Photograph: hr.wikipedia.org

The head of the State Property Management Office (DUUDI), Tomislav Boban, said in the southern coastal town of Dubrovnik on Friday that the signing of a contract for the Kupari tourism project with the Avenue Ulaganja company on Thursday meant the official launch of that investment project.

''A contract for the Kupari project was signed with the Avenue Ulaganja company on Thursday and that day marks the start of the implementation of that project. The deadline is two to four years, and in the first two years preliminary steps will be carried out regarding the Urban Plan and subdivision of certain real estate that will be included in the development zone," Boban said, adding that the project foresees the construction of several five-star hotels, including the reconstruction of the Hotel Grand as defined by the Culture Ministry.

"This refers to investments of at least HRK 722 million, or possibly more than a billion kuna," Boban underscored.

He believes that this will be a good precondition for further investments because there are another three zones in the area for potential investments.

"We have a lot of state-owned property that can be invested in and we will endeavour to put all unused property to use as soon as possible. The Kupari project is an excellent example of good practice, where income is divided between Zupa Dubrovacka municipality and the state at a ratio of 75% to 25%, and we recommend that this be an example to other local government units," he said.

The former, SDP-led government in October last year accepted Avenue Ulaganja's bid to develop the Kupari tourism project valued at around 100 million euro. The bid was the only binding one received for the project and was assessed as promising. The bid was considered to be worthwhile particularly since Avenue Ulaganja intends to enter the investment jointly with the Marriott hotels' Ritz-Carlton brand.

The government's decision to accept the bid refers to three concessions of 99 years with the right of construction, the lease of the Hotel Grand and the sea belt for the purpose of construction and commercial use of the beach in the Brasina area.

The investor offered to pay 172,000 euro a year as an allowance for the right of construction, 58,500 euro a year for the lease of the Hotel Grand and around 85,000 euro a year for the use of the sea belt, plus a variable allowance of 3% per annum of income generated from services provided on the beach.

The government also adopted an agreement between the state and Zupa Dubrovacka municipality under which the municipality gained the right to 25% of the revenue the state will receive from the investor.

Tourism Minister Anton Kliman on Friday confirmed that the contract for the project was signed on Thursday and that that meant the project had been launched.

"Binding bids for the Muzil project near the northern coastal town of Pula will be invited soon. Two non-binding bids have been submitted for that project and I believe that there will be more investors interested in the project which will be conducted similarly as the Kupari project," Kliman told Hina on Friday.

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