Due to the (economic) crisis and the rebalancing of the state budget, Croatian Railways (HŽ) will not receive 90 million kunas for restructuring and modernization. Instead of the planned 444 million kunas, they will receive 350 million for business operations.

The State budget reallocations also reduced the amount of funding available for redundancy severance packages to laid-off employees. The purchase of new trains has also been postponed due to lack of allocated funding. Instead of purchasing new trains, HŽ will modernize the old ones, receiving 265 million kunas for this purpose. Most of the funds will go to TŽV Gredelj, a company that in 2008, according to HŽ, earned 190 million kunas for various work done in modernizing the HŽ fleet and an additional 27 million kunas for the maintenance of passenger trains. We have received unofficial information from TŽV Gredelj that HŽ does not regularly fulfill their financial obligations and that their market survival is in question, as the amount of work for HŽ has been reduced. However, HŽ sources claim that this year’s projects with Gredelj are valued at 20% more than the realized works in 2008. In 2009, HŽ will not only give up on the purchase of the new trains, but also ‘’freeze’’ the railway plans of the National Program for Construction and Maintenance of the Railway Infrastructure, which planned to invest 10 billion kunas into the construction of new railroads and 5 billion more for maintenance between 2007 -2011. Instead of 2,8 billion kunas to be invested in 2009 according to the National Program only a third of that amount will be allocated from the state budget. “Investment towards maintenance will be at 2008 levels, which means we will invest approximately 1 billion kunas. However, the planned investments will be somewhat less than in 2008. It is planned that 536 million kunas will be allocated from the state budget, with an additional 230 million kunas coming from pre-accession EU funding. If we also take into account the surplus that we plan to spend, we will spend approximately 850 million kunas in investments,” explains Zoran Popovac, HŽ Holding General Manager.
(AmCham)