"The new plan will not be based merely on wishes, it will reflect the actual possibilities and be based on European Union guidelines and Croatia's strategy of transport development," Sanader said.
This year, 1.5 million kuna of budgetary funds will be set aside to repay the HZ's short-term loans from last year, the PM said.
The purpose of modernisation is to make an economically viable railway company which will be able to withstand competition and compete for contracts on the south-east European market, Sanader said.
The government will support the reconstruction of infrastructure along pan-European corridors running through Croatia, he added.
Croatia's being awarded the status of an EU candidate enables the HZ to compete for assistance from the EU pre-accession funds, Sanader said, expressing hope that the European Commission would adopt a pre-accession strategy for Croatia in the next two weeks.
Sea, Tourism, Transport and Development Minister Bozidar Kalmeta added that the government and his ministry supported the HZ's modernisation and that the company management and his ministry would submit to the government a new restructuring plan based on realistic investment possibilities.
HZ management board president Tomislav Josip Mlinaric said the company's priorities were the introduction of corporate management in line with EC recommendations, the separation of the company's infrastructure and transport sectors, and the solution of the problem of surplus labour and unprofitable railway lines.