The European Commission on Wednesday authorised a new plan for the restructuring of the Croatian shipyard Brodosplit, and a contract for the privatisation of this ailing shipyard is to be signed by the end of this month.
"The European Commission has authorised an amendment to the restructuring plan and the privatisation contract for Brodosplit, one of the Croat shipyards in difficulty. The amendment concerns a modest increase in the total amount of restructuring aid to Brodosplit, as well as additional compensatory measures. Croatia committed to sign the privatisation contract by 28 February 2013," the Commission said in a statement after its meeting.
The privatisation of Brodosplit is one of the ten tasks, identified by the Commission in its monitoring report released last October, which Croatia needs to carry out before joining the European Union, which is scheduled for July 1.
"I am happy that we could find a satisfactory solution for the restructuring of the Brodosplit yard. This means that privatisation can now go ahead in line with the commitments made by Croatia under the Act of Accession. The implementation of the restructuring plan should enable the new owners of Brodosplit and its workforce to move ahead and build a new future for this shipyard," Commission Vice-President and Competition Commissioner Joaquin Almunia said.
"In line with EU guidelines on state aid for the rescue and restructuring of companies, any restructuring aid must be accompanied by compensatory measures in order to offset the impact of the aid on competition. The Commission has accepted the proposal by Croatia to further reduce the annual production ceilings for the yard. The Commission considers that these additional compensatory measures are sufficient in view of the relatively modest increase in the amount of restructuring aid requested for the yard," the statement said.
Economy Minister Ivan Vrdoljak said during his visit to Brussels on January 21 that the latest version of the contract provided for an extension of government commitments from three to five years, adding that the government's cost was being increased from 1.263 billion to 1.5 billion kuna. The cost initially projected for this year had been 600 million kuna, and according to the latest text of the contract it was 480 million kuna given the extension from three to five years.
The compensatory measures have had to be increased to cover the losses incurred during the privatisation process, for which the buyer cannot be held responsible but the government because it failed to ensure timely privatisation of the shipyard, the minister explained.
The buyer of Brodosplit is to cover 40 per cent of restructuring costs.
