Tivat, a run down port in Montenegro, has caught the attention of prominent global investors who are keen to turn the former Yugoslav naval base into a playground of the rich and famous.

Tivat is being hailed as the new Monaco of the Balkans. The reason behind this is that a group of British investors, headed by famous British financier Rothschild, is interested in developing the port at Tivat into a dockyard for luxury yachts which cruise the Mediterranean Sea. This is especially true of the new Russian billionaires for whom owning an oversized yacht is a status symbol. The increase in the number of yachts has led to greater demand for docking space at already overcrowded ports.

The idea was first mooted by the 80 year-old Canadian billionaire, Peter Munk who heads the giant mining company, Barrick Gold. Munk initiated plans for turning the old port of Tivat into a magnet for the ultra-rich yacht owners. The project is estimated to cost around 200 million sterling pounds and after completion, the new dockyard will be christened Porto Montenegro.

However, Tivat is plagued by a host of infrastructural problems. Most of its roads are in need of repair while the power and water supply are erratic. Despite these problems, investors are willing to take a chance for says Munk even Monaco was once as backward as Montenegro whereas now it enjoys a per capita income of 2000 sterling pounds.