ZAGREB, March 13, 2018 – Parliament Speaker Gordan Jandroković, reacting to MOST MP Tomislav Žagar’s speech in Parliament, on Tuesday read out a World Bank statement on the reform of the Croatian road sector, saying that the situation was not that worrying.
“The World Bank is pleased with the process of reform of the road sector in Croatia. The financial and operational restructuring is continuing in a satisfactory fashion and in accordance with the sectoral policy letter. There is ongoing cooperation, including discussions on working documents between the bank, the Ministry of Sea, Transport and Infrastructure, and the three road companies, which is usual practice in any project,” Jandroković said.
He admitted that his move was contrary to the rules of procedure, but added that he had to react because Žagar untruthfully said that the World Bank had given Croatia “a slap in the face” because the total debt of Croatian Motorways (HAC), Croatian Roads and Rijeka-Zagreb Motorway was 5.2 billion euro, which is 11% of GDP, and that two billion kuna in interest was falling due this year alone. “It is my duty as speaker to react and warn that what Mr Žagar said is only half true,” Jandroković said.
Žagar said that, in April 2017, HAC had been granted a 22 million euro loan and a 350 million euro guarantee to modernise and restructure the road sector. The previous year, it was awarded 50 million euro for operational improvement and 200 million euro for refinancing a portion of the debt.
“After the World Bank approved this and the work began, a shock comes from the World Bank, a slap in the face. They say that nothing has actually been done. Instead of reducing the number of workers by 7%, you have increased it by 15%. Instead of reducing costs, you have increased them,” Žagar said.
He noted that it should be borne in mind that all the debts incurred by the three road companies were covered by state guarantees. “In other words, all these debts will eventually be paid by Croatian citizens,” Žagar said, calling on Finance Minister Zdravko Marić to have “a serious talk” with Transport Minister Oleg Butković to find a solution.
“This has to be done because it is reason enough for any minister in a law-governed country to resign. This is a huge amount of money and it would be a disgrace if citizens of Croatia had to pay for this,” Žagar said.
A Croatian newspaper ran an article on Monday saying that the restructuring of the road sector, including servicing the debt of 5.2 billion euro, was questionable because the restructuring of HAC was not proceeding in accordance with the government’s commitments.