The Budva Bypass: What a €240 Million Contract Actually Changes for the Bay of Kotor

At a glance: Montenegro has signed a €240 million contract to build the Budva Bypass, with construction starting October 2026 and completion expected by 2030.  

How one of Montenegro's largest road projects could improve accessibility, strengthen the Bay of Kotor and make everyday travel more predictable.
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If you have ever flown into Tivat during the height of summer, you will probably remember the traffic before you remember the scenery. The drive towards Tivat, Kotor or the Luštica Peninsula can be surprisingly unpredictable: not because the distances are great, but because almost every vehicle travelling between Podgorica and the Bay of Kotor is funnelled through the centre of Budva. The problem is not simply delay. It is uncertainty. The same journey can take 35 minutes in October or well over an hour on a summer weekend, with no reliable way of knowing which it will be.  

That is the problem the Budva bypass is designed to solve.  

At the end of June 2026, Monteput signed a design-and-build contract with a consortium led by BRIV Construction, including Hering, Herc gradnja, Shandong and IPSA Institute Sarajevo, for the construction of a fast road between Markovići and Lastva Grbaljska. The total project value is approximately €240 million including VAT (€196 million under the contract terms before tax). Construction is scheduled to begin in October, with a completion period of 48 months from commencement. The route is around eight kilometres long, though the engineering is more substantial than that figure suggests: approximately 70 percent of the alignment runs through tunnels or across elevated bridges, with 4.3 kilometres of twin-tube tunnels and 1.4 kilometres of bridge structures. The project is funded entirely from the state capital budget.  
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Why the Bay of Kotor Is the Real Story

Although the project is widely described as the Budva bypass, its greatest significance lies elsewhere. The bypass connects the M10 road at Markovići, where traffic arriving from Podgorica currently enters Budva, directly to the M1 coastal road at Lastva Grbaljska, north of the town. Traffic heading to Tivat, Kotor, Herceg Novi or the Luštica Peninsula will avoid passing through Budva's urban centre before rejoining the coastal road.  

For buyers and residents in the Bay of Kotor, this matters more than it might initially appear. Tivat Airport serves the entire Bay of Kotor, and more reliable access to it improves the practical case for living in Kotor, on Luštica, or anywhere along the coastline north of Budva. The same applies to the connection with Podgorica, which remains the country's commercial centre and the arrival point for most international flights that do not land at Tivat. The benefit is not only time saved; it is the ability to plan with reasonable confidence, which anyone managing airport transfers, rental changeovers, property viewings or a regular commute between Tivat, Kotor and the Luštica Peninsula will immediately understand.  

While infrastructure projects do not determine property values on their own, improvements in accessibility have historically been one of the factors that support long-term demand in residential markets.  
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What It Does Not Change

It is worth being precise about the limits. The bypass diverts through traffic around Budva; it does not address congestion within the town itself. Local roads, beach access routes and the streets of Budva's centre will continue to carry the volume generated locally. Summer in Budva will still be summer in Budva. The bypass is a significant piece of infrastructure, not a comprehensive solution to every traffic problem on Montenegro's coast.  

It is also a project with a four-year horizon. The contract has been signed and construction is imminent, which moves this firmly beyond planning into implementation. But anyone considering a purchase in the region should treat 2030 as a reasonable working assumption for when the benefits become tangible.  

The Wider Context

The bypass does not sit in isolation. Montenegro is simultaneously advancing the modernisation of the Bar–Golubovci railway line, a project with a total value of approximately €230 million backed by the European Investment Bank, the European Bank for Reconstruction and Development and EU grants, which will improve the rail connection between the coast and Podgorica. Work continues on the Bar–Boljare motorway, which is progressively shortening the drive from the northern highlands to the Adriatic. Individually, each of these projects addresses a specific gap. Collectively, they are building a transport network that functions with a degree of reliability the country has not previously had.  
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A Country That Feels Smaller

One of Montenegro's most distinctive attributes is the proximity of coast and mountain. The drive from Tivat to the ski slopes above Kolašin takes roughly two hours under normal conditions, a combination that very few countries in Europe can offer at any price point. Projects like the Budva bypass do not create that advantage. What they do is reinforce it, by making the journeys between these places more dependable and removing one of the Bay of Kotor's most persistent friction points.  

Montenegro does not need to become a different country to attract serious long-term investment. It needs to become a more functional version of itself. On that measure, a signed contract and a construction start date in October represent genuine progress, because what buyers experience is not the engineering itself, but the easier journeys it makes possible.  

Frequently Asked Questions

When will the Budva Bypass be finished?
‍Construction is scheduled to begin in October 2026, with a 48-month completion period. A realistic working assumption for the bypass being open is 2030.  
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Does the Budva Bypass affect property prices in Kotor or Tivat?
‍Not directly or immediately. Infrastructure alone does not set property values, but improved accessibility has historically supported long-term demand in residential markets, and this project strengthens the practical case for living anywhere north of Budva along the coast.  
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How will the Budva Bypass change journey times from Podgorica to the Bay of Kotor?
‍The bypass will not necessarily make the journey dramatically faster in ideal conditions, but it will make it more predictable, removing the unpredictable delays currently caused by routing all traffic through central Budva.  
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Will the Budva Bypass reduce traffic congestion inside Budva itself?
‍It will reduce through-traffic, meaning vehicles with no reason to stop in Budva. It will not resolve congestion generated locally, such as beach traffic or town-centre activity in summer.  
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Is the Budva Bypass actually under construction, or still at the planning stage?
‍A design-and-build contract worth approximately €240 million was signed at the end of June 2026 between Monteput and a consortium led by BRIV Construction. This moves the project beyond planning and into implementation.  
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Sources:
‍All factual statements and project specifications were verified against official government announcements and independent reporting available at the time of publication.  

• Government of Montenegro: Contractor Selected for Construction of Budva Bypass (May 2025) — gov.me  
• Government of Montenegro: Tender Announced for Budva Bypass Construction (October 2025) — gov.me  
• Pravda Montenegro: Construction of a Bypass Road Near Budva Will Begin in October (June 2026) — montenegro.news-pravda.com  
• European Investment Bank: EU to Invest €175 Million to Upgrade Bar–Golubovci Railway Line (December 2025) — eib.org  
• SeeNews: Montenegro Opens Tender for Budva Bypass Road (October 2025) — seenews.com  

Figures and dates current as of July 2026.  

Peter Flynn moved to Montenegro in 2005 and began working in the country's property market as a private speculator. He established New Territory DOO in 2006 to formalise his operations after the country gained independence. With two decades of experience guiding international buyers through Montenegro's property market and residency processes, he specialises in the Tivat and Bay of Kotor area. Working alongside business partner Maša Flynn, NT Realty (which takes its name from the New Territory holding company) has helped hundreds of buyers from the US, UK, Australia, and beyond navigate Montenegro's evolving legal and regulatory landscape. Peter maintains close working relationships with local lawyers, notaries, and government officials, providing clients with current, practical guidance rooted in on-the-ground experience.