Croatia to Build 26 New Fishing Vessels and Rebuild 7 as Part of Fishing Fleet Overhaul

Croatia will build 26 new fishing vessels and thoroughly reconstruct seven as part of a model of financing the reconstruction and modernization of the country's fishing fleet that was adopted at a government session on Thursday.

Under the plan, 30 per cent of a ship's value will be financed by the government, 10 per cent by the owner of the ship in question, while the rest will be covered by loans from the Croatian Bank for Reconstruction and Development (HBOR).

Loans will be given under very favorable conditions, for a repayment period of 15 years and at a subsidized interest rate that would eventually amount to two per cent, Maritime Affairs Minister Božidar Kalmeta said.

The government will secure KN21 million from the national budget to subsidize any interest rates exceeding that, he added.

Prime Minister Ivo Sanader said that the reconstruction and modernization of the fishing fleet, which will be carried out in 15 domestic shipyards, was one of the steps aimed at making the Croatian fishing sector competitive in relation to the neighbors.

The government also asked Parliament to approve an agreement providing a guarantee for the construction of a 31.3 kilometer -long ring road around the coastal city of Split.

The guarantee will be given to the Croatian Roads company, while a loan is to be provided by the European Investment Bank. The project is worth EUR203 million, including an EIB loan of EUR 60 million. Work is due to start this year and finish in 2009. (Hina)