The World Bank has approved loan agreements totalling 163.5 million euros to three independent railway companies – HZ Passenger Transport, HZ Infrastructure and HZ Cargo. The agreement was signed by World Bank Country Manager for Croatia Carlos Pinerua, and on behalf of the Republic of Croatia by Minister of Finance Boris Lalovac.
The signing of the agreement was witnessed by the Minister of Maritime Affairs, Transport and Infrastructure Siniša Hajdaš Dončić, Chairman of the Board of HZ Passenger Transport Dražen Ratković, Chairman of the Board of HŽ Infrastructure Renata Suša and Chairman of the Board of HŽ Cargo Danijel Krakić. Minister Hajdaš Dončić stated at this event that the railway companies are being awarded with very favourable loans thanks to this agreement:
The Minister of Maritime Affairs, Transport and Infrastructure, Siniša Hajdaš Dončić, said that the loans were aimed at improving the operational efficiency of the railway companies and the financial sustainability of the public railway sector in Croatia. The loans would be granted at an interest rate of less than one per cent and with a grace period of three years. He said that 40 per cent of the total amount of the loans would be used for the retroactive financing of loans with an average interest rate exceeding 5%.
As a result, in the case of HZ Infrastructure the amount saved will be HRK 68 million, in the case of HZ Cargo that amount will be HRK 74 million and in the case of HZ Passenger Transport HRK 68 million will be saved, the Minister said.
Three Euro-denominated variable spread loans have been approved to HŽ Infrastructure, HŽ Cargo and HZ Passenger Transport. The 43 million euro loan to HZ Passenger Transport has a final maturity of 18 years, including a grace period of three years. The 41.5 million euro loan to HZ Cargo has a final maturity of 20 years, including a grace period of five years. The loan to HZ Infrastructure in the amount of 79 million euros has a final maturity of 10 years, including a grace period of three years.
To help with further reforms of the Croatian railway sector, the project will assist the three railway companies to improve their operational efficiency and financial situation in order to deliver better services in a financially sustainable way. The project complements major investments in infrastructure on international corridors funded by the EU by focusing on the overall sector restructuring and the sustainability of the public companies, which is in line with the Government’s EU agenda. The Project will also assist the Ministry of Maritime Affairs, Transport, and Infrastructure to coordinate and manage the railway sector reform.
We are very pleased to support the Croatian Government in the development of a financially sustainable railway sector that is able to compete in the demanding European Union market, and help Croatia to increase its role as a transport gateway to Central and Southern Europe. The project will also allow for a more efficient use by railway operators of EU-funded infrastructure, preserve public resources for investment, and diminish the need for operations subsidies
,said Mamta Murthi, World Bank Regional Director for Central Europe and the Baltic Countries.
Furthermore, the project will help the companies implement their restructuring plans by providing financing for investments in critical bottlenecks in railway infrastructure and safety measures, the modernization of IT systems, rehabilitation of the rolling stock fleet, and finalisation of assets separation in the railway sector. In addition, it will support affected workers by providing financing for severance packages, training, and requalification opportunities,
concluded Murthi.
(Source: HZ Passenger Transport)
