CROATIAN MOTORWAYS SIGN LOAN CONTRACT FOR EUR110 MILLION

ZAGREB, May 16 (Hina) - Croatian Motorways (HAC) on Thursday signed a loan contract with the German Kreditanstalt fur Wiederaufbau (KfW) development bank for a loan of EUR110 million to be used to construct the Maslenica-Zadar 1 (12.45 km) and Prgomet-Dugopolje (29.2 km) sections of the Zagreb-Split motorway. #L# HAC chairman of the board Stanko Kovac said this was the best loan approved so far. The loan period is 14 years with a two-year withdrawal period, a two-year grace and a ten-year repayment period, with a variable interest rate based on the EURIBOR rate plus 1.85 percent rate and government guarantees. The Maslenica-Zadar 1 section should be open for traffic in June 2003, while the Prgomet-Dugopolje section should be opened in June 2004. Kovac said a tender still needed to be advertised and contracts foreclosed for 87 kilometres of roadway from Zadar 2 and Prgomet. The KfW is also involved in financing the construction of two sections of the Rijeka-Zagreb motorway with a total value of EUR123 million and, as such, is a significant investor in developing Croatia's road infrastructure, HAC noted. It is well known that development banks have stricter criteria in selecting works to finance but offer much more favourable conditions, Kovac said, adding that this put even more weight on the latest loan. Christian Murach, a senior KfW deputy president, said he was aware the Zagreb-Split motorway was currently the most significant infrastructure project in Croatia. He believes that one of the most significant duties facing Croatia is to develop its tourism. Shortening travel time towards the coast via the highway will have a significant effect on this objective and enhance the development of tourism, he said. (hina) sp sb