Have you ever bought an island at auction?

Tourism

Serbia will auction an island in the Adriatic sea once used by France's Club Mediterranee SA and later abandoned amid the Balkan civil wars in the 1990s. The 74-acre island of Sveti Marko off the coast of Montenegro will be sold on Sept. 28 at an auction in Belgrade with a minimum starting bid of €16.7 million ($21.4 million), the Agency for Privatization said today. The winner will receive the island along with remaining assets, including dilapidated restaurants, cafes and dozens of bungalows. Serbia, which is selling state assets to raise money for rebuilding infrastructure and help boost living standards, had originally scheduled an auction on Aug. 31 but postponed it after a court in Montenegro blocked a sale pending the end of arbitration between US-based Uniworld River Cruises Inc. and the Serbian government in Paris. Rade Sevic, a spokesman for Serbia's Agency for Privatization, said in a phone interview that the auction is legal, as „proceedings in Paris are unrelated to the sale of the island.”

River Cruises Inc purchased the island in May 2003 together with its previous owner, the Putnik travel agency based in Belgrade. River Cruises bought the island for €4.1 million ($5.2 million), but the government ended the contract last year, arguing the buyer failed to fulfill the terms of the agreement on the purchase of the company. The Share Fund now holds 70% of shares of the Putnik travel agency. The island, named after the Church of St. Marko, lies in Montenegrin territorial waters in the bay of Boka Kotorska near the town of Tivat. Montenegro became an independent state in May following a referendum on secession from the state union with the landlocked Serbia. The island's legal status remains unchanged as Serbia and Montenegro pledged they will guarantee the right of ownership to citizens and companies from both countries. Club Med operated a resort on the island until 1992 with 500 two-bed houses built in a Tahitian style, two restaurants, tennis courts and a marina, according to sale documents. Montenegro, the smallest of the former Yugoslav republics, expects growth of tourism to average 10.6% a year through the next decade and account for a quarter of its economy, Minister of Tourism Predrag Nenezic said in a July 26 interview. (Bloomberg)

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