PM: WE WILL COMPLY WITH ENRON CONTRACT UNLESS NEW ONE IS REACHED

ZAGREB, July 19 (Hina) - Croatia's Prime Minister Ivica Racan said on Wednesday Croatia would comply with the initial contract with United States company Enron, signed by the former government, unless an agreement was reached on a protocol decided upon in Houston recently. "If the problem cannot be solved with the Houston Protocol, we will comply with the contract signed by (former Croatian President, Franjo) Tudjman's authorities," Racan told reporters in Zagreb at a joint press conference held with Croatian Social Liberal Party president Drazen Budisa. The Prime Minister said his government "rejected the pressure to arbitrate what is what concerning that Protocol," adding it was an issue between HEP, Croatia's power utility company, and Enron. "If the gentlemen from HEP and Enron fail to agree, we shall comply with the contract, even though it was signed under suspicious circumstances," he said. Racan added his government had decided to comply with international commitments despite the Enron contract's not being in Croatia's national interest. He believes the original contract is not in Enron's interest either. Responding to a question from the press, the Prime Minister assessed as pressure on Croatia statements by unnamed diplomats speaking in the media about dissatisfaction with Croatia's conduct in the matter. The HEP-Enron negotiations on the construction of a gas power plant in Jertovec near Zagreb went downhill after the two sides differed in interpreting the Protocol signed in Houston on Croatia's behalf by government members Goran Granic and Goranko Fizulic. (hina) ha