Croatia gets bids for last shipyard - EU demands reform of subsidised docks

Croatia has received three bids to buy a nearly 300-year-old shipyard, the last of five state-owned docks it is trying to sell to meet a major condition for completing its European Union entry talks next year. Restructuring the heavily subsidised docks so that they no longer require state aid is an important requirement for Zagreb to complete its talks to enter the EU.

The small Kraljevica dock located in the northern Adriatic was put on sale for a token price of 1 kuna ($0.184). Croatia's oldest dock, founded in 1729, it was the only one that had failed to attract bids in two previous tender rounds. Two bids came from Croatia and one from neighbouring Serbia, Vedran Duvnjak, head of the state privatisation fund, told reporters on Thursday. He did not say how long the government might take to review the bids. The dock is one of five of Croatia's six state-owned shipyards that have been piling up losses for years. The sixth is profitable and is not on the block.

Next year the government, which is struggling to control public expenditure, may have to take over up to 12 billion kuna of loans to the docks, which it guaranteed in the past. EU entry talks are divided in 35 chapters, or policy areas. Croatia has concluded talks in 25 of them and hopes to wrap up another three by the end of the year. The European Commission is reviewing the bids for the docks to assess the viability of the restructuring plans. If it approves them, Croatia would make a major step forward towards concluding the demanding negotiation chapter on competition.

"The Commission has no firm deadline for expressing its opinion, but I suppose we will be able to make progress in the competition chapter by spring," a senior Croatian official, who asked not to be named, told Reuters. He said Croatia hopes to be given a date in March for the end of the talks, which could wrap up in mid-2011 allowing it to sign an accession treaty late next year. Croatia could join the EU when all 27 EU members ratify the treaty, by 2012 or 2013.

The shipbuilding restructuring is a sensitive social issue as the docks employ some 11,000 people and many small businesses are also involved as contractors. Besides the competition policy, the most demanding chapter is the judiciary where Zagreb has to prove it is serious in making its courts independent of politics and in fighting graft.

News source: Balkans.com link: article