This case study shows that the municipality of Herceg Novi, within the mandate of the mayor Dejan Mandic, sold a valuable municipal land to a private company, while at the same time concluding a donation agreement, on the basis of which the company in question paid a certain sum of money as a donation to the local authorities for successfully concluded transaction.
According to the available data, the municipal Directorate of Property as early as at the beginning of 2007, assessed the value of parcels on location in Kumbor, better known as Zmijice, and on which the municipality of Herceg Novi has the right of shared ownership.
An appraiser estimated the value of the parcel, covering the area of 5,220 square meters, where the municipality sold its part of the property one year later, to be worth €417,600, i.e. €80 per square meter. The appraiser’s findings determined the value of the land roughly, without specifying the economic method which was used to calculate the actual value of the location.
The first two public calls for the sale of the municipal share of the land in Zmijice by auction failed, and in September 2007 the Directorate of Property announced the third call for public bid.The starting price per square meter of the land was determined to be €180.
Three offers were submitted by a company “Viktorija plus” from Herceg Novi and by two individuals – Vera Simic and Branka Vurunic, also from Herceg Novi. The company “Victorija plus” won with the highest bid of €191.5 per square meter of land, so that the total bid amounted to €1 million for a parcel of 5,220 square meters.
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