ECONOMY

Croat shipyard to go on sale

ZAGREB (Reuters) – Croatia will call a tender for the sale of one of its five shipyards by the end of the year, a top privatization official said yesterday, presenting the first concrete step in the industry’s long-delayed overhaul. «We plan to call a tender by the end of this year for a majority stake in the Uljanik shipyard in the northern Adriatic town of Pula. We’re working on preparations for the tender,» said Grga Ivezic, the head of the Croatian Privatization Fund (HFP). He did not specify what stake would be offered but said it would certainly be more than 50 percent. Croatia has five shipyards, but Uljanik is the only one that runs a profitable business. Croatia’s shipbuilding is heavily subsidized. The government has drafted a restructuring plan for the four loss-making shipyards and presented it for comments to the European Commission, but details of the plan have not yet been publicly revealed. The main idea is to gradually cut subsidies and make the shipyards competitive on the European Union market with minimum aid from the state, in line with standards in the wealthy bloc which Croatia hopes to join around 2010. The overhaul is estimated to cost some 5 billion kuna (-678.1 million) and take up to 15 years before the shipyards are ready to compete on the EU market. Croatia’s shipyards have order books full for the next few years, but the contracts were agreed without any hedging. As a result, higher prices of steel and a weaker US dollar have dented business results.

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