Croatia seeks adviser to monetise highways

The south-east Europe country is looking to lease its main highways to the private sector in a deal that could be worth up to €2.5 billion. Interested parties in the advisory tender should submit their expressions of interest by October 17.

Croatia’s transport ministry has launched a tender last week seeking advisers to help it monetise its main highways.

Interested parties should submit their expressions of interest by October 17, with the would-be-adviser to be selected in September 2013. The contract calls on the future consultant to help devise the most appropriate concession model for the country’s main highways – which are managed by two state-owned holding companies – as well as sound out investor interest.

The tender announcement does not mention how long the motorway concessions could last or how much they could be worth, but Reuters says local media sources estimated the road leases to be worth up to €2.5 billion.

Croatia, located in south-east Europe, is no stranger to private sector road concessions.

In 1995, the country’s first public-private partnership saw a joint venture between French developer Bouygues and the Croatia Motorways Agency design, build, finance and operate a network of motorways known as the Istrian motorways.  In 2008, French fund manager Antin Infrastructure Partners acquired a minority participation in the concessionaire, called Bina Istra.

Croatia is under pressure to cut public spending and reduce debt. According to ratings agency Fitch, public debt rose from 38 percent of gross domestic product (GDP) in 2005 to 45.7 percent in 2011. If public guarantees are included, Croatia’s debt-to-GDP ratio increases to 63.5 percent.

Fitch expects Croatian public debt to peak at 58 percent of GDP in 2015 and decline from the following year onwards.