CROATIAN RAILWAYS, EBRD SIGN US35-MILLION LOAN CONTRACT

ZAGREB, Dec 8 (Hina) - The Croatian Railways (HZ) and European Bank for Reconstruction and Development (EBRD) signed a loan contract worth US$35 million in Zagreb on Tuesday. The loan will be used for the repair of 19 electric engines and 24 electric diesel-engines, for the purchase of reserve parts and for the modernisation of regional repair workshops and consulting services in the selection of contractors and implementation of the contract. Loan guarantees were given by the Croatian Government and the contract was signed by HZ General Manager Marijan Klaric and EBRD Transport Department head Roy Knighton. The payment period is 15 years with a three-year grace and changeable interest rate based on a six-month LIBOR. The HZ will use the loan to resume its Programme of Restructuring, which has several phases. According to the programme, the HZ should by the year 2002 become a profitable company with the productivity level of the Slovene Railways and transport activities of 50 per cent of its pre-war business operations. EBRD official Knighton said the HZ would use the loan to improve its services on the domestic and foreign markets and to decrease costs. The HZ is in a special position because of the recent war, Knighton said adding the loan would help HZ increase the quality of its rolling stock. The EBRD has so far allocated loans worth ECU470 million for the reconstruction of the railway sector in Central and East European countries. Croatia has signed several contracts with the EBRD, totalling DM117 million. (hina) rml