Strategic Investments Threshold to Be Lowered to 75 Million kuna

Total Croatia News

The government is working on a new law on strategically important investments.

The project of strategic investments for which administrative barriers will be removed, which was initially launched by Prime Minister Zoran Milanović’s government, but was never really implemented, will be re-activated by Deputy Prime Minister and Economy Minister Martina Dalić. She has submitted a procedure of a proposal of a new law on strategic investments which aims to remove the misunderstanding of certain provisions in the current law, reports on May 11, 2017.

Compared to the legal framework created by the project’s initiator and her predecessor, Deputy Prime Minister Branko Grčić, the main novelty is a reduction in the threshold which individual projects have to cross in order to be taken into consideration. The previous threshold of 150 million kuna will be halved and will amount to 75 million kuna. The threshold for declaring a project as a strategic investment in areas of special state concern and on islands will also be halved to just 10 million kuna.

The Economy Ministry says that the goal is to increase the interest of entrepreneurs to apply as many projects as possible. The list of strategic projects will automatically include all projects which are deemed of strategic importance for the European Union, and all projects that are launched by foreign investors will have to be be created through companies registered in Croatia.

As in the existing regulations, sanctions are being imposed on state and local institutions which slow down the delivery of strategic projects outside of set deadlines. There is also a more precise definition of agreements on project preparation and implementation, investment plan timings, and final project implementation deadlines, as well as contractual penalties in the event of a delay caused by the investor or its withdrawal from the project. In that case, investors would be penalised in the amount of 0.1 percent of the total value of the project. Among other provisions, those interested in joining the group of strategic projects should, in the future, submit a more elaborate project with financial and other details.

According to the data of the Economy Ministry, only 7 projects worth 13.4 billion kuna, of which four are public and three are private, have so far been deemed strategically important. The first projects approved by the Milanović government were the Plomin Power Plant reconstruction worth 6.3 billion kuna, the 1.6 billion kuna container terminal in the Rijeka Port, the Piškornica waste treatment centre worth 760 million kuna, and the LNG terminal for which an investment of 3.8 billion kuna was expected.

The government led by Tihomir Orešković included two private projects in the list – the Punta Nova camping site in Povljana near Zadar worth 140 million kuna, and a hotel in Rovinj in which Maistra has invested 450 million kuna. The current government has given the strategic status to the Plat hotel project worth 429 million kuna.

There are further 31 projects in various phases which are being considered for inclusion in the list of strategic projects. The Ministry says the strategic projects commission has continued with its activities in the term of this government as well, and that the new law seeks to increase the flexibility in the administrative review of the projects.


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