CROATIAN GOVERNMENT DISCUSSES DEVELOPMENT OF ECONOMY

ZAGREB, Feb 22 (Hina) - Pursuant to a decision by the Croatian government, public companies will this year invest 11.5 billion kuna, of which 5.7 billion kuna (about US$672 million) will be secured through their own resources, 3.8 billion (about US$448 million) through loans, and the government budget will assign two billion kuna (about US$236 million) . Croatian Telecom will thus this year invest three billion kuna (US$354 million) from its own fund, the state's oil company INA two billion (about US$236 million), Croatian Railways 760 million (US$89.6 million) and the electric power supply company HEP about 100 million kuna (US$11.8 million), the companies' leaders informed government members Thursday. Finance Minister Mato Crkvenac warned that investments have been decreasing for ten years now, and last year made up two per cent. Economic growth of four per cent has been envisaged for this year, while investments should increase by 10.1 per cent. At today's session the government committed public companies' management boards to execute moved programmes, and concluded it would reach a decision to establish in which of these companies the government would make up their assembly, considering significant decisions in their restructuring which need to be made. Management boards have been committed to, should the government sign an agreement with unions on a three-year salary policy, discuss the agreement with their unions on a partnership relation basis. The salary policy would be restricted by the income mass, and increase would be tied to an increase of the Gross Domestic Product, by a real increase of 75 per cent in public services and 50 per cent in public companies. The government on Thursday also founded a new model of organisation and financing of the Plitvice road to Split, which could be functional by the tourist season in 2003. According to the new organisation model, the Croatian Road Administration would be formed into two separate companies - Croatian Highways and Croatian Roads. Planned investments for the construction and maintenance of roads for this year amount to 3.2 billion kuna (about US$377 million), with about 16 billion kuna (about US$1.89 billion) by the year 2004. A quick, effective and transparent privatisation is the aim of the new privatisation policy and of the government portfolio privatisation model, made cohesive at the Croatian Privatisation Fund. The government endorsed a motion of ten privatisation models, and is expected to discuss a new bill on privatisation within a fortnight. The Croatian Privatisation Fund portfolio currently registers 1,404 joint stock companies available for privatisation (the state has more than 50 per cent ownership in 489 of them), of 26.6 billion kuna (about US$ 3.14 billion) nominal value. This portfolio, with special attention paid to tourist companies, would be privatised via ten models. The model of selling shares at a discount for employees, that is, the small share holders model, has drawn particular interest. Within 45 days the state and other creditors should systematically effect measures for the financial consolidation of six agricultural companies suggested today. The measures include PIK Vrbovec, Orahovica, Jasinje fro Slavonski Brod, Vukovar's VUPIK, Belje from Darda and Djakovstina, whose debts have reached 2.2 billion kuna (about US$259 million). (hina) lml sb