ZAGREB, July 23 (Hina) - The head of the World Bank office for Croatia, Sandor Sipos, on Friday spoke to reporters in Zagreb about the bank's recent decision to refuse a collateral for the building of the Zagreb-Gorican highway.
Sandor told reporters in Zagreb the decision was based on the bank's evaluation that the project was economically unjustified, and on the general assessment that Croatia's investments into road-building were unsustainable, while funds for road maintenance were low. There was no political reason behind the decision, Sandor said, reminding that Croatia had been denied a similar collateral in April. Quoting unnamed sources, Croatian media today said the reason behind the World Bank decision was the poor economic situation in Croatia, excessive public consumption, and the lack of an agreement with the International Monetary Fund. Sipos sa
ZAGREB, July 23 (Hina) - The head of the World Bank office for
Croatia, Sandor Sipos, on Friday spoke to reporters in Zagreb about
the bank's recent decision to refuse a collateral for the building
of the Zagreb-Gorican highway.
Sandor told reporters in Zagreb the decision was based on the bank's
evaluation that the project was economically unjustified, and on
the general assessment that Croatia's investments into road-
building were unsustainable, while funds for road maintenance were
low.
There was no political reason behind the decision, Sandor said,
reminding that Croatia had been denied a similar collateral in
April.
Quoting unnamed sources, Croatian media today said the reason
behind the World Bank decision was the poor economic situation in
Croatia, excessive public consumption, and the lack of an agreement
with the International Monetary Fund.
Sipos said the World Bank-Croatian government dialogue on road
issues was productive, but added there were two points on which
views differed.
We believe Croatia is investing too much in roads which are not
cost-effective and that its plans are too ambitious, Sipos said,
adding excessive investing was the reason for insufficient funds
for road maintenance.
Explaining his statement, Sipos said only 20 of 326 kilometres of
highway in Croatia registered a 15,000-vehicle per day traffic
threshold. Under more lenient criteria, between 10,000 and 15,000
vehicles a day are registered on some 200km of highway, he added.
The World Bank further assessed Croatia is building roads six times
faster than Western Europe, which Sipos said further burdened
Croatian economy, which entered a recession period at the end of
last year.
Regarding road maintenance, Sipos said Croatia in 1995 signed an
agreement with the World Bank, according to which it was to earmark
US$98 million a year to that end. Only US$32 million was spent in
1998, leading the World Bank to conclude the consequence would call
for US$170 million a year for road maintenance.
In 1994 the World Bank okayed several transport projects for
Croatia, worth US$300 million. Another two projects are planned,
for road maintenance and the Rijeka harbour.
Sipos said the denied collateral did not mean the World Bank did not
want to cooperate with Croatia, as evidenced by the fact that the
bank's board in May okayed a strategy for assisting Croatia's
development at the time the bank was in the process of denying the
collateral.
(hina) ha