Business restructuring key for Croatia's road sector, says minister

Business restructuring is key for Croatia's road sector and it must be carried out in the next four to five years, Transport and Infrastructure Minister Oleg Butkovic said on Thursday, announcing further layoffs and a solution to toll collection.

"In 2017, the merging of companies was carried out, 208 people voluntarily left the system and about 100 are expected to leave this year," he told reporters after a government meeting, adding that maintenance costs in the road sector had been cut by 7%.

Butkovic said experts would propose a new toll collection system as of next year and that vignettes were one of the options.

He said it was up to the government and the road companies to do all that was necessary to make them sustainable, in which higher tolls were not an option.

At the same press conference, reporters asked Finance Minister Zdravko Maric how he could know that in the next few years interest rates would move in a direction which would justify the government's decision today to allow road companies to borrow EUR 1.8 billion from banks.

Maric said he could anticipate that the reference part of the interest rate would increase. "These are the expectations of the whole financial world, as well as ours. We are still in a period of historic minimums."

As for the payment of a HRK 1.27 billion principal due in 2030, he said it would be successfully serviced in line with the expected results of the three state-owned road companies.

Asked about the new strategic partner in the Uljanik shipyard, Kermas Energija, and if the government would financially support the dock's restructuring, Maric said the government expected a quality restructuring plan that would be carried out. He said the government was willing to consider aid requests but that the responsibility was first and foremost on Uljanik's owners and management.

Asked if banks would be taxed or additionally regulated to the benefit of consumers, given that since 2010 foreign banks in Croatia withdrew HRK 14 billion out of the country through dividends, Maric said the government was first and foremost thinking about cutting taxes, not introducing new ones.

(Hina)