Croatian Bus Company Business Unsustainable Without Public Services Contract
March the 27th, 2021 - Croatian bus company business is already under a lot of strain due to the ongoing coronavirus pandemic and generally less demand, but without a contract on public services, operations will only become more problematic.
As Poslovni Dnevnik/Darko Bicak writes, although the Law on Road Transport, which is known to the public for its current regulation of the taxi market, also regulated the market of bus carriers operating within public intercity transport. However, at least to date, this particular regulation pertaining to Croatian bus company business operations hasn't been implemented in practice.
Namely, as was warned of recently from the Coordination of Public Line Passenger Transport at the Croatian Employers' Association, public service contracts for these carriers have not yet been concluded despite the fact that this is a legal obligation. The aforementioned association warned that this endangers more than seven thousand jobs and transport for more than 200 thousand passengers across Croatia.
Hrvoje Mestrovic, the president of this particular coordination, pointed out that without public service contracts, Croatian bus company business operations will continue being placed under tremendous strain.
"These carriers perform 80 percent of county transport, and the continued absence of a resolution for the conditions of bus carriers and the co-financing of unprofitable lines through public service contracts as the only possible way to co-finance public regular transport, endangers the social rights of people in smaller, rural parts of the country," warned Mestrovic.
He added that they are asking for these contracts to be signed for a period of seven years so that transport companies can borrow, pay debts and invest in good time.
"The state has already secured part of the funds through the budget for the transportation of high school students to help the residents of the country's islands, and an additional 107 million kuna is planned to be spent on that. This would ensure, with the additional possible co-financing of the municipalities and counties themselves, that the complete public line transport is maintained so that the lines don't end up being totally shut down,'' explained Mestrovic.
Bus carriers estimate that the total cost of this type of transport, which in 80 percent of cases is performed by private enterprises, stands at around 690 million kuna in total. As these are mostly unprofitable lines that are more important for the regional development of the country than for earnings, subsidies of an estimated 427 million kuna per year are necessary.
Carriers claim that a large part of that amount is currently being spent on transport, but that the system is unregulated and remains chaotic.
The Croatian Employers' Association's Damir Zoric, pointed out that bus companies have been brought to the brink of uncertainty because they cannot plan their business precisely because they were guided by the provisions of the applicable law which still isn't being regulated properly.
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State to Offer Intervention Help to Croatian Bus Companies After All
March the 13th, 2021 - It seems that the state is set to step in after all with intervention aid for a long suffering industry that has been dealt a heavy blow by the ongoing pandemic - Croatian bus companies.
As Poslovni Dnevnik/Darko Bicak writes, at a recent session, the Croatian Government accepted the bill on amendments to the Law on Road Transport, which will provide emergency assistance to Croatian bus companies, more specifically those carries which are continuing to uphold and maintain what have now become unprofitable lines.
The Croatian Employers' Association (HUP/CEA) hopes that this bill, which is proposed to be adopted in an urgent procedure, will finally contribute to a faster solution to the burning problem faced by Croatian bus companies/regular carriers performing regular public line passenger transport.
"The current regulation of passenger transport is not sustainable given that public service contracts still haven´t been concluded, and without the adequate regulation of public bus passenger transport, Croatian bus companies maintaining these lines are being threatened with closures and even collapse, which would lead to the loss of more than 7,000 jobs," they warned from HUP.
They added that Croatian bus companies are still waiting for the implementation of the public service contract from way back in May 2018, when the law prescribing it was initially passed.
This non-implementation of that law, they point out, directly affects the collapse of the entire sector of passenger transport when it comes to buses, and without quality transport there can be absolutely no hope whatsoever of any revitalisation of rural areas across the Republic of Croatia.
Therefore, HUP will continue to insist on the urgent implementation of the Public Services Agreement, which has been defined by the Act since back in 2018, in order to prevent more layoffs and the further suffering and potential collapse of Croatian bus companies.
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