February 19, 2022 - Crisis in the Croatian government, as the USKOK launches investigation against several of its officials. Construction Minister Darko Horvat was arrested this morning for alleged abuse of authority, and an emergency meeting is underway. USKOK suspects that Horvat gave 2.6 million kuna in illegal incentives.

In addition to Minister Darko Horvat, as Telegram has learned, investigators have also focused on former Minister Tomislav Tolušić. Along with them, according to the information available so far, this latest procedure also applies to Horvat's former assistant Ana Mandac. Jutarnji List finds out that Deputy Prime Minister Boris Milošević and Minister of Labor and Social Welfare Josip Aladrović are also under investigation. According to the information provided so far, they are suspected of seeking employment through a connection and due to the granting of incentives.

According to currently available information, the Minister of Construction is associated with abuse of office and authority. Sources say investigators are investigating Horvat's role in the abuses suspected by his former assistant Ana Mandac. USKOK suspects that, at the request of Josipa Rimac, Mandac arranged support for craftsmen from the Ministry of Economy at the time when it was led by Horvat.

Horvat arrested

Minister Darko Horvat was arrested this morning, his lawyer Vladimir Teresak confirmed to Media Servis. USKOK suspects that Horvat gave 2.6 million kuna in illegal grants and incentives. According to information from sources close to the investigation, Minister Darko Horvat should be questioned by USKOK in the early afternoon. He will be brought to the USKOK headquarters in Vlaška Street in Zagreb, where he will be able to testify in the presence of a lawyer.

Photo: Vjeran Zganec Rogulja/PIXSELL

This morning, he was taken from Donja Dubrava in Međimurje, where his home had been searched since the morning. It is certain that investigators are following him to Zagreb, where the procedure in coordination with USKOK and the police will continue.

Finance Minister first to comment

The case was commented on by the Minister of Finance Zdravko Marić in a Croatian Radio show. He said he was surprised by the news of a police raid on Horvat's home.

"I assume that I am the first to speak on this topic, I have no knowledge and I cannot comment on that", the minister added. He referred to media allegations that Labor Minister Josip Aladrović, Deputy Prime Minister Boris Milošević, and former Minister Tomislav Tolušić were also being investigated.

"I mean, this is pure information from the media. I didn’t even get to read, driving to the show. But, any scandals do not have a positive effect on the Government", said Marić.

Emergency government meeting is underway

In addition to Minister Darko Horvat, the Minister of Pension System, Family and Social Policy Josip Aladrović, Deputy Prime Minister Boris Milošević, and former Minister Tomislav Tolušić were also targeted by investigators on Saturday morning.

The police started searching the house of the Minister of Construction, Darko Horvat, this morning. Although there is no official information, and no one from the Government has responded yet, 24sata finds out that an emergency meeting has been convened in the Government. Prime Minister Andrej Plenkovic is expected to address the media soon.

This is developing news.

For more, check out our politics section.

ZAGREB, 28 Jan 2022 - Opposition parties said in parliament on Friday they were submitting a motion for the replacement of Construction Minister Darko Horvat over the slow pace of post-earthquake reconstruction of Zagreb and Sisak-Moslavina County and insufficient absorption of funding from the EU Solidarity Fund.

GLAS party leader Anka Mrak Taritaš said all citizens were aware that Horvat could not do the job of reconstruction.

"PM Andrej Plenković will defend Horvat but deep down he, too, is aware that he cannot do this job. As long as Horvat is in this post, there will be no reconstruction," Mrak Taritaš, who launched the motion, said at a news conference attended by representatives of all parliamentary opposition parties.

55 signatures collected so far

"Two years have passed since the earthquake in Zagreb and one since the earthquake in Banija. Much has been said but little has been done," Mrak Taritaš said, noting that it was time for Horvat to go and that her motion was supported by 55 MPs.

Social Democratic Party (SDP) leader Peđa Grbin said Horvat's incompetence was causing huge damage to the country.

"Tenders are not being conducted and again there are some firms that are being investigated by the European Prosecutor's Office over corruption scandals, as well as firms that will be given millions for reconstruction. This is a typical HDZ story and one must put an end to it," said Grbin, adding that once the deadline for the absorption of EU funds expired, Plenković's responsibility would be discussed as well.

Sandra Benčić of the Green-Left Bloc said that on 15 January the government triumphantly said that the first houses damaged in the earthquake in Krapina-Zagorje County would be demolished in the spring, exactly two years after the earthquake.

"If that is not reason enough for the main coordinator of the reconstruction process to step down, I don't know what is," she said, adding that the motion was not about muscle-flexing but about whether citizens would spend a third winter in containers and those in Sisak-Moslavina County a second. "Has the state really rebuilt fewer houses than one foundation, more specifically Solidarna," she said.

Bridge: PM assuming responsibility 

Ivana Posavec Krivec of the Social Democrats group said the issue of Horvat's replacement was a matter of Croatia's future.

"If PM Plenković is not willing to replace the weakest link in his government, he is assuming full responsibility, and all those who vote for his stay assume the responsibility of inactivity. The Opposition is calling on the PM to act sensibly, this is the last moment to replace this weakest link and set reconstruction in motion. The ball is in the PM's court," she said.

Marija Selak Raspudić of the Bridge party said that by defending Horvat, PM Plenković "believes he is demonstrating his power over the Opposition, because this power play, let's be honest, is the only thing he is interested in."

She added that Plenković was assuming responsibility and gambling with his post by defending Horvat.

Selak Raspudić also pointed to the drastic, 40% increase in domestic violence across the country during the coronavirus pandemic, noting that the figure was even worse for the earthquake-struck Sisak-Moslavina County, where people were forced to stay in small housing containers.

The motion for Horvat's replacement was also supported by Emil Daus of the Istrian Democratic Party (IDS), Katarina Peović of the Workers' Front, and independent MP Damir Bajs.

Bajs said that neither the government nor its coalition partners were satisfied with the pace of the reconstruction process.

"This is the first time a minister facing replacement enjoys only conditional support from the coalition partners and the HDZ itself. Let us do something and help people start living normally," said Bajs.

For more, check out our politics section.

December the 20th, 2021 - The Republic of Croatia has an enormous 320 million euros coming to it by the end of 2021, and it must utilise it in full by mid-2023, by June of that year to be more precise. With Petrinja still shamefully waiting for redevelopment and reconstruction almost one entire year since the devastating earthquake struck, there's no time like the present.

As Poslovni Dnevnik/Suzana Varosanec writes, Minister of Physical Planning, Construction and State Property, Darko Horvat, said that Croatia is absolutely ready to accept EU grants which will be spent on reconstructing Petrinja following 2020's earthquake. He said this when in conversation with Dnevnik after MEPs approved the provision at the December the 14th plenary session in which assistance to Croatia in the amount of 320 million euros was agreed upon. The enormous sum will go to repairing the damage caused by the natural disasters of 2020.

"Given the considerable experience we've gained in preparing the applications for repairing the damage from the Zagreb earthquake (which struck in March 2020), we've encouraged the end users of these funds to start drafting project documentation. What's especially important now, given that the implementing bodies are ready to accept the funds, is that at the beginning of 2022 we expect the announcement of the first public calls,'' said Horvat.

Based on the aforementioned decision, Croatia is being provided with a financial envelope of 320 million euros, including the already paid advance of 41.3 million euros. The payment of the remaining part, a sum close to 280 million euros, is expected by the end of the year. Out of a total of about 17 billion euros in estimated earthquake damage, direct damage to the Banovina area is estimated to stand at about 5.5 billion.

As the damage is far greater than the expected FSEU aid can cover, the planned distribution of aid will be largely focused on eligible costs already incurred, as well as projects already contracted or those with certain costs and deadline security. According to available data, of the already incurred or contracted costs of around 240 million euros, almost 80 million euros has been spent on operations eligible for funding from the FSEU. As for the deadline, as was the case with the previous procedure, it is 18 months from the payment of the total amount to the budget of the Republic of Croatia.

According to Minister Horvat and the national coordinating body for the implementation of earthquake remediation, if the payment is made before the end of 2021, the implementation deadline will be June 2023. 

For more, make sure to check out our dedicated politics section.

October the 17th, 2021 - A brand new institution is set to manage Croatian state owned companies as the country edges ever closer to Eurozone accession, and the response is likely to be a very mixed bag.

As Poslovni Dnevnik/Marija Brnic writes, the establishment of a new body for the management of state property, more precisely Croatian state owned companies, is currently being prepared. This is the result of the commitments that Zagreb has accepted within the process of introducing the euro as Croatia's official currency, in order to raise the efficiency and improve the quality and operations of Croatian state owned companies.

Last week, the government appointed a steering committee to work on an Action Plan for this task, and the competent Ministry of State Property, headed by Darko Horvat, has taken its first step - launching a public debate on a preliminary assessment of the new Law on Legal Entities owned by the Republic of Croatia, which intends to bring order to corporate governance policy.

The basis will be the guidelines given to the government this summer by the OECD, which proposes the establishment of a coordination body that will monitor the activities and results of all Croatian state owned companies, meaning the placing of all enterprises under state ownership across Croatia under one ''cap'' for monitoring and management.

This new body, according to the OECD, would be of the agency type directly accountable to the government or possibly located in a ministry, provided that it isn't in charge of enacting regulations.

It sounds like a mere formality and a new accumulation of administration, which the public will hardly welcome, especially if we remember the numerous transformations that the state-owned company management system has undergone in Croatia already, from the Privatisation Fund, the State Property Management Agency to the Centre for Restructuring and Sales. and now here's a special ministry in charge of state property.

However, the OECD claims that the introduction of such a specialised body is very necessary, because the existing system, although improved in the meantime, is still not up to par in any way, shape or form. That is likely not a shock to anyone who has had dealings with one of these companies.

In short, their analysis of Croatian state owned companies and the entire corporate sector identified a number of ambiguities and shortcomings that this new “unit” will seek to address, from regulatory inconsistencies to insufficiently defined ownership policy objectives in terms of financial and non-financial expectations, and incoordination and poor communication between ministries.

The new agency should not only gain a range of powers in overseeing management standards, monitoring performance and publishing public reports of these Croatian state owned companies, but also take on an important role in appointing supervisory boards.

More specifically, it would propose candidates, which, according to the OECD's estimates, would allow for greater expertise and a shift away from politics, which is desperately needed in Croatia. There is also the possibility that the new agency will get direct ownership in state owned companies, first for a small part of the portfolio, and gradually for the entire thing.

For more, make sure to check out our politics section.

ZAGREB, 25 Sept, 2021 - Two schools in the earthquake-struck Banovina region will be built anew with the help of a World Bank loan, the Construction, Physical Planning and State Assets Ministry said in a statement on Saturday.

Minister Darko Horvat met earlier this week with visiting World Bank Country Manager for Croatia and Slovenia Jehan Arulpragasam, and the main reason for his visit was a $200 million loan Croatia was given by the World Bank for post-earthquake reconstruction and recovery in the area of Zagreb, hit by a 5.5 earthquake on 22 March 2020, and for strengthening the capacity of the public health system amid the coronavirus pandemic.

Key data on the project and its progress as well as challenges Croatia has been facing in the process of reconstruction were presented at the meeting.

The meeting also focused on Minister Horvat's proposal that the loan should also refer to the construction of two new secondary schools, in Sisak and Petrinja, towns in Sisak-Moslavina County, which was hit by a 6.2 earthquake on 29 December 2020.

Horvat said the meeting discussed the use of resources made available to Croatia to build two schools in Sisak-Moslavina County so as to create conditions for the safe and sustainable education of children in the earthquake-affected area.

Along with the reconstruction of houses and buildings, the reconstruction and construction of schools and medical facilities is one of our main priorities, the minister said.

The meeting was held as part of a five-day working visit of World Bank officials, who visited locations and facilities in Zagreb and in Sisak-Moslavina and Karlovac counties most affected by the earthquake, whose reconstruction is to be financed with the World Bank loan.

The 22 March 2020 earthquake in Zagreb and its surroundings is estimated to have caused damage to buildings in the amount of some HRK 86 billion, which is more than 60% of the state budget.

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ZAGREB, 24 Aug, 2021 - Member of Parliament Anka Mrak-Taritaš on Tuesday said that it seems there won't be anything of Zagreb's reconstruction following the earthquake that hit the city 17 months ago and that the lack of goodwill for reconstruction is "the greatest shame of Andrej Plenković's government." 

Seventeen months after the earthquake, there is still nothing regarding Zagreb's reconstruction. There is no longer even any meetings between the government and City authorities. Damir Vanđelić, the director of the Fund for Reconstruction and Economy Minister Darko Horvat have even stopped debating in the media about who is more at fault for that," Mrak-Taritaš told a press conference on Tuesday.

As an example of what could have been done in that time, she recalled that the Empire State Building with its 102 floors was built in sixteen months' time, "and without disrupting traffic."

MP Mrak-Tartiaš warned that eight months had passed since money from the EU Solidarity Fund was paid into the government's account and "that Croatia is at risk of being the first member state to not spend that money within the set deadline and that the country might be compelled to repay it to the EU budget, while at the same time the government is using alibis why things are not being done, from the law to the programme of measures and the fund." 

The sole GLAS lawmaker believes that "it is absolutely certain now" that there won't be anything of Zagreb's reconstruction as that "requires the know-how, good management and will, yet there is none of that." She concluded that the fact that there is no will is the Plenković's government's greatest shame and sin of not doing anything."

For more about politics in Croatia, follow TCN's dedicated page.

ZAGREB, 18 Aug 2021 - Physical Planning and State Assets Minister Darko Horvat said on Wednesday that workers of the Orljava clothing manufacturer had received three wages that had been promised to them and that intensive talks were underway with two potential partners for that Požega-based company.

Commenting on statements made earlier in the day by a member of parliament Katarina Peović and New Union leader Mario Iveković, Horvat said that problems in Orljava had begun in 2012 and recalled that the government had promised to secure the payment of three overdue wages and do its best to find a strategic partner for the company.

The wages have been paid and talks are currently underway with two potential partners, Horvat said after a meeting of the inner cabinet.

The minister recalled that a major complaint by the German company Olymp, which returned its order to Orljava, was one of the reasons for the difficult situation at Orljava.

Olymp does not want to maintain its business relationship with Orljava but it does want to maintain cooperation with the Đakovo-based Hemco, and talks have been underway with that company, he said.

Hemco is interested in taking a lease on Orljava's premises and hiring back about 70 Orljava workers, Horvat said, stressing that the approach to ailing companies had changed, which was why bankruptcy proceedings were launched for Orljava on 13 July.

So far Orljava's losses have been covered by the government or from the state budget but the government no longer wants to maintain that approach. As long as there is interest in the brand and products, the government will try to have all workers hired back but it will also help find a strategic partner to invest in the company and raise production to a higher level to make its products competitive, Horvat said.

Earlier in the day, MP Peović and union leader Iveković warned about the difficult situation at Orljava, noting that the government should provide more significant support to it, considering that it was its sole owner.

Warning that on 22 July most of the remaining 172 workers were laid off, Peović said that responsibility for that rested solely with the government.

For more about politics in Croatia, follow TCN's dedicated page.

ZAGREB, 18 Aug 2021 - The sole MP of the Workers' Front Katarina Peović and leader of the Novi Sindikat trade union, Mario Iveković, warned on Wednesday of the difficult situation at the Orljava textile company, underscoring that the government should give more substantial support to that government-owned factory.

Warning that on 22 July, most of the remaining 172 workers were laid off, Peović told a press conference that in the current situation, the responsibility lay entirely with the government, which is the 100% owner of the Požega-based Orljava textile company.

"It is unacceptable that the government failed to react when workers hadn't received a salary for three months until a protest rally was staged in St Mark's Square on 30 June," she said.

It didn't react, she warned, even when trade unions tried to speed up the resolution of the problem and enter into communication with the government, and now the ruling party seems to be on holiday and is not getting involved in the bankruptcy proceedings initiated to maintain production.

She recalled that both Prime Minister Andrej Plenković and Physical Planning and State Assets Minister Darko Horvat had been promising that the bankruptcy proceeding would be initiated primarily to maintain production.

Peović said that the Workers' Front had sent questions to Prime Minister Plenković and Minister Horvat about the situation in the Orljava company but hadn't received answers.

According to her, problems at the Orljava company started when German company Olymp, with which Orljava had had long-standing cooperation, reduced orders and then terminated them.

Also, the Olymp company wanted to know about the government's long-term plans for Orljava but received no answers, she said.

Peović also said that if Orljava's management had not been doing its job, Minister Horvat was directly responsible for that and should have replaced it.

For more about politics in Croatia, follow TCN's dedicated page.

May the 16th, 2021 - Minister Darko Horvat has come forward to answer questions about whether or not the Croatian Government has any plans up its sleeve to sell Croatia Airlines and even the well known and much loved brand Podravka.

Croatia Airlines has been knee deep in financial trouble since long before anyone had even heard of COVID-19, which, of course, has done the enfeebled domestic carrier no favours whatsoever. The ongoing pandemic is only working to deepen the airline's already gravely serious issues and it doesn't seem like Ryanair's Zagreb arrival is going to be of any assistance to what many refer to as a company which charges totally unreasonable amounts for the absolute basics in air travel.

Could a sale be on the cards for the ever-problematic Croatia Airlines? It seems that at least currently, that isn't in the works.

As Poslovni Dnevnik writes, Ministers Darko Horvat and Nina Obuljen Korzinek presented their reforms and investments as part of the much talked about Croatian National Recovery and Resilience Plan which are specifically related to the renovation of buildings and culture following the earthquake and the pandemic.

During the presentation of planned reforms in rehard to another burning issue in this country, which regards state property, Minister Darko Horvat answered the question as to whether the government plans to sell Croatia Airlines or Podravka, Media Servis reports.

"Neither this government nor I, as a minister, are considering any privatisation or sale of the Croatian share in Podravka. I'm sure, like my colleague Minister Oleg Butkovic, that Croatia Airlines either needs a quality and good strategic partner or must remain in the Croatian portfolio anyway. To lose an air traffic operator... well, I don't think it would be good or wise,'' Darko Horvat explained.

For more on the Croatian Government and state owned companies, follow our dedicated politics page.

ZAGREB, 22 March, 2021 - Physical Planning and Construction Minister Darko Horvat said on Sunday, ahead of the first anniversary of the 22 March 2020 earthquake in Zagreb, that preparations for the process of reconstruction were underway and that organised reconstruction would start in June.

"The process has not come to a halt. It is complex and is proceeding slowly," the minister said in an interview with Nova TV, noting that buildings damaged in the earthquake had been prepared for demolition or reconstruction.

He noted that a delay was possible if problems occurred in the procurement and appeals procedures.

"But we plan to have concrete contracts and start with organised reconstruction in June," Horvat said.

He noted that the reconstruction process would be carried out by Croatian construction companies but that foreign ones could be hired as well, depending on the dynamic of obtaining the necessary funding.

Asked if the state would cover interest on loans to be taken by citizens for reconstruction costs, Horvat said that this was being discussed with banks and that it yet remained to be seen if the state would also take over the financing of a part of the loan principal.

He recalled that staff at his ministry could help citizens write requests for reconstruction and that those requests could be submitted by mail or through the e-obnova system.

Until all contracts for the entire job of reconstruction are signed, there will be no excavators in the streets, Horvat said.

"If we want to use money approved by the European Commission fairly and in line with strict EC rules, the procedure must be followed," he said.