As expected, debts of Croatian Motorways public company will be paid by drivers.
Croatian government on Thursday adopted a decision on the operational and financial restructuring of the road sector. The decision includes provision which will increase the tolls on Croatian motorways by 5 percent for the whole year. Also, the decision allows for a higher price increase up to 10 percent during the summer tourist season. The general price increase of tolls on motorways will come into effect on 1 April, reports Index.hr on March 16, 2017.
“With current revenues, it is not possible to repay the Croatian Motorways public company’s credit obligations this year, although revenues from tolls were 7 percent higher last year. In order to avoid privatization and uncontrolled increase of tolls which might be implemented by potential private concessionaires, we have opted for this kind of reforms that will have the support of the World Bank. A guarantee will be issued which Croatia will use to refinance the road sector debt”, said Transport Minister Oleg Butković.
“With this approach, it is not necessary to carry out the privatization of the road sector, which is a solution that would not solve the main problem, because we would still need to repay 2.5 billion euros from the state budget. The implementation of the reform is necessary in order to maintain liquidity”, he concluded.
Speaking earlier about the issue, Butković said that the debt of the Croatian Motorways public company was a great burden for state finances. “Everyone knows that the total debt of Croatian Motorways is 5.2 billion euros. This year, the company has to pay back 1.2 billion euros, and next year even more. This is a major problem for state finances, which needs to be addressed. About a year ago, after we decided against selling the motorways, we started the programme of financial and business restructuring in cooperation with the World Bank”, said the Minister. “We are preparing a reform package, whose goal is to increase income and reduce expenditures. We want to make the company sustainable and stable, so that it is no longer a headache for the state budget”, said Butković.
“This is a very good solution and I think that this is the only way to avoid selling or giving a concession on Croatian Motorways, so that they can stay in the hands of Croatia and Croatian citizens. After all, people gave more than 500,000 signatures to demonstrate that they do not support the sale of the company”, said Butković.
