The Croatian government has canceled the concession of the Croatian motorway network and will go for an initial public offering (IPO).

According to Prime Minister Zoran Milanovic, the government would go for an IPO of 51% of the shares of the motorway operator. It is estimated that eighty per cent of the available shares would be offered to pension funds.

The 1,024 Km network includes the motorways operated by the state-owned Hrvatske Autoceste and Autoceste Rijeka Zagreb companies. The highways are the following:

• Bregana - Zagreb - Lipovac,
• Zagreb - Split - Ravca,
• Zagreb - Rijeka, and
• Zagreb - Gorican.

In December last year we reported that the government received non-binding bids for the concession of the Croatian motorway network. At that time Sinisa Hajdas Doncic, Minister of Maritime Affairs, Transport and Infrastructure, said that the Croatian motorway network would be leased only if the future operator offers a one-off payment of at least €2.5 billion (US$3.11 billion) to €3 billion (US$3.73 billion) for a concession period between 30 years and 50 years.

Local media speculated that bids were submitted from the following teams:

• Australia's Macquarie Group
• Austria's Strabag
• Goldman Sachs Infrastructure-led consortium including Croatian pension funds

The government announced it plans to use the funds to ensure the repayment of loans taken out by state-owned motorway operators Hrvatske Autoceste and Autoceste Rijeka Zagreb. Both have to repay €2.0 billion during the next three years. A total of €4.0 billion must be repaid until 2039.

Croatia, which joined the European Union in 2013, is currently under pressure from Brussels to improve its finances.