Modernization and restructuring of the road sector

closed

The development objective of the Modernization and Restructuring of the Roads Sector Project for Croatia is to strengthen the institutional effectiveness, enhance the operational efficiency, and increase the debt service capacity of Croatia’s road sector. The project comprises of three components. The first component, institutional strengthening and sector reforms objective to establish an institutional framework for the road sector, including through: financial transaction advisor; transport sector planning and road sector governance and monitoring; and implementation support. The second component, operational restructuring of road sector companies’ objective is to implement management tools and carry out the revenue enhancement and cost rationalization actions required to improve operational and financial sustainability of the road sector companies, including through: road classification and standards; road asset management system; rationalization of operations and business functions - motorways; tolling; operational and business rationalization of hrvatske ceste (HC); and road safety. The third component, debt optimization - up to EUR 4 billion of the road sector statement of expenditures (SOEs’) EUR 5.2 billion of debt may be optimized. International Bank for Reconstruction and Development (IBRD’s) direct involvement relates to a first refinancing mobilized by the government with the support of an investment project financing (IPF) guarantee objective is to mobilize commercial financing for the road sector SOEs to refinance their short term and expensive loans (guaranteed refinancing facility).