PFI MODEL FOR FINANCING PUBLIC INSTITUTIONS PRESENTED IN ZAGREB

ZAGREB, May 23 (Hina) - Representatives of the British University of Dundee on Friday presented a model of financing public institutions, called the Private Finance Initiative (PFI), in the Croatian capital. #L# The model stipulates the inclusion of the private sector in preparations and conduct of capital investments. Croatia's public works and construction minister, Radimir Cacic, said the country was undergoing the process of intensive growth in capital investments. In the past three years, this kind of investment increased threefold, from three to 19 billion kuna. According to the minister, this is not sufficient, given that Croatia should carry out capital investments in an entire spectrum of activities. The current value of investments should be doubled by 2008, he added. The government has presented a plan for investments in hospitals, the ministry is launching a project of renovation or construction of 140 schools, and everything has been known about ongoing businesses in the construction of roads and flats. So far, all of this has been financed by the state and those are areas where the PFI model can be applied, the minister said. The engagement of the private sector in capital investments in the public sector according to the PFI model has been applied in Great Britain for more than 10 years, and represents an alternative source for the financing of projects in the public sector. Thus, the said projects can be financed without the need for the state to incur new debts for this purpose, said Professor Malcom Horner from the University of Dundee. According to this model, constructors, consulting firms and financiers set up their joint company for a specific purpose whose task is to project, finance, build and manage an institution during a kind of concession, which usually lasts 25-30 years. (hina) ms sb