A proposal to sell the HZ Cargo, a Croatian national rail transport company, to the Romanian investor Feroivar, a member of Grampet Group, will be on the agenda of the Croatian government's meeting this week, and Transport Minister Sinisa Hajdas Doncic believes that the process could be completed in one's month time.
Grampet Group is the largest private rail group in Romania and in South-Eastern Europe. Set up in 1999, Grampet Group includes several companies with activities in all railway sectors, from the transport of goods, rolling stock manufacturing and repairs to logistics management.
The privatisation of the HZ Cargo was discussed on Monday by the government's railway sector task force under the chairmanship of Prime Minister Zoran Milanovic.
The Romanian investor's bid arrived in Zagreb after the government announced a tender for the privatisation, and the cabinet of PM Zoran Milanovic seems inclined to accept the Romanian proposal.
Asked by the press after the task force's meeting whether the money from the sale of the HZ Cargo might be directed into some other rail companies, Minister Hajdas Doncic said that this could not happen as there had been no longer the HZ (Croatian Railways) system but three companies stemming from that system.
The new owner of the HZ Cargo will be bound to take over all liabilities, including guarantees, which stand at HRK 800 million, and is expected to immediately invest EUR 30 million into the renewal of the company's rolling stock and into programmes of care for surplus employees.
The investor is expected to take over the collateral provided so far by the government to the HZ Cargo.
Hajdas Doncic hopes that all this will be completed, or Croatia will be able to penalise the other party at the pertinent contract.
As for the HZ company for passenger transport, a ten-year contract is in the pipeline regulating the public transportation and upgrading and supply of trains. The first stage of this job has been done, and a domestic consortium led by the Gredelj company has been chosen.
The talks with banks should be finalised on financing the construction of trains and this job of making 44 new trains is estimated at 1.6 billion kuna.
Hajdas Doncic believes that the talks with the banks would be wrapped up by the end of September.
Asked by the press about the World Bank's report on the Croatian railway sector restructuring, the minister said today that the World Bank's "Croatia: Railways Policy Note," included the data until 2011, while a large portion of restructuring was made between 2011 and 2013.
The entire process can be conducted at a faster pace, and this means to outsource non-core businesses in the HZ Infrastructure and to downsize the number of employees to the European average, the minister said.
As for the labour force reduction, the HZ Infrastructure has done it already, and the HZ Passenger Transport and the HZ Cargo are expected to follow its example soon, according to the minister.
