Montenegro's $1 Billion Highway: The Village of 15 Was Never the Point
Wendover Productions has found an easy way to make Montenegro's Chinese-built highway look ridiculous: it costs roughly €1 billion and ends near a village with 15 residents. It's a memorable punchline. It is also an inadequate way to judge a national infrastructure project.
The 41-kilometre Smokovac–Mateševo highway is the first completed section of a planned 170-kilometre corridor connecting Montenegro's Adriatic port of Bar, its capital Podgorica and the Serbian border. The European Bank for Reconstruction and Development identifies the difficult mountainous terrain as a major reason for its exceptional construction cost. The village population tells us almost nothing about the highway's intended economic purpose.
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That does not make the project a success. It makes the original criticism too shallow to establish failure. The real questions concern the price, the Chinese financing, the procurement arrangements, the traffic the road attracts and whether Montenegro can afford to complete the corridor.
The $1 Billion Figure Needs Explaining
The road is also far more substantial than the village joke suggests. The operator lists 16 twin-bore tunnels, 20 bridges on the main route, and 17.7 kilometres of tunnels across a 41.5-kilometre section. The highway climbs from 63 metres above sea level to more than 1,100 metres.
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There is a legitimate reason to question the timing, however. When the video was made in 2021, the motorway had not yet opened, and the remaining corridor sections had not been completed. It eventually opened in July 2022, three years behind schedule. The real question was whether Montenegro had built an expensive first stage before securing the rest of the route.
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The business case was the real scandal
The most damaging information missing from the video concerns the economic studies behind the decision.
The IMF's 2022 assessment of Montenegro's public investment system records that two feasibility assessments, conducted in 2009 and 2012, concluded that the Bar–Boljare project was not viable. A third study, which supported proceeding, was prepared by the company implementing the project and was never published.
The IMF also found that the project proceeded without an independent review of its economic justification. Maintenance costs for the extensive tunnels and bridges had not even been estimated for the government's medium-term financial planning.
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This is a much stronger criticism than the population of Mateševo. A government can reasonably build infrastructure that does not generate enough toll revenue to pay for itself. It must demonstrate that wider economic benefits justify the subsidy.
Montenegro's own government acknowledged precisely this problem in its sovereign bond prospectus. It projected that toll and other commercial revenues would not cover the highway's debt obligations, requiring approximately €32 million in government subsidies annually. It nevertheless argued that the overall economic return would be positive because of improved road safety, tourism, regional integration and trade.
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That distinction matters. Financial profitability and economic value are not the same thing. A road can lose money at the toll booth while delivering substantial benefits elsewhere.
But those benefits must be measured. The video never examines whether the promised safety improvements, travel-time savings and commercial activity justify the public expenditure.
The price was more complicated than the headline
The original construction contract was €809.6 million, signed in 2014 with China's China Road and Bridge Corporation (CRBC). China Exim Bank financed 85% through a $943.99 million loan facility, carrying a fixed 2% interest rate, a six-year grace period and a 20-year maturity. Montenegro provided the remaining 15% from its own budget and guaranteed the loan.
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The difference between the contract price, loan amount and eventual project cost matters. They are not interchangeable figures.
MANS, a Montenegrin anti-corruption watchdog, documented more than €100 million in additional and subsequent works not included in the original construction contract. These included electricity, water infrastructure and connecting roads. It also identified at least €30 million in agreed supervision costs, approximately €15 million in land acquisition and more than €30 million in financing costs during the loan's grace period by mid-2019.
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The highway operator now describes the completed 41-kilometre section as costing nearly €1 billion, or approximately €25 million per kilometre. The EBRD's 2025 evaluation independently describes an initial estimated cost of $570 million eventually growing beyond $1 billion.
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The important question is not whether an exceptionally difficult mountain road costs more than an ordinary highway. It is why the original cost estimates, additional works and financing obligations were not presented to the public as one transparent project account.
Who benefited from the construction?
The money did not all go to China.
According to MANS, CRBC awarded nearly €400 million in subcontracting work. Montenegrin construction company Bemax alone secured contracts worth approximately €237 million, more than all the other subcontractors combined. Other beneficiaries included Cijevna Komerc, Skladgradnja and Montenegro Petrol.
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But the employment figures complicate the picture. In 2019, approximately 1,700 Chinese workers and 900 domestic workers were employed on the project, with most domestic workers hired through subcontractors.
MANS also estimated that more than €160 million in state subsidies and tax exemptions had accumulated by mid-2019. These included more than €118 million in VAT exemptions, approximately €20 million in customs benefits, €7 million in excise exemptions and more than €19 million in unpaid taxes and contributions relating to foreign workers. The watchdog cautioned that the figures were incomplete and that government agencies supplied inconsistent information.
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These were not simply payments to a Chinese builder. They were substantial public concessions supporting the entire construction arrangement.
None of this establishes that the contracts were corrupt. It does establish that understanding who received the economic benefits requires considerably more than identifying the nationality of the main contractor.
The Tara River paid another price
The environmental consequences also deserve attention.
A 2019 UNESCO mission examined the highway's crossing of the protected Tara River. It concluded that the placement of motorway infrastructure in the river's floodplain would destroy important natural floodplain characteristics, damage biodiversity and alter the river's ecological character. It also criticised inadequate environmental monitoring and called for stronger impact assessments and safeguards.
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There was also a concrete legal consequence. In November 2021, a court in Podgorica ordered CRBC to pay €200,000 in damages after untreated cement water and construction waste were discharged into the Tara River, damaging fish populations. A local fishing organisation had brought the case.
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This is not an abstract environmental objection. It is a documented cost associated with building the road.
The original video could have connected the financial burden to the environmental damage. Instead, the audience received a brief observation about a small village.
A road can be busy and still be a bad investment
The highway is not deserted. According to its operator, it carried approximately 3.21 million vehicle passages in 2025, bringing cumulative traffic since opening to more than 11.4 million by July 31, 2026. Its record daily traffic reached 21,455 vehicles in August 2026.
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But traffic is not profitability. The EBRD's 2025 evaluation describes the highway's economic and financial returns as limited, despite double-digit traffic growth for a second consecutive year.
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The financial burden has also changed since the original controversy. Montenegro's government reintroduced currency hedging in January 2024, converting approximately $754 million of outstanding dollar debt into €693.7 million. The arrangement reduced the interest rate to 0.98%, generated reported savings of €12.6 million by July 2025, and was subsequently extended at a fixed rate of 1.46% from January 2026.
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The country's public debt also fell from 107% of GDP in 2020 to 63% by the end of 2024. The EBRD attributes the 2020 spike largely to the pandemic's economic damage, while identifying the highway as a major contributor to earlier debt growth and fiscal adjustment. Blaming the entire debt crisis on one road would therefore be misleading.
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Montenegro is still betting on the corridor
The project has not ended at Mateševo.
In January 2026, Montenegro selected the Chinese consortium PowerChina–Stecol–PCCD to build the next 23-kilometre section towards Andrijevica. Its winning bid was €693.97 million, following a tender conducted under EBRD procedures. Financing includes a €200 million EBRD loan and a €150 million European Union grant.
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By June 2026, the government had approved preparatory works for this extension. Full construction was not yet underway.
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This matters because it confirms that the original road is part of a continuing national transport strategy, rather than an isolated construction project serving a tiny settlement.
It also means Montenegro is committing itself to further substantial expenditure before the full economic benefits of the corridor can be established.
The European Commission had already called for a more integrated transport strategy, including better consideration of the parallel railway and the environmental consequences of relying primarily on roads. Its 2023 report noted that the full highway feasibility study had been published in October 2022, but subsequent updates and preliminary designs were delayed.
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The verdict
Wendover was right to question the cost and the pressure placed on Montenegro's public finances. It was wrong to use a village of 15 people as evidence that the road had no meaningful purpose.
The real indictment is considerably more serious.
Montenegro committed itself to an extraordinarily expensive infrastructure project after earlier feasibility assessments had found it unviable. Its supporting study was prepared by the implementing company and withheld from public scrutiny. The government accepted a negative financial return, substantial taxpayer subsidies, additional construction costs and environmental damage.
There are genuine strategic benefits, and the road is attracting increasing traffic. But those facts do not retrospectively establish that the original investment decision was sound.
A highway can be strategically important and still represent a failure of public financial management.
The audience deserved to learn how Montenegro made that decision, who received the contracts, what taxpayers ultimately financed and whether the promised economic benefits justify the cost.
Instead, Wendover gave them a village.
That is a missed investigation.
References
1. The News You Missed in 2021, From Every Country in the World (Part 2) — Wendover Productions, 2021. The original episode and its claim that the highway serves little purpose.
2. Montenegro: Technical Assistance Report — Public Investment Management Assessment — International Monetary Fund, 2022. Documents the negative feasibility assessments, unpublished contractor-prepared study, fiscal risks and missing maintenance estimates.
3. EUR 750 Million Notes Due 2027 — Prospectus — Government of Montenegro, 2020. The government's own financial projections acknowledge negative financial NPV and the need for annual debt subsidies.
4. Third Report on the Construction of the Bar–Boljare Highway: Road to Debt Slavery — MANS, 2019. Provides documentary figures on additional works, subcontractors, tax exemptions, employment and public disclosure problems.
5. EBRD Country-Level Evaluation: Montenegro 2017–24 — European Bank for Reconstruction and Development, 2025. Evaluates the highway's cost, debt impact, traffic growth and limited economic and financial returns.
6. UNESCO Mission Report on the Tara River and Durmitor — UNESCO World Heritage Centre, 2019. Documents the anticipated destruction of floodplain characteristics and inadequate environmental monitoring.
7. Montenegro Authorities Exaggerated Cost of Highway, Surveys Show — Balkan Insight, November 16, 2021. Reports the release of earlier feasibility studies and the court ruling concerning damage to fish in the Tara River.
8. Montenegro 2022 Report — European Commission, October 12, 2022. Establishes the three-year opening delay and the discrepancy between the recommended and actual motorway toll rates.
9. Montenegro's Highway Traffic and Construction Figures — Monteput, accessed October 2026. Provides official traffic counts, engineering specifications and construction-cost figures.
10. Ninth Highway Instalment Paid, State Saves Additional €620,000 — Montenegro Ministry of Finance, July 21, 2025. Documents the revised loan currency exposure, interest rate and cumulative hedging savings.
11. Contractor Selected for the Design and Construction of the Second Section — Government of Montenegro, January 15, 2026. Records the winning PowerChina consortium, its €693.97 million bid and the competing offers.
12. Government Gives Green Light for Preparatory Works on the Mateševo–Andrijevica Section — CdM, June 5, 2026. Confirms the next section's preparatory works and distinguishes them from full construction.