Investment in Croatia: Could EU Funds Help Croatian Roads?

Lauren Simmonds

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As Novac/Kresimir Zabec/Dora Koretic writes on the 26th of November, 2019, investment in Croatia, while sometimes tricky, is on the rise. As much as three billion euros have been invested in Croatian transport infrastructure projects over the last few years, and even more could be made available in the next period by EU funds, Transport Minister Oleg Butković announced at the 7th Congress of the Croatian Road Society – VIA VITA in Opatija recently.

However, in order to use and properly implement these funds in time, the Public Procurement Act needs to be urgently amended, Butković pointed out.

”The biggest problem so far has been finding a source of funding. Now that we have the money, we have to wait more than a year to run the tender. That’s really frustrating. Tender appeals are made by non-employee companies that deal with real estate and buy time. I urge the Minister of Economy, Darko Horvat, to move to amend the law. To raise the cost from 5,000 kuna to 100,000 kuna, and shorten the appeal deadlines,” said the Minister of Transport, who publicly expressed his dissatisfaction with the current Public Procurement Act for the very first time.

The act puts a huge weight on the shoulders of investment in Croatia, and he was joined by Croatian Roads CEO Josip Škorić, who firmly shares his belief and has been pointing out the issues with that law for more than a year now. According to him, an equal or perhaps bigger problem to potential investors is the Construction Act. He believes that the amount of responsibility placed on the backs of investors is hindering investment in Croatia in general.

”Today, when we start the construction of a 20 kilometre road, we have to resolve all the boundaries of the plots along which it must pass in the land registry. Well, just let someone else handle the land registry! At one time, everything was handled by the contractor, and today everything has fallen on the back of investors,” said Škorić, who demanded that the model be changed because the current law doesn’t treat the construction of line infrastructure in the right way at all.

At the panel, which discussed the projects of the transport sector, Dario Silić, the director of Bina Istra, announced the construction of the second part of the Učka tunnel. According to him, agreements are underway to finance the project. According to rough estimates, construction would cost about 1.5 billion kuna in total. The construction would be financed by Bina Istra and the state would extend its concession period over the Istrian Ypsilon. Both Silič and Butkovič announced that construction could begin next year, and would take between three and three and a half years to complete.

The tender for the construction of the Vc corridor from Osijek to Beli Manastir should be announced by the end of the year, as was explained by the director of Croatian Motorways, Boris Huzjan. According to him, an agreement was reached that this project would be jointly funded by the EBRD and HBOR. However, as we has since been unofficially learned from the Ministry of Economy, for some time now, changes have been being considered, such as potentially introducing different rules during the appeal process.

Denis Vukorepa, the director of the Port Authority of Rijeka, spoke about the largest project in the Northern Adriatic. He said that seven major global companies that were interested in concluding the project in mid-January 2020 would be invited to submit their final bids. According to him, the Port of Rijeka is the only port in the Northern Adriatic that has excess free container capacity.

”This enables us to become the leading container ship port in the Northern Adriatic in the next five to seven years. We can even reach Koper in terms of traffic,” Vukorepa stated.

According to Minister Butković, the forthcoming period should be the period of investment in Croatian railways. There are no major projects that are going without significant interest, but the actual realisation of these projects will make little difference without restructuring all of the companies operating within the sector.

A sector policy letter defining the restructuring model was due to be adopted in June, but of course, it has not yet been adopted. Butković has openly acknowledged that it’s difficult to reconcile the restructuring model due to different interests within HZ Passenger Transport, HŽ Infrastructure and HZ Cargo. However, an agreement was indeed reached. Another problem is unions with which there is no consent and it is obvious that without union consent, things won’t go well.

Make sure to follow our dedicated business page for much more on investment in Croatia.


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