The government also proposes the founding of an umbrella railway company owned by the state.
Opposition MPs believe that the precondition for the successful restructuring of the Croatian Railways is the modernisation of this state-run company.
They fear that the proposed new four companies will not be competitive on the European railway market owing to their outdated technology.
Slavko Linic of the Social Democratic Party (SDP) warned that HZ engines and carriages were old between 25 and 30 years.
He added that the results of the bill would be lay-offs of 7,000 people in the HZ and supporting industry.
He suggested that the application of the Railway Act which requires the restructuring of the HZ until January 2006 should be postponed for one year.
Tonci Tadic of the Croatian Party of Rights (HSP) expressed fear the motive behind the proposed division of the HZ could be "speedy privatisation of the HZ and the plunder of its real estate".
Responding to criticism, State Secretary of the Transport Minsitry, Drazen Breglec, who had introduced the bill on the division of the HZ, said that the bill stipulated the division of real estate and not the sale and that real estate would remain in state ownership.