First Deputy PM Cacic Announces International Tender for Tourist Resort Kupar

The tourist resort complexes, Kupari 1 and Kupari 4, encompass 27 hectares of coastal property south of Dubrovnik towards the international airport in Cilipi.  The former Yugoslav Army and tourism resort was devastated during the Homeland war for Croatian independence.  The development plans for the resort include the development of five hotels  (5-star and 4-star), villas, and residential areas totalling a 2,000 bed capacity.  After complex ownership issues transferring the property to the newly formed Croatian Ministry of Defence in the early 1990s, the property is still primarily owned by the state (over 95% of property owned by the state) and managed through the State Property Management Agency (AUDIO), under the auspices of the Ministry of Economy.  Prior to the war in 1991, the complex serviced 1.5 million tourist overnights, employing 400 persons.  After returning from a business promotion visit to Antalya, Turkey, Deputy Prime Minister and Economy Minister, Radimir Cacic (HNS), announced that an international tender would be issued for Kupari in the next 60 days, searching for a strategic investment partner.  Cacic also stated that the Turkish hotel group, Rixos, the owner of the Dubrovnik hotel Rixos Libertas, is interested in the Kupari project.  According to plans by the former government and local authorities, the development of Kupari was foreseen to be offered on a long-term concession basis with construction rights, similar to the Brijuni Rivijera project in Istria.  Privatisation of attractive and valuable property and successful or potentially successful businesses is sensitive in Croatia,   similar to privatisation efforts in all European countries.  Public private partnership concessions are seen as a possible solution for projects that urgently need financial capital and sector expertise to develop.  However, the unsuccessful attempt to attract investors for the Brijuni Rivijera project through this model, due to the difficulties of ensuring financing, has proven the model to be flawed.  Therefore, it can be expected that Kupari will be offered through a hybrid model of ownership of structures and the auxiliary resort property offered under a long-term concession or long-term lease.  This expectation is based upon the statements of the Tourism Minister Veljko Ostojic (IDS) in September.  The Mayor of Zupa Dubrovacka, Silvio Nardelli, where the Kupari resort is located, emphasised that the Kupari-Srebreno tourist development project also includes the construction of a convention centre for 2,000 persons, including a 300-bed hotel.

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