Thursday, 25 April 2019

A Tale of Concessions and Politics - Dubrovnik's Cable Car Closes

If there's one thing Dubrovnik is good at, other than walls, history, and all the rest of it, it's getting in arguments with itself.

The city that needs tourists but often doesn't really treat them how they should be treated, the city that wants cruise ship money but must also cap vessel numbers, the city full of residents who can barely breathe for being squeezed out of their homes during the summer months but with a local government unit who claims to want to tailor the city to their needs.

The Pearl of the Adriatic is a strange place and paradoxical in many ways and in a multitude of ways, its sheer beauty is only skin deep. 

The cable car, one of Dubrovnik's best attractions which rakes in eye-watering amounts of money per year, transporting hoards of view-hungry tourists up and down the majestic Srđ mountainside to the very top of the rugged mountain which towers over the city, after making them wait in the boiling hot sunshine in a long queue without any shade first, of course, has ceased its functions after much back and forth between the city and the company it belongs to.

As the stunning City of Dubrovnik appears on more and more humiliating ''avoid during summer'' lists published by major travel portals, it seems that its case of victimhood to its own popularity is becoming the least of its problems.

As Marija Crnjak/Poslovni Dnevnik writes on the 25th of April, 2019, the decision to ban the carriage of passengers by cable car up to the top of Srđ was issued in accordance with the provisions of the Law on Concessions.

Inspectors from the Customs Administration of the Ministry of Finance of the Republic of Croatia issued a decision today on the ban on carrying out the activity of transporting passengers from Dubrovnik to Srđ by cable car, which is owned by the Excelsa Nektetnine (Real Estate) company, which belongs to the well known Lukšić family.

The decision to ban the carriage of passengers by cable car has been issued in accordance with the provisions of the Law on Concessions, and is based on the fact that the company doesn't have a concluded concession contract. The company claims that the City of Dubrovnik never delivered such a contract after that law was passed.

Otherwise, the aforementioned company claims to have been seeking a concession from the City of Dubrovnik since as far back as 2015.

"We're extremely disappointed that the Customs Administration closed the cable car on Srđ today, after nine years waiting for a concession from the Republic of Croatia and the City of Dubrovnik. This decision will jeopardise a significant number of jobs at Excelsa Nekretnine and its 343 business partners, of which 130 are from Dubrovnik. More than 1400 Excelsa Nekretnine shareholders will suffer, including more than 300 from Dubrovnik.

Damage will also be felt by the state, and by the city and its citizens. The state budget will remain without tax revenues, the City of Dubrovnik will not realise any revenue from the concession, and the citizens who use the cable car at preferential prices, as well as tourists, will remain without the use of the simplest access to Srđ. The Museum of Homeland War on Srđ, owned by the City of Dubrovnik, is expecting to see a decrease in the number of visitors it gets, and guests of the city will remain without the ability enjoy one of Dubrovnik's biggest attractions,'' said Anto Rusković, the director of Excelsa Nekretnine.

Make sure to follow our dedicated lifestyle, business and politics pages for much more. If it's just Dubrovnik you're interested in, give Total Dubrovnik a follow. Heading to Dubrovnik and need a quick but comprehensive overview? Check out Dubrovnik in a Page.

 

Click here for the original article by Marija Crnjak for Poslovni Dnevnik

Friday, 22 March 2019

''Closing Dubrovnik's Cable Car to Srđ Would be Loss for Everyone''

The City of Dubrovnik wants 30 million kuna and 30 percent of future revenue for the use of the popular Srđ cable car without a concession contract.

As Marija Crnjak/Poslovni Dnevnik writes on the 21st of March, 2019, the several year long ''argument'' over the concession of the Srđ cable car has escalated to the extent it has because the City of Dubrovnik filed a lawsuit against Excelsa nekretnine (real estate) owned by the Lukšić family, accusing them of the unlawful acquisition of money. The amount that City of Dubrovnik is seeking for the use of the popular cable car without a concession agreement is 30 million kuna, as Dubrovnik's mayor Mato Franković announced last week.

He also explained that DORH had given the company a deadline which is the end of this month to comply with the law of the Republic of Croatia, to pay a concession fee to both the City of Dubrovnik and to the state, and by April the 1st, they are obliged to sign a concession agreement with the City of Dubrovnik.

If this doesn't happen, the cable car will be closed because its use would then be illegal, Mato Franković said, adding that a new report showed that the concession fee of 15 percent is too low and the belief is that it should be 30 percent. At the next session of Dubrovnik's City Council, a proposal to annul the old motion and to propose a new one will take place. In an interview with Poslovni Dnevnik, Anto Rusković, the director of Excelsa nekretnine explained why a concession contract has not yet been signed and that the company will not agree to an even higher fee than the one which was previously proposed.

Do you admit that there is a 30 million kuna debt to the City of Dubrovnik? Do you consider that the city's claim is justified?

The City of Dubrovnik filed a lawsuit against Excelsa nekretnine in the amount of 20.1 million kuna, and Excelsa nekretnine will pay as much as is determined by a final court judgment. Given that such verdicts still haven't come to pass, and in order to ensure that the City will be able to be paid if the court's verdict goes in its favour, we have offered the City of Dubrovnik the appropriate means of securing its eventual receivables in good will. It should be stressed that, if [any debt] exists at all, then it has arisen because the City of Dubrovnik hasn't offered a conclusion to the concession contract to date.

Why has a concession agreement between Excelsa nekretnine and the City of Dubrovnik not been signed yet?

Excelsa nekretnine has applied for a concession, with the concessionary terms agreed with the City of Dubrovnik, filed in August 2015, while the City of Dubrovnik hadn't issued a concession decision in accordance with the agreed terms until April 2018. In the meantime, the city brought in and then revoked several concession-related decisions, and the last one from April 2018 hasn't yet been implemented. It's necessary to clarify that we have been seeking concessions since 2010, but we had to wait for the applicable legislation by the state. The law granting concessions to cable cars entrusted to local self-government units was passed in 2014 and then we started negotiations with the city, finally agreeing on the concession conditions in July 2015. Since then, the process has only become more complex and has led us to the situation in which we find ourselves today. If the concession contract was signed in 2015 as was agreed, the City of Dubrovnik would have got its concession fee the entire time and there would be no dispute today.

Is the closure of the cable car expected?

In the potential situation of the closure of the cable car, all sides will suffer significant losses, especially Excelsa nekretnine and its partners, since the work of the cable car provides jobs for a significant number of people.

Furthermore, if the cable car closes, the state budget will lose part of the tax revenue, and the City of Dubrovnik will not receive any revenue from the concession. It's important to note that since the beginning [of the work of the cable car] Excelsa nekretnine has contributed more than 122 million kuna in taxes and contributions to the state budget, predominantly based on the cable car's business.

We believe that the scenario of its potential closure should be avoided, but we're not in a position to make such a decision. Not only are we disappointed in the way the authorities are acting, but we're also frustrated by the fact that, unsuccessfully, we've repeatedly tried to solve this problem with a reasonable and rational approach. Unfortunately, this negative attitude towards investors will not contribute to improving the investment climate in Croatia.

Do you have a license from the Ministry of Transport to work on the lift and on what basis does has it been provided?

Excelsa nekretnine received approval from the Ministry of Transport for the carriage of passengers by cable car before the cable car even started working back in 2010. At that time, such approval was granted instead of a concession due to the long duration of the concession-issuing procedure, as is written in the very approval. Had Excelsa nekretnine not received explicit permission to carry out activities of the carriage of passengers by cable car, we wouldn't have even begun doing so.

 

The mayor has announced that he will seek 30 percent of the revenue in the concession contract, which should be signed by April the 1st. Are you ready to agree to that?

We still haven't had any insight [into that] and we don't have access to the new expert testimony mentioned by the mayor which points to the need to increase the fee by 30 percent, so we can't comment on it either. On the basis of the previous expert testimony, we can see that such fees, twice the amount previously agreed, is unfounded. The City Council already approved the concession fee in April last year. We consider that the City of Dubrovnik should send a contract under the previously agreed terms and end this whole situation, which has already been going on for far too long.

Make sure to follow our dedicated business page for much more. If it's just Dubrovnik and the extreme south of Dalmatia you're interested in, give Total Dubrovnik a follow.

 

Click here for the original article/interview by Marija Crnjak for Poslovni Dnevnik

Monday, 18 March 2019

Could Dubrovnik's Beloved Srđ Cable Car Face Closure?

The Pearl of the Adriatic is known for its wealth of natural beauty in addition to its rich list of historical and cultural attractions. Dubrovnik is visited by millions from around the world year on year, and in addition to its magnificent walls, which are among the most impressive Medieval structures which are still standing today in Europe, its cable car which attracts seemingly endless queues during the summer months is unarguably among its top tourist attractions.

While the typical ''fights'' about Dubrovnik's cable car are almost identical to those frequently had over the old city walls - the price, there appears to be much more going on under the surface when it comes to perhaps the most expensive three minute ride you'll ever take.

For a single adult, a mere three minute cable car ride from just above the Old City of Dubrovnik to the top of mount Srđ and back comes with a price tag of 150 kuna. Dubrovnik's locals get it cheaper, however many avoid the cable car entirely, opting instead to hike or drive up the rugged 412 metre mountain which towers over the city.

Srđ is, despite the apparently eternally increasing cost of the use of the cable car, a unique must-see location when in Dubrovnik. The mountain provides stunning views over the extreme south of Dalmatia, the sparkling Adriatic sea and the Elaphite islands (Lopud, Koločep (Kalamota) and Šipan), and when turning around, a view over the mountainous and somewhat baron interior of neighbouring Bosnia and Herzegovina, the border of which is extremely close to Dubrovnik (Ivanica).

In addition, a restaurant and the Homeland War Museum sits at the top of Srđ, housed in an unassuming Napoleonic building known as Fort Imperijal. The museum should be visited by all those wanting to learn more and pay their respects to the sacrifice made by Dubrovnik's brave defenders during the Yugoslav and Serbo-Montenegrin attacks on the UNESCO protected city in the not so distant past.

Alright, now we're done talking about Srđ as a destination, let's get to the point. 150 kuna per ride or not, it seems that one of Dubrovnik's top attractions, the cable car, could be threatened with closure, according to a report from RTL vijesti (news).

As Poslovni Dnevnik writes on the 18th of March, 2019, according to Dubrovnik's mayor Mato Franković, DORH (State Attorney's Office of the Republic of Croatia) has given the somewhat ''famous'' Lukšić family company until the first April to pay huge compensation to the City of Dubrovnik and to the state, and to sign a concession agreement. Otherwise, the iconic cable car will be suspended.

A 150 kuna price tag for a three minute ride up a mountain is a bit steep (no pun intended, well, maybe a bit), and as prices for some of Dubrovnik's main attractions continue to rise, many tourists are beginning to become disillusioned with the Pearl of the Adriatic's offer. "For 150 kuna, I think the ride is too short, but the view is fantastic," said Indian tourists Karthi and Sushma.

It is precisely that beautiful view that makes the cable car as popular of an attraction as it is, and there is always row after row of tourists standing along the poorly laid out street with no shade (which also acts as a bus stop for regular city buses and for the airport shuttle) regardless of the ticket price.

The cable car's turnover stands at about 60 million kuna per year, Excelsa real estate accounts for about 65 percent of the net profit, while the City of Dubrovnik has apparently never even received even one kuna in revenue from the cable car. Could all that be about to change in a matter of mere days? Apparently so.

Make sure to follow our dedicated business and news pages for more. If it's just Dubrovnik and the extreme south of Dalmatia you're interested in, give Total Dubrovnik a follow.

Friday, 16 March 2018

Dubrovnik: Environment Group Threatened by Golf Resort Lawsuit

The Dubrovnik golf resort saga continues.

Tuesday, 20 February 2018

Franković: ''I Don't Think Srđ Golf Project Will Happen, Dubrovnik Will Plan What Goes Up There''

The much talked about golf project for Mount Srđ appears to be stagnating, and according to Franković, it seems it will likely never come to fruition.

Tuesday, 16 January 2018

Hiking Dubrovnik's Mount Srdj - Do or Don't?

To take the cable car, or not to take the cable car? That, is the question.

Wednesday, 6 December 2017

26th Anniversary of Barbaric JNA Attack - Dubrovnik Marks Day of Defenders

26 years have passed since the horrendous attack on the Pearl of the Adriatic at the hands of the JNA and their Serbian-Montenegrin helpers.

Saturday, 14 October 2017

Franković Requests Inspection of ''Illegal'' Cable Car Operation, Notifies DORH

Dubrovnik's Mayor has issued Excelsa Nekretnine with a firm ultimatum.

Thursday, 3 August 2017

''WTF Dubrovnik'' Festival Begins on Friday!

Love electronic music? Dubrovnik is the place to be on Friday!

Thursday, 27 July 2017

Dubrovnik's Panorama Featured in Architectural Digest's ''World's Best Cliffside Restaurants''

More coverage for one of the city's gems.

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