Minister Hajdas Doncic says PM didn't undermine motorway lease, debt monetisation to continue

Transport Minister Sinisa Hajdas Doncic on Monday dismissed criticisms that Prime Minister Zoran Milanovic had undermined the project of monetising the debt of two state-owned motorway operators by leasing out the motorways, which Hajdas Doncic had advocated strongly, saying that the government was still committed to the monetisation of public debt.

"I have been saying all along that the Croatian government and the ministry are determined to monetise public debt. I am saying it again and I will complete the process of monetisation of public debt together with the Finance Minister," Hajdas Doncic said in an interview with the commercial broadcaster Nova TV.

He underlined that by announcing that the government was abandoning its plan to lease out motorways, which would be offered for management to pension funds and interested citizens, PM Milanovic was not undermining the monetisation project.

"We have been speaking from day one about public debt monetisation, a term the Croatian public has somehow started to equate with the term concession," the minister said.

Asked if he had considered tendering his resignation after Milanovic's statement, Hajdas Doncic repeated that the project of monetisation of public debt would continue.

"I have always spoken about public debt monetisation and about models (for its implementation), whether it be through concession-granting or an Initial Public Offering. I would like to repeat that we are talking about public debt."

Asked about the difference between leasing motorways out and offering them to be bought by pension funds, Hajdas Doncic said that the government's initial plan was to monetise public debt.

"The difference is that under the IPO model, the Croatian Motorways (HAC) will keep 49% ownership of the motorways, and HAC will be obtaining, from a future profit to be made by the company whose 51% stake will be offered for sale on the Croatian financial market, a part of the money needed to finance its liabilities," he said.

The minister said that the IPO model would help earn half the money needed to repay a part of loans taken to build motorways. The other half, to come from annual profits of 1.3 billion kuna, will be split in two, he said.

"It will be divided between HAC, which will continue to repay its loans and which, with these funds and with fuel excise taxes, will have enough money to service its liabilities, and citizens' pension funds and all interested investors on the Croatian market, who will get the rest of the money. That way they would earn more than if they kept their money in banks," he said.

He added that it would take six to eight months to prepare prospectuses for the IPO model. He dismissed criticisms that the government had spent HRK 50 million on advisors to prepare the monetisation project, saying that it had spent four million and that most advisors would continue working on the second debt monetisation model.

"There are no claims and counter-claims. We are realistic, rational and not squandering the money."

Asked why it was taking the government four years to do something, Hajdas Doncic said that the procedure would last as long in Germany or the United States too.

"The process started in 2013, this is not a job for one government... it is a job we are doing for the country and which any other government would continue doing. Believe me, whatever new government is elected, it will continue with the same project because public debt accounts for 82% (of GDP)... we have a problem with financing and this simply must be done."

(Hina) rml

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