HZ GRANTED FAVOURABLE LOAN BY WORLD BANK- TRANSPORT MINISTER

ZAGREB, Jan 13 (Hina) - On Tuesday, the World Bank granted a US$101 million loan to the Croatian Railways (HZ) for a project of modernisation of the HZ, Croatian Transport Minister Zeljko Luzavec told Wednesday's news conference. Luzavec said this loan would help finish the process of the HZ restructuring. He described the credit as favourable adding that the it would be repaid for 15 years with three-to-five-year long grace period and the 5.15 per cent of variable interest rate annually. Luzavec voiced hope that the domestic industry would participate in the realisation of this credit. The HZ Director Marijan Klaric said one third (33.4 million) of the loan would be allocated for the social programme for workers who would be laid off. According to the programme of restructuring, the HZ will lay off 1,390 employees in 1999. Klaric said they would receive such aid as the 2,285 former HZ workers got after being dismissed last year. According to this programme, up to 2002 the HZ would employ 16,000 people instead of the current 20,700 workers. Luzavec and Klaric told the conference that 21 million dollars would be earmarked for the track renewal and maintenance, 20 million for the rehabilitation of traction units whereas 12 million would be used for the rehabilitation of passenger coaches and freight units. The HZ will also spend 1.6 million for the environmental protection, 3 million for the consultant services, while one million dollars will cover credit costs. Eight million will not be earmarked. Klaric recalled that the HZ had been granted a US$35-million loan by the European Bank for Reconstruction and Development (EBRD) last year under the same conditions under which the World Bank's credit was given. He added that the HZ would continue this year to use a credit, worth 35 million Swiss francs, approved by EUROFIM (European Railways Organisation). (hina) ms