Publication: Croatia : Railway Policy Note

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The note first presents a brief overview of the Croatian railway sector, listing the main challenges that it is currently facing, and identifying the main areas of intervention for the development of a financially sustainable sector, which should guide any thorough sector reform program in the long-run. Sector governance challenges are presented, outlining the sector's high dependency on state support, its organizational weaknesses, and its market distortions. This is followed by more detailed historical analysis of Croatian Railways (HZ) holding's performance, corporate governance issues, and investment needs. The operational and financial performance of each major line of business of HZ holding is assessed, highlighting their competitiveness issues. Following the adoption of the restructuring plan, the Bank team used a global financial model to identify measures that might be necessary to make the system sustainable in the long-run. The team considered a range of optimistic and pessimistic scenarios, which may call for additional measures to be taken to complement the measures laid out in the restructuring plan. The note concludes with the presentation of these scenarios, the targets that should be fixed to business lines in cost-cutting, and actions that the Government might take to ensure that the system is sustainable and to secure the successful integration of the Croatian railway sector into the European Union (EU). It highlights the choices that remain open to the Government in terms of sector spending and financial structuring of its support in a constrained fiscal environment.
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World Bank. 2013. Croatia : Railway Policy Note. © Zagreb: World Bank. License: CC BY 3.0 IGO.
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