March 25, 2020 - Press Release - “VOICE OF ENTREPRENEURS” INITIATIVE REQUESTS DISMISSAL OF MINISTER HORVAT

The analytics team of the VOICE OF ENTREPRENEURS initiative led by eminent economic and political analyst Vuk Vuković, PhD, carried out an in-depth assessment of jobs already in jeopardy, potential layoffs and the cost of efficient measures the Government should implement to prevent the economic collapse. According to the assessment of the analysts, 730,000 jobs in total will be in jeopardy within the next two months and the number of jobs which would be lost within the next three months could reach 300,000. Because of insufficient measures adopted by the Government for the purpose of assisting the economy, they have requested the Prime Minister of the Republic of Croatia to dismiss Minister Horvat.

To avoid sweeping layoffs in the private sector, the initiative has proposed to the Government the measures to save the economy. The cost of these measures over the first three months would be 4.3 billion Croatian Kuna i.e. 8.6 billion Croatian Kuna over the period of six months. The stated cost refers to exemption from payment of the corporate income tax, health insurance and pension contributions, local income tax, public utility charges, urban lease and other local charges. In addition, the initiative has proposed a one-off abolishment of 4.9 billion Kuna of parafiscal charges over the period of six months.

For minimum wage subsidies, for which a measure has already been adopted by the Government for a part of entrepreneurs and the applications for which are already in course, additional 7.1 billion Kuna would be spent over the period of the next three months i.e. 14.2 billion Kuna over the next six months. The total cost of the stated measures and abolishment of parafiscal charges would be 16.3 billion Kuna over the period of the next three months i.e. 27.7 billion Kuna over the next six months. These measures would account for 4.1% of the GDP over the period of three months i.e. 6.9% of the GDP over a more likely period of six months, which is significantly less than the GDP percentages other countries have projected.

If the Government decided to intervene with the stated measures aimed at 185,000 jobs which are most at risk, the total cost of measures, with the abolishment of parafiscal charges, would be 8.3 billion Kuna over the period of 3 months, which is 2.1% of the GDP, or 11.8 billion Kuna over the period of six months which is 2.9% of the GDP.

„Considering that many other countries, whose financial situation is even worse than ours and which are even more indebted, have taken even more substantial financial measures than ours, we believe that these would be initial measures which would ensure at least some kind of continuity of operation of the private sector and the Croatian economy”, said Vuković.

A survey carried out among the members of the initiative prior to presentation of the Government measures has demonstrated that only 6.8% of entrepreneurs plan to accept and use the Government measures. As many as 68% of the surveyed stated that they are waiting for better and more quality Government measures, while 9% will choose the most extreme measures such as layoffs, suspension of payments to the state/city, closure of businesses or suspension of businesses which are in the course of opening. Aco Momčilović, in charge of carrying out surveys of the initiative, stated that the data obtained prove the failure of the measures to date and that a set of better measures is needed.

Hrvoje Bujas, one of the founders of the initiative, expressed his dissatisfaction with the presented Government measures after the Government’s press conference and his informal meeting with Finance Minister Zdravko Marić. He stressed that the Government has transferred the whole crisis risk on entrepreneurs. He called donating ministers’ March salaries for Zagreb’s earthquake relief “cheap populism” because tens or thousands of people working in the private sector and filling the state budget for the purpose of salaries of Government members will end up in the street. “Entrepreneurs are facing a tough decision: to apply for Government measures or to lay off their employees and close the businesses that took years or decades to build,” concluded Bujas.

Dissatisfied with the reactions from the Government and, in particular, with the reaction of Economy Minister Darko Horvat, as well as with insufficient measures which will result in a wave of dismissals, the VOICE OF ENTREPRENEURS initiative has requested from the Prime Minister of the Republic of Croatia the dismissal of the Economy Minister.

“By adopting these measures, Minister Horvat has rejected the proposal of our initiative, all relevant business associations and experts on the necessity of tax and contribution write-offs and considering his inappropriate public statements, he has shown that he is incompetent to manage his department in a crisis and that he does not represent the interests of the Croatian economy and society in whole. We need a Minister who will stand up for all businessmen in the same way that Minister Beroš stands up for health”, all initiative founders stated and requested immediate dismissal of Minister Horvat. “Appoint a competent Croatian Economy Minister and urgently establish an Economic Crisis Headquarters which must include representatives of both entrepreneurs and the economic profession”, the initiative members urge.

So far, the VOICE OF ENTREPRENEURS initiative has brought together more than 60,000 entrepreneurs and their employees, business owners and freelancers. Supported by entrepreneurs and business owners who generated over 11 billion Kuna in revenues in 2019, the goal of the initiative is to maintain the livelihood of as many employees and entrepreneurs as possible but also to ensure the survival of the Croatian economy facing the potential crisis which could last for years. The initiative’s requests are supported by many professional associations such as the Independent Hospitality Industry Association, Association of Event Organisers and Producers, Women in Adria, Croatian Association of Communications Agencies (HURA!), (HURA!), Croatian Independent Software Exporters (CISEx), MBA Croatia and the Croatian Artificial Intelligence Association (CRO.AI).

As Index writes on the 25th of March, 2020, after the announcement of measures to assist the economy and subsequent public appearances by Croatian Economy Minister Darko Horvat and many relevant experts, Glas Poduzetnika (Voice of Entrepreneurs) officially requested the dismissal of Minister Horvat and the establishment of an Economic Crisis Headquarters this morning by Prime Minister Andrej Plenkovic.

''Dear Prime Minister,

The Voice of Entrepreneurs initiative has brought together more than 60,000 entrepreneurs and our employees, business owners and freelancers in just a few days.

We've been communicating for a week now that we believe the measures taken to help the economy are insufficient and will result in a wave of dismissals. You can see from yesterday's and today's media reactions that we were right.

By adopting these measures, Minister Horvat has rejected the proposal of our initiative, all relevant business associations and experts on the necessity of tax and contribution write-offs, [this has been coupled] with inappropriate public statements, showing that he isn't competent to manage his department in a crisis and that he doesn't represent the interests of the Croatian economy and society in full. We need a Minister who will stand up for businessmen in the same way that Minister Beros stands up for health.

We hereby request that you immediately dismiss Minister Horvat, appoint a competent Croatian Economy Minister and urgently establish an Economic Crisis Headquarters, which must include representatives of entrepreneurs and the economic profession,'' the letter to Prime Minister Plenkovic states.

Within three months, more than 700,000 people across Croatia could lose their jobs.

As a reminder, the Croatian Government presented measures to assist the economy recently, which were met with an array of negative reactions from entrepreneurs at a press conference, who have claimed that the burden of the ongoing coronavirus crisis is falling on the backs of companies, many of which are already looking bankruptcy in the eye thanks to the current work ban.

According to estimates from the Voice of the Entrepreneurs initiative analytics team, 185,000 jobs are already in jeopardy across Croatia at the moment, and that figure could exceed 700,000 within just three months.

A survey of the Voice of the Entrepreneur (Glas Poduzetnika) group - you can follow them here on Facebook - had the follow results to four options asking about Minister Horvat's performance: 

1. Excellent, his new measures are great - 0%

2. He is trying, we need to help him - 1%

3. Just a regular uhljeb - 11%

4. He is incompetent and should be replaced - 88%

Follow our business page for more. For rolling information and updates in English on the coronavirus pandemic in Croatia, stay up to date with our dedicated section.

March 19, 2020 - A look at the first ten measures proposed to help the Croatian economy during the corona crisis. 

Following the decision to prevent the rise in prices of critical products for supplying the Croatian market and exporting those products for which a shortage in Croatia could appear, Minister Darko Horvat presented the first ten measures from the Ministry of Economy, Entrepreneurship, and Crafts, which were proposed at a Government session on Tuesday, reports Vecernji List on March 16, 2020. 

These measures will be aimed primarily at entrepreneurs and craftspeople. 

“The meaning of all the measures we plan to take and which we have held very intensive discussions about so far is to preserve jobs and the domestic economy, and to provide the necessary liquidity to our entrepreneurs, through a moratorium or deferrals of loan obligations, the introduction of new credit lines for working capital funds and the like,” explained the minister. Horvat also stressed that changes in certain economic relations are expected in the coming period, both nationally and globally.

“At the moment, we are aware that carriers, traders and exporters suffer the most, but we must take into account all possible scenarios, considering all branches of the Croatian economy, from craftspeople, through micro, small and medium-sized enterprises, to large companies,” said Horvat. 

You can find the suggested measures below:

1. Reprogram existing loans (with the introduction of a grace period in repayment of the loan principal) and introduce a moratorium on the credit obligations of HBOR clients and commercial banks on existing placements;

2. Approval of new liquidity loans to economic operators for financing salaries, overheads, and other basic operating expenses, in cooperation with commercial banks;

3. Approval of guarantees (insurance policy) to export commercial banks and HBOR within the framework of the guarantee fund for export insurance;

4. Increase the scope of the guarantee fund for export insurance by including the tourism sector, the indirect exporting entities or the suppliers of direct exporters in the eligible beneficiaries;

5. Provide for the possibility of introducing, through the Amendments to the Investment Promotion Act, the extension of deadlines for the implementation of investment projects and the introduction of an additional grace period of three years to preserve jobs;

6. Intervention in the purchase of surpluses in livestock and crop production, fruit and vegetables, and other products from potentially endangered industrial and agricultural producers;

7. Increasing the rate of the HAMAG-BICRO guarantee from 65% to 80% of the loan principal with a shortened processing procedure and an additional allocation of EUR 15 million for Micro working capital loans (up to EUR 25,000), with a maximum interest rate of 1%;

8. Moratorium on all installments of ESIF Micro and Small Loans by 31/12/2020;

9. Increasing the de minimis grant limit from EUR 200,000 to EUR 500,000;

10.The possibility to mobilize part of the budget as a contribution to sectoral intervention grants to entrepreneurs (national grant).

To read more about business in Croatia, follow TCN's dedicated page.

As Novac/Adriano Milovan writes on the 1st of November, 2019, innovation is the basis of further economic growth, and Croatia is a land of huge potential when it comes to innovation, states a message from the conference "Croatia - a Place for Innovation and Smart Investment", organised yesterday by the Ministry of Economy and the Croatian Chamber of Commerce (HGK) at the Westin Hotel in Zagreb.

The aim of the conference was to connect innovative Croatian companies with investors and other partners. These involve more than 300 projects, which have crystallised on thematic innovation councils, with an estimated value of more than 5 billion kuna. They are all open to investment, which is why matchmaking meetings were organised at the end of the conference.

Although Croatia has a long tradition in innovation, the realisation of any of it has so far been stalling and lagging behind far more than it should be. Simply put, it lacked the path for the commercialisation of its innovation. However, Darko Horvat, Minister of Economy, is convinced that a step has now been taken in the right direction.

''Networking the real entrepreneurial sector, academia and local and central government officials and getting all of that through a maze relatively quickly, all this was done this year and in the future we'll talk no more about speed but acceleration,'' Horvat stated at the conference, adding that things are definitely changing for the better in Croatia.

Luka Burilović, President of the Croatian Chamber of Economy, recalled the long tradition of innovation in Croatia and said that Croatian innovators are stilling following global trends.

''Today, we have a new generation of minds, who are pushing our economy into a new, digital age,'' Burilović pointed out, pointing specifically to Rimac Automobili's owner, Mate Rimac.

Tomislav Sokol, MEP, warned that the EU is lagging behind the US, China and India in innovation. One of the main reasons for this, at least according to Sokol, is the overregulation of the European Union, which is why the aim is to reduce red tape by a third.

Despite its aspirations and goals, Croatia still lags behind others in R&D investment. For example, according to Eurostat's data for 2017, appropriations for this purpose in the EU accounted for 2.06 percent of GDP, and in Croatia, they amounted to 0.86 percent of GDP.

On the other hand, in Israel, these expenditures, according to Nili Shalev, director-general of the Directorate for Research and Development at the Israeli Innovation Agency, have reached 4.3 percent of GDP, with the largest share being provided by the private sector. The main driver of investment in innovation in Israel are large multinational companies, but the state, and especially the military, are both contributing, Shalev said.

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ZAGREB, August 27, 2019 - Croatian Minister of Economy, Entrepreneurship and Crafts Darko Horvat will conduct a working visit to Finland and Norway from August 27 to 29 at the invitation of the Kongsberg company and he will tour Patria Aviation Oy, AIM Norway AS and Kongsberg Gruppen ASA, the Economy Ministry said on Tuesday.

On that occasion the minister will discuss the conditions for offset obligations to be fulfilled, future cooperation and of the presence of Patria and Kongsberg on the Croatian market, which would include some form of strategic partnership, transfer of know-how and technology, the ministry added.

In mid-June the Jutarnji List daily ran a report, later confirmed by Minister Horvat, that Patria was interested in establishing a centre for the maintenance, repair and overhaul of aircraft and helicopters at the Aviation Technical Centre (ZTC) in Velika Gorica, on the outskirts of the capital Zagreb.

A delegation from Patria visited the ZTC and a spokesman from the company told the daily that Patria wishes to establish a long-term partnership with state-run companies involved in maintenance, overhaul and repairs in Europe, and that the Adriatic region was very interesting in that regard.

Patria is a Finnish provider of defence, security and aviation life-cycle support services and technology solutions. It is involved in the maintenance of civil and defence aircraft and military helicopters. Patria is also interested in ZTC due to future large contracts for the maintenance of Croatia's helicopters.

ZTC is a state-owned company that maintains military and civil aircraft and helicopters. However, it has been faced with huge business problems for years, Jutarnji List wrote.

Confirming the daily's claims, Minister Horvat said that negotiations were being conducted with Patria, Kongsberg and a Belgian company regarding investments in the ZTC.

More news about Economy Ministry can be found in the Business section.

As Lea Balenovic/Novac writes on the 3rd of June, 2019, the Croatian Ministry of Economy recently awarded Croatian entrepreneurs twenty contracts totalling an enormous 85 million kuna. To be more specific, these are contracts funded by non-refundable EU funds for which the tenders were announced at the end of last year.

The aim of these tenders, as Minister of Economy Darko Horvat explained, is to "increase production and exports and create jobs, as well as to strengthen the competitiveness of small and medium-sized enterprises through the presentation of their products and services on the international market".

One of the companies that which will use these opportunities for job creation and business optimisation is certainly the Croatian company IT-Graf, which deals with printing, and which has plans to invest almost 15 million kuna. Non-refundable EU funds in the amount of 6.6 million kuna were awarded to that particular Zagreb-based company.

"We'll all invest in new machines and modernisation, ie, the automation of printers, with the goal of going to foreign markets and exporting, and our sophisticated products will mean we need high quality staff and we will open about twenty new work positions,'' stated Tomislav Ivičinec, Managing Director at IT-Graf, who doesn't have any issues with the lack of a workforce in Croatia or finding workers because, as he himself said, "you just need to pay the man and then there's no problem".

In addition to this Croatian company, Hangar 18 has also received funds to increase its overall international competitiveness, which is due to its permanent investments remains "a permanent guest of such events", according to Damir Kralj, the director of the company.

''We're dealing with information technology and mobile technology, ie, we produce smartphones, TVs and all of their accessories, and we'll use this 950,000 kuna to present our products at the Barcelona fair,'' said Kralj, adding that Hangar 18 is planning to build a new factory in Koprivnica in which an additional fifteen to twenty people will be employed.

With the help of these tools, Neon Bjorn, a Zagreb-based company offering a software solution for travel agencies, as well as for travelers who prefer to organise their own travel plans, has the opportunity to internationalise their business and product presentation. As explained by the director of this Croatian company, Vesna Kota, "it helps in the overall process and shortens the time involved in travel organisation".

''With the allocated 433,000 kuna, we'll place our product on foreign markets and sell it in far-off locations. We're expanding to Cape Town, Dubai and Beijing and in European destinations such as Barcelona and London, and the solution is available to tourists who wish to visit destinations both in Croatia and those outside of it,'' Kota explained, adding that their desire "to bring more tourists to Croatia''.

Make sure to follow our dedicated business and politics pages for much more on Croatian companies, Croatian products and services and the measures put in place to aid Croatian entrepreneurs.

The Chinese interest in Croatian projects is continually growing, or so it seems, and there is now room to dare when it comes to the potential Chinese rescue of Uljanik and 3 Maj at the eleventh hour.

As Marija Brnic/Poslovni Dnevnik writes on the 2nd of May, 2019, the Chinese CSIC representatives currently visiting Croatia to see the state of Croatia's ailing Uljanik (Pula) and 3 Maj (Rijeka) shipyards have expressed clear interested in new projects with Croatia's shipyards, but only if the Croatian state covers the cost of what has already failed, there have also been mentions of the diversification of production, but they don't want guarantees.

If there is an agreement between the Croatian Government and the Chinese CSIC about reviving Uljanik and 3 Maj, it will be done so with regard to a combination of the models which were discussed with the previous two strategic partners, Darko Končar and Tomislav Debeljak.

According to the explanation given by Minister of Economy Darko Horvat after the final talks and the three-day visit of CSIC's representatives, the Chinese are indeed interested in starting with new projects, while the state should cover the cost of old, failed projects, meaning it will need to take place on a clean slate. It's also more than likely that the sites of today's Croatian shipyards will see other projects developed there, that is to say, the diversification of activities will occur.

"If they don't see the possibility of continuity of shipbuilding at this time, we want other industries to take place here, and not just those exclusively involved in shipbuilding," Minister Horvat stated. Therefore, unlike Danko Končar's initial idea, Chinese diversification would not be a real-estate business, but would involve some sort of other, new production aside from shipbuilding. And the clean starting position the Chinese have indicated that they want, which is similar to what Tomislav Debeljak sought but is unlike his idea, almost certainly means declaring the bankruptcy of the two shipyards.

"We don't expect them to finance failed attempts to build ships that haven't been completed. The starting position means new projects,'' stated Horvat in reference to the wishes of the Chinese.

The continuation of construction in Pula and Rijeka in partnership with CSIC would in any case have a completely different financing philosophy. The Chinese say, after the talks, that they are completely astonished at the reliance of state guarantees for shipbuilding. To repeat what Finance Minister Zdravko Marić stated recently, it's much too early to talk about exactly what changes might occur in this context following their entry into Uljanik and 3 Maj. Over the next few weeks, CSIC's senior people will analyse the collected information and determine whether or not, and indeed in what form they're interested in entering into the structures of Croatia's enfeebled shipyards.

At this moment in time, Darko Horvat has merely announced that any form of Chinese entry would involve a new way of financing, with different sources, a different way of drafting project documentation, and would involve no state guarantees. After the final talks at Zagreb Airport, Horvat didn't provide any more specific information, nor the deadlines within which he expected to receive feedback from the Chinese, but he did appear to try to leave the impression that he was optimistic about the whole situation. The Chinese representatives themselves, however, didn't give any media statements.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese projects and investments in Croatia, doing business, working and investing in Croatia and much more.

Click here for the original article by Marija Brnic for Poslovni Dnevnik

There has been much talk, both positive and negative, about the potential for Chinese investment in Croatia. They're already building the long awaited Peljesac bridge down in Dalmatia and have since expressed great interest in the Port of Rijeka and in constructing a railway line linking Rijeka to Karlovac. 

Many believe that the apparently huge interest of the Chinese (and their money) is a bad omen, and that Croatia will end up trapped by yet more debt it can't pay off in the end. Others see it as a welcome move, despite their suspicions. Whatever the truth behind China's interest in Croatia is, the EU aren't too pleased with it, especially in the case of Peljesac bridge. Peljesac bridge is one of the most important strategic projects in the history of the country, and it has been financed mainly by European Union funds, the fact that a Chinese company has been chosen to construct it hasn't filled the European Union, nor the Commission, with much joy.

What will be the situation with one of Croatia's most pressing issues of late, its ailing shipyards? As Uljanik's dire situation continues to worsen, could the already suggested investment from China be its saviour at the eleventh hour? Maybe.

As Poslovni Dnevnik writes on the 29th of April, 2019, a delegation from China's largest shipbuilding company, China Shipbuilding Industry Corporation, headed by Hu Wenming, the head of the company, will arrive in Zagreb on Monday, as N1 reports.

The Chinese delegation will first be welcomed by Prime Minister Andrej Plenkovic and his government ministers at Banski dvori in the heart of the capital city. After exchanging all of the usual diplomatic pleasantries, they will discuss the burdensome issue of Uljanik (Pula) and 3 Maj (Rijeka), which the Chinese guests will visit on Tuesday.

At today's meeting between the Croatian premier and the Chinese delegation from CSIC, the bosses of Uljanik and 3 Maj, Emil Bulić and Edi Kučan, will present, as was confirmed to N1 by the Croatian Government.

Will the giant Chinese company actually agree to invest in Croatia's ailing shipyards, however? The answer to this question could be known definitively in as little as ten days, Economy Minister Darko Horvat announced last week.

Concerning the potential interest of the Chinese for the Uljanik and 3 Maj shipyards, Minister Tolušić said that this really is "probably the last chance to do something." If there is any possibility whatsoever that the Chinese will enter into some sort of investment arrangement to rescue the shipyards, they'll enter. If there's no possibility, they won't. We'll leave it up to them.'' stated Horvat.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese investments and projects in Croatia, doing business and investing in Croatia, working in Croatia, and much more.

Next week, a delegation of eighteen people from the largest Chinese shipyard, the China Shipbuilding Industry Corporation, are set to visit Croatia's ailing Uljanik.

As Poslovni Dnevnik writes on the 26th of April, 2019, this is the second day is the National Economy and Entrepreneurship Consulting conference, organised by the Ministry of Economy and Entrepreneurship in Vodice. Economy Minister Darko Horvat told N1 televizija that the Republic of Croatia ''wants to become a country of investment and development, even if it isn't there yet".

"What I do dare to say, and with full certainty, is that Croatia has an innovative network, we have to make every effort to create positive trends, but we can't expect a big boom in just one or two intensive years, but the trends are changing. What makes me happy is that our own accumulation which has been earned by entrepreneurs is slowly returning back into circulation, that this money is no longer sitting in banks, in accounts. This gives us the encouragement that we'll gain that momentum this year, too,'' Darko Horvat stated.

How much have the problems with Uljanik slowed the economy down?

"They stopped any acceleration. Given the fact that so far, we've spent nearly three and a half billion kuna on guarantees,'' Horvat said.

The Dredging and Maritime Management company, owned by the Jan De Nul Group, requires Uljanik to refund all advance payments plus interest on a dredger which is being built in the Pula shipyard, whereby a refund of part of the advance has been secured by state guarantees. Such an outcome could cost the Croatian state almost one billion kuna.

"The contracted period is seven days, but I'm not sure that will happen in that time because Uljanik has no liquid funds and we'll have to continue talks and negotiations with Jan De Nul. And Mr. De Nul is aware that these talks end up going nowhere if he decides on the forcible charging of advances, he's aware that the shipyard in Pula isn't ready to complete that vessel. 

If the Chinese do decide to invest in Uljanik, then there are two variants, Horvat said: "to enter as a strategic partner, or to buy one shipyard, and the other, and become the 100 percent owners."

The court decision in Pazin has, for the third time, postponed the bankruptcy hearing for Uljanik. 

"Regardless of the court's decision, we'll continue talking with the Chinese," Horvat said.

Make sure to follow our dedicated business page for more on Chinese investments in Croatia, Chinese-Croatian business relations, Chinese projects in Croatia and much more.

As the Chinese show greater interest in various Croatian strategic projects, the EU and the EC become more and more uneasy at the thought of such a heavy Chinese business presence in Croatia. As the EC changes its attitude towards some Croatian projects to which it reacted negatively in the past, has the Chinese influence rendered this change of heart senseless?

As Novac/Kresimir Zabec writes on the 13th of April, 2019, Croatia wants to finance the construction of the railway line from Karlovac to Rijeka, covering a length of 170 kilometres with EU funds, because that's more favourable to Croatia than doing it through a concession, stated Croatian Minister of Transport Oleg Butković at the construction site of Pelješac bridge recently.

Ironically much like Chinese whispers, it began to circulate in the media that everything had already been agreed with the Chinese, and that China's CRBC which is already building Pelješac bridge would construct the railway line via a concession model. Economy Minister Darko Horvat has thus announced giving the Chinese company a fifty year concession. However, Butković has very clearly stated that there has been absolutely no direct agreement with the Chinese and that everything will go through a tender, as usual.

''If we decide on a concession tender, then Chinese companies can also apply. If the line is built using EU funds, Chinese companies will be able to bid to be the contractors for the project,'' said Butković.

EU funding for the project is much more favourable for Croatia because it doesn't affect the growth of public debt. Should the case result in giving a concession to a Chinese company, they would build and finance it, but with government guarantees amounting to 1.7 billion euros, which is something the state can ill afford. According to current projections, the entire line should be completed by 2030.

Of the 270 kilometre of railway line from Botovo on the Croatian-Hungarian border, to Rijeka on the shores of the Northern Adriatic, the section from Karlovac to Rijeka is currently not covered at all by any form of EU co-financing.

A few years ago, the European Commission told the Croatian Government quite clearly that they would not finance that part of the line from Karlovac to Rijeka because it was too expensive and it just doesn't pay off. After that, the Croatian Government turned to the Chinese who were constantly showing interest in constructing that section. Now that the negotiations between China and Croatia have entered a much deeper and more serious phase, signals from Brussels, more specifically the European Commission, have been arriving which indicate that they are, despite all, still interested in the project.

Although that railway line is not officially part of the trans-European transport network, senior officials of the European Commission's Directorate General for Transport have openly told reporters that the Commission is ready to co-finance this project, and that it is a very important part of the European budget planning in the period commencing in 2021. Quite a turnaround, no?

In addition, this railway line is part of the line from Rijeka to the Hungarian border, which the European Commission has invested around 400 million euros into the modernisation and construction of, and that obviously doesn't quite sit well with the idea of the entrance of the Chinese into this project. According to statements, the ultimate goal of the overall project is to build a new bridge to the island of Krk and to build a new port on the island for container transport, which is an idea that the Chinese are also very interested in.

What stage are the works in?

Rijeka - Zagreb

The railway line from Rijeka tp Zagreb to the Hungarian border is part of the international Mediterranean Corridor connecting southern Europe with Central and Eastern Europe. The modernisation of this line would be of great importance to the Port of Rijeka. The modernisation and the construction of these lines are all in different stages of execution.

Botovo - Koprivnica - Križevci

In 2016, the European Commission approved 240 million euro for Croatia to build this section, but the contractor for the job hasn't yet been selected. A tender is in progress, but it has been stopped once again due to an appeal lodged by an Italian company.

Križevci - Dugo Selo

This is the only section of the track where works are ongoing. The European Union has invested about 180 million euros in this project, but works began a year and a half late because of contractor issues.

Hrvatski Leskovac - Karlovac

The design of this part of the line was co-financed by the EU in the amount of about 6 million euros. It is expected that tenders will be announced to modernise the existing works and build another track. The value of the works is estimated at 315 million euros and is planned to be funded through EU funds.

Karlovac - Oštarije

An entirely new two-track railway would be constructed on this part of the track, and the value of the works would be estimated at about 400 million euros. Project documentation has been produced, which has been paid for by the EU in the amount of 9 million euros.

Oštarije - Škrljevo

This, which is considered to be the most challenging part of the line, hasn't yet been fully defined, and technical documentation is being prepared by the EU, for which it has paid nearly 6 million euros. The value of the works on this section is estimated at as much as one billion euros.

Škrljevo - Rijeka - Jurdani

Project documentation was produced by the EU at a cost of 8.5 million euros. The value of the works is estimated at 270 million euros in total.

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Click here for the original article by Kresimir Zabec for Novac/Jutarnji