Government to Establish Ministry of State Property

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Croatia will soon get its 20th ministry.

It is expected that the government will today send to Parliament legislative changes which will establish the Ministry of State Property, which will be led by Goran Marić, who is currently Minister without Portfolio. The political decision was made last week and will be formalized next Friday, when Parliament should adopt the changes, reports Večernji List on November 3, 2016.

The State Office for State Property Management (DUUDI) will be abolished and its employees will be taken over by the new ministry, which will eventually spread to other institution and bodies in the field of state property management.

Due to the volume of work, it is likely that Goran Marić will have three state secretaries in his ministry, including the current head of DUUDI Tomislav Boban. The new ministry will be divided into three departments: one for state property, one which will manage stocks and shares in companies, and one which will deal with financial assets of the state.

The state does not have an accurate register of state property because shares in companies and stocks are registered at various government bodies. Large companies in the portfolio are managed by DUUDI, while the Centre for Restructuring and Sale (CERP) controls 459 smaller companies. For now, CERP will remain an independent legal entity under the authority of the Marić’s Ministry. Much of the CERP property are minor shares in companies of negligible value. For example, in the Union company from Zagreb, the state has a share of 0.46 percent, with the estimated value of 117,000 kuna.

Marić will have a lot of work in sorting out the list of state property and organizing the portfolio which will include many companies that have gone through pre-bankruptcy settlement procedure and in which the state has transformed its claims into ownership shares. Such companies will probably have to be commercialized.

The burning issue for the Minister is privatization of companies which are not of strategic importance nor are a natural part of the state apparatus: from veterinary stations and tourist companies to food production companies. In addition to the management of companies, the Ministry will also deal with management of concessions and leases. The state owns more than a million properties, including more than 27,000 apartments, almost 11,000 commercial buildings and 70 villas. However, real estate rentals bring in less than 50 million kuna a year.

Assets which are by some estimates worth the total of 33 billion euros have brought only 2.2 billion kuna in budget revenues in the first eight months of the year, with the majority represented by a dividend paid by Croatian Electric Company (HEP).


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