a further four hydroelectric power stations. A2A , a money-spinner closely linked to the Northern League and to Berlusconi's party, has also booked a place for itself in the front row of the refuse disposal business in this ex-Yugoslav republic and has purchased a 43% stake in the Montenegro public energy company Elektroprivreda.

This introduces another murky area in the network of dangerous liasons between Podgorica and Rome. Of the 450 million Euros invested in the privatisation of Elektroprivreda, at least 300 have been paid into accounts in the Prva Banka, a banking group controlled by Aco Djukanovic, the brother of the Montenegro Prime Minister Milo Djukanovic, who is also a major shareholder in the bank, as is his sister Ana. In 2008 the same bank was saved from collapse by massive government funding. Opposition parties in Montenegro are protesting vigorously, denouncing a “hasty and shadowy deal” sponsored by Berlusconi and favouring the powerful Djukanovic clan.

Excluding one or two presidents of ex-Soviet republics, Milo Djukanovic has few rivals among world leaders for the degree to which he personifies and personalises the running of his country. At the end of the 1980s, only just fifty years old, he began to emerge in the front ranks of the Montenegro Communist League. An economist by training, he rose to become right-hand man to the president at the time, Momir Bulatovic, backing his line of maintaining the federation with Serbia at all costs. After the war, however, he relegated Bulatovic to the sidelines and took his place, becoming a fervent anti-Milosevic figurehead. At least in theory, because in practice – via the Serbian wheeler-dealer Stanko Subotic – he continued to do very lucrative business with the Serbian president, who would die in his prison cell in The Hague in 2006. In the same year Djukanovic steered his country to severing ties with the Serbian Federation and declaring its full independence. In the this period, however, investigating magistrates in Bari and Naples identified him as the boss of a huge contraband cigarette organisation. In 2005 an international warrant for his arrest was actually issued, but his institutional position guaranteed him personal immunity.

 

Last August the New York Times published an investigative articles describing Djukanovic as a ruthless operator running the country for his own benefit and that of his clan. He denies such charges, naturally, as he had previously rejected in scathing terms the Reporters without
Frontiers
2010 report that placed Montenegro in 104th position in its press freedom list. According to this NGO Djukanovic and his cronies have gagged opposition papers such as Dan and Vjiesti, and the weekly magazine Monitor, by threatening them with fines up to 13 million Euros for “moral damages” to the premier and his family. The editor of Dan, Dusko Jovanovic was murdered in May 2004, in a case that has never been solved.

 

Transparency International, a NGO focusing on monitoring corruption around the world, also offers a damning analysis of Montenegro, a country that nevertheless continues to attract billions of Euros of foreign investment thanks to its nine percent tax rate and nebulous controls. As was evident from the lavish Russian capital of uncertain provenance that was used to swamp the coastline in cement and start constructing extra-luxury tourist ports and resorts.

For all these motives, the links between Italian politics and Djukanovic are at the very least open to doubt and discussion. It should be added that the first agreement with the Podgorica government for the cable link was signed in 2007 by the then Minister for Economic Development Pier Luigi Bersani, the current leader of the opposition. The key accords, however, were signed when Scajola was minister in Berlusconi's government, and now by his successor Romani. In between came Berlusconi's visit to Podgorica where – lavished with a triumphal hero's welcome – he publicly declared his friendship and respect for Djukanovic. For the moment the Pescara magistrate's office is investigating, but the waters of the Adriatic are looking distinctly murky.

Christian Elia