Thursday, 28 February 2019

Greek Company J&P Avax Selected to Build Pelješac Bridge Access Roads

ZAGREB, February 28, 2019 - The state-run Croatian Road operator (HC) has decided to select the Greek company J&P Avax to build the Duboka - Šparagovići/Zaradeze section of access roads to Pelješac Bridge at the price of 464.9 million kuna before Value Added Tax.

According to a press release issued by the HC on Thursday, a total of seven bids were submitted for the construction of the 12-kilometre long access road.

Of those seven bids, four were shortlisted, and the commission found the offer made by J&P Avax, to be the most favourable in financial terms.

The selected bidder is expected to wrap up the construction by 31 January 2022.

One of those seven bids was disqualified after the commission found that the listed price of 321.1 million kuna as offered by the Integral Inžinjerig company from Bosnia and Herzegovina was unusually low.

More news on the Pelješac Bridge construction can be found in the Business section.

Friday, 15 February 2019

Pelješac Bridge Access Roads Will Be Finished on Time

ZAGREB, February 15, 2019 - Minister of the Maritime Affairs, Transport and Infrastructure Oleg Butković said on Friday that the state-owned Hrvatske Ceste (HC) road construction and management company was not surprised by the appeal against the tender for the construction of access roads to the future Pelješac Bridge.

Responding to questions from the press at the presentation of a project to modernise port infrastructure in the northern coastal town of Crikvenica, Butković said that the appeal was lawful and added that HC would respond to it within 30 days. He said that the State Commission should deal with the appeal as soon as possible because EU funding was involved.

Asked if the construction of the Pelješac Bridge was the start of "a great Croatian-Chinese friendship", the minister said that companies from all over the world could apply for the international tender and that the tender process had been overseen by the EU.

"Anyone could apply and the offer that meets the criteria was selected, in this case a Chinese consortium. Our experience is good, initial reactions are good and I believe it will stay that way until the end," Butković said.

"As far as I could see, the appeal should not halt the process and extend the time for the submission of bids," Butković said and added: "It can't happen that the bridge is finished and the access roads are not. We need to finish the project within the given time frame so that the EU funding is not wasted. We are not running late, and whether or not we will finish the bridge and the access roads on the same date, that's pushing it a little bit too far."

The State Commission for the Supervision of Public Procurement Procedures on Wednesday received an appeal from the Varaždin-based Colas company against the construction of two sections of the Ston Bypass (DC414).

More news on the Pelješac Bridge construction can be found in the Business section.

Saturday, 9 February 2019

Pelješac Bridge Site Visited by Major International Media

Pelješac Bridge construction is the largest infrastructural project currently taking place in Croatia, but it's also among the biggest in the European Union at the moment. Add to that the fact that the Chinese consortium, led by the China Road and Bridge Corporation (CRBC), mostly state-owned company has been awarded the contract to build the bridge - for the first time in the European Union, and you shouldn't be surprised that the story is interesting even outside Croatia.

Večernji list writes about the construction site being visited these days by journalists from Italian Corriere della Sera, and their colleagues from the BBC are expected in a few days. Financial Times and the Washington Post have already written about the project, as have, of course, most Chinese media.

Western media focus on the fact that this is one of the first major projects financed by the EU awarded to the Chinese company, and how not everyone in the EU is thrilled by that fact. Financial Times gives more emphasis on the strong objections to the construction of the Pelješac bridge by the Bosniaks from Bosnia and Herzegovina, but also explain why it's important for Croatia to have the bridge built as soon as possible.

Swiss public radio broadcaster also did a story about the bridge construction, as an example of the Chinese companies that simply don't have any further large infrastructure projects back home, so they need to focus on the foreign markets - and Europe is the next one to be conquered for them. The journalists are curious about the technical specifications and details about the construction itself, and the work done so far is impressive.

Construction officially kicked off in late July and is to be completed in 36 months. There are some doubts whether the access roads on the Pelješac side will be finished in time, which has nothing to do with the Chinese contractors. All the piles that have arrived at the site have been installed into the ground, including the two permanent ones in late January (following the positive results of the tests performed on the temporary, test piles). Total of 148 piles are expected to be delivered to Komarna construction site by Chinese piling ships and set up. The construction of the foundations of the bridge, piles, and concrete in the foundation is expected to be finished by the end of October this year.

Sunday, 3 February 2019

Dubrovnik Highway: Talk of 800 Million Euro Project Reignited

After a decade of silence and complete inactivity, the Croatian Government is moving once again towards the temptation of a highway construction project towards Dubrovnik, a move initially started by former PM Ivo Sanader.

As Kresimir Zabec/Novac writes on the 2nd of February, 2019, after a rather unnecessarily lengthy and of course unclear title, the conclusion of the ''study documentation for the road connection of southern Dalmatia to the motorway network system of the Republic of Croatia from the Metković junction to the future Pelješac bridge and from the Doli junction to the City of Dubrovnik'' (yes you can take a breath now), which was adopted during Friday's Government session held in Dubrovnik, has actually led back to the beginning of re-activating the old plan to build a highway to Dubrovnik.

The last time constructing a highway to Dubrovnik was mentioned was way back in 2009, ten whole years ago, when a construction contract worth 3.675 billion kuna was signed in Osojnik in the presence of the controversial former Prime Minister Ivo Sanader, an amount which didn't include the VAT for the planned Doli - Dubrovnik section. Although the contracts were indeed signed, the money for this project was never secured, therefore the works never started and all in all, time went by and people simply forgot about it for the most part.

Although there are permits, projects and designs from that time that still exist and could be acceptable today, Croatian roads (Hrvatske ceste) will spend 4.06 million kuna this year to take a better look at the southern Dalmatian transport system in the area of ​​Dubrovnik-Neretva County and its link with the existing highway network, and determine the feasibility of any highway construction from the existing Metković junction to the future Pelješac bridge, and then from Doli to the City of Dubrovnik. They'll also rule whether or not it is simply better to use the highway through neighbouring Bosnia and Herzegovina.

EU co-financing

Croatia's Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butković, has already jumped the gun when it comes to the talks held on Friday, stating that the Ploče - Dubrovnik motorway will be built, but the question is when. He is counting on the EU being prepared to co-finance the project in the next operational period. However, some insist that a study is needed because the road image itself has changed over the past ten years, not only in southern Croatia, but also in Bosnia and Herzegovina. The motorway was built behind Ploče and the where the future Pelješac bridge will be, in neighbouring Bosnia and Herzegovina, the construction of part of the Vc corridor from Počitelj to the border with Montenegro through Popovo polje has also begun.

Compared to ten years ago, the highway would now be changed somewhat. Back then, the route went from Ploče to the border with Bosnia and Herzegovina at Neum and then continued on the other side down south to Dubrovnik.

It was estimated that eighty kilometres of highway from Ploče to Dubrovnik could cost around 732 million euros.

Today, it is assumed that the direction would go from the current Karamatići junction to the Pelješac junction, from where traffic will go down to Pelješac bridge. That equals approximately twenty kilometres of brand new highway sections. The traffic would continue along the new Pelješac road to the Doli junction, and from there 29.6 kilometers of highway would be built leading down to Dubrovnik.

According to the old 2009 project, a total of thirty objects needed to be built, of which there were ten viaducts, nine tunnels, and eight underpasses. Back then, the price of one kilometre of construction was 16.5 million euros without VAT, equalling a total of almost half a billion euros without VAT. The price of the construction of the highway from Karamatići to Pelješac is as yet unknown, but this section is also a very demanding part of the project as the route passes through the Neretva valley, so a high level of environmental protection will be required. Owing to all of the above, estimates are that the entire highway from Ploče down to Dubrovnik could stand at a massive 800 million euros.

Make sure to stay up to date by following our dedicated lifestyle and politics pages. If it's just Dubrovnik and the extreme south of Dalmatia you're interest in, give Total Dubrovnik a follow.


Click here for the original article by Kresimir Zabec for

Friday, 1 February 2019

Construction of Pelješac Bridge Proceeding Faster Than Planned

ZAGREB, February 1, 2019 – Prime Minister Andrej Plenković on Thursday visited the construction site of the Pelješac bridge in southern Croatia, saying works were proceeding very well, faster than envisaged, and that the bridge should be completed in three years' time.

"The final deadline for the completion of all access roads and the Pelješac bridge is 31 January 2022," he told reporters, adding that pylons were currently being installed which would later hold the bridge columns.

Plenković said everything indicated the works would be completed in time. "In that way, we will finally achieve the strategic goal of connecting Croatia's south with all of Croatia."

The fact that the European Union is co-financing the bridge with 357 million euro "shows all of Croatia how important the cohesion policy is and how important the aid from the European budget is for this key infrastructure project," he said.

"This project was prepared seriously and will be a permanent symbol of the first seven years of our European Union membership," he said, adding that the bridge would show "how much we have all profited from it."

Plenković said the bridge was "of enormous significance for Croatia because we are making a new, special dimension of our cooperation with China." He thanked the China Road and Bridge company, which is building the bridge, Croatian Roads and the Ministry of the Sea, Transport and Infrastructure for their engagement in the construction.

Maritime Affairs, Transport and Infrastructure Minister Oleg Butković said that what they saw today was "indeed impressive and satisfactory." He added the 15th pylon was installed today. "It was envisaged that 1.35 pylons per day would be installed, yet we have two pylons per day being installed on average."

Butković said procedures for the second, third and fourth stages of construction were under way and that Croatian Roads would soon select the contractor for the second stage, which includes building 12 km of access roads. "Bids for the third and fourth stages will be submitted on February 14," he said, adding that the construction of Pelješac bridge was "a positive and successful story."

More news on the Pelješac bridge construction can be found in the Business section.

Tuesday, 29 January 2019

Pelješac Bridge Brings New Tourism Boom: Komarna Comes to Life with Chinese Workers

The little seaside town of Komarna was thus far known as the popular weekend getaway of longtime politician Luka Bebić, and at the time of Yugoslavia, it was known as a resort town of Bosnian Herzegovinian strongmen and intellectuals. Today, however, the town has become the liveliest construction site in Croatia, as the biggest bridge in the country is constructed over the next three years, reports Slobodna Dalmacija on January 28, 2019. 

The town of Komarna was built in the seventies as a weekend resort. It has a little more than 170 registered residents today, about 50 in the winter, and in the summer up to two thousand with tourists. 

The town, however, is no stranger to the megaproject that is underway, which is worth 420 million euro, 85% of which is financed by the EU - the Pelješac Bridge. The renowned Chinese construction giant China Road and Bridge Corporation was commissioned for the project. 

Not only will this bridge pass through the Bay of Mali Ston, with one stop in Komarna and the other in Brijesta on Pelješac, but it will also connect Croatia after 303 years, the time that has passed since the Dubrovnik Republic handed over the territory of Neum to the Turkish Empire in 1718. 

The bridge will be 2.4 kilometers long and 55 meters tall, and it will carry four traffic lanes. The EU is also financing the supporting infrastructure needed, including access roads, tunnels, additional bridges and viaducts, and an 8-kilometer bypass at Ston.

Works have begun, construction sites on both sides of the bay are up, and foundations are being laid about one hundred meters below the sea surface. On the Komarna side, Chinese and Croatian engineers will be located in apartments, while on the Pelješac side, a container settlement will be erected for seven hundred Chinese workers. The area will transform into an actual city by the sea.

“We see them, they come through here, they were initially quiet, but now they send greetings. The main director knows how to say 'good day and goodbye’, and we, I’m afraid, are not even close to learning Chinese. And you know that there will be 700 Chinese cheering for Hajduk and singing 'Marjane, Marjane’,” said Mile Brljević (64) from Komarna, predicting that by the summer of 2021, when the works on the bridge will be completed, Komarna will be known as Zagreb, always on television and in newspapers.

“The engineers and workers who are directly involved in the project are located in Komarna, and from Opuzen to Ploče, we are renting rooms to Croatian and European controllers, observers, all those who have a job in supervision, so our restaurants and apartments will be full all winter and summer. It’s all great. There are engineers from Sarajevo, Belgrade, Zagreb, Split, and we are all together in the same place. The Chinese see the job and are interested in nothing else, and our Neretva firms have done the preparatory work, like setting up fences, asphalt, panels, so there was a job for everyone,” says Mile.

Ivo Jerković Bili is a 24-year-old who canceled all the announced tourists until 2021 and leased about 70 beds to engineers, translators, and logistics. The Chinese chefs even cook by him, as part of the office is located there. 

“The first came in July, two bosses and engineers, and then there were more and more… At present, there are about fifty Chinese and about the same amount of Croatian engineers. You can’t miss the seriousness the Chinese have for this job; they are looking for references, all paperwork and experience, they are not interested in anything done 'by a connection'. The chief director was here, very young, born in 1986 I think. Every boss has his boss, and statements and photographs or entry into the construction area are strictly forbidden without permission from the top. There is no chatting or breaks, and there is no chance that even a penny is missed on the account.

Most of the workers will come in April and sleep in the container village. I think that the people we rented to for the summer and had to cancel will not be upset, but God, there is really a lot of work,” explains Ivo, who will open a restaurant this summer - a Chinese restaurant.

“The main Chinese chef is a professional, the food he prepares is excellent, and I noticed that they use ginger in everything. If possible, I will ask him for help in opening the Chinese restaurant. And you know what was the strangest to me; this summer, apart from the thousands of guests we have from all over Europe, was the first time we had Chinese tourists. If this is a random coincidence, who knows. But, we will have a lively and cheerful atmosphere over these three years,” says Ivo Jerković.

To read more about the Pelješac Bridge, follow TCN’s dedicated page

Monday, 21 January 2019

Croatian Transport Minister in China for Cooperation Talks

ZAGREB, January 21, 2019 - The Croatian Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butković, met with Chinese Transport Minister Li Xiaopeng in Beijing on Sunday for talks on cooperation in transport infrastructure, the possibility of Chinese companies using the northern Croatian Adriatic port of Rijeka and of opening direct flights between Zagreb and Beijing, the Croatian ministry said in a press release on Monday.

Butković cited the Pelješac Bridge as the most significant project that provided a boost to cooperation between Croatia and China. He emphasised Croatia's favourable geographic position and informed his Chinese counterpart of activities Croatia was undertaking, especially with regard to railway infrastructure in the Mediterranean corridor.

Li said that China was encouraging its companies to apply for tenders and to comply with deadlines and Croatian regulations. He pointed out that the two countries were fostering friendly relations and that Croatia was an important partner to China.

Cooperation in the area of infrastructure is only in its initial, but very good phase and will continue to deepen through the One Belt, One Road and China+16 initiatives, Li said.

The meeting with the Chinese transport minister was the first of several meetings the Croatian delegation will have during their official visit until January 26.

The Croatian delegation includes representatives of the Ministry of Maritime Affairs, Transport and Infrastructure, the HŽ Infrastruktura rail company, the Hrvatske Ceste road construction and maintenance company and the Rijeka port operator.

The visit marks the continuation of the process of intensifying relations between the two countries and preparations for this year's summit between China and 16 Eastern and Central European countries, which will be hosted by Croatia.

On Monday, Butković is scheduled meet with executives of the China Road and Bridge Corporation, which is building the Peljašac Bridge, and the China Communication Construction Company.

More news on the cooperation between Croatia and China can be found in the Business section.

Thursday, 10 January 2019

Construction of Pelješac Bridge Proceeding According to Schedule

ZAGREB, January 10, 2019 - Works on the Pelješac Bridge and its access roads is going according to schedule, Minister of Maritime Affairs, Transport and Infrastructure Oleg Butković told reporters before a cabinet meeting on Thursday.

"We will build everything as planned," he said, adding that the European Union had approved funding for 85 percent of the cost of the entire project. Butković recalled that the project would be carried out in four stages and that work on the first stage was under way.

Asked why contractors had still not been selected for the construction of access roads, he replied: "They will be, don't worry."

The Večernji List newspaper said on Thursday that the state-owned road construction and management company Hrvatske Ceste (HC) had still not selected contractors for access roads to the bridge even though a deadline had expired and that the bridge, being built by a Chinese consortium, might be finished before the access roads.

The contract for the construction of a bridge between the mainland and the southern Pelješac peninsula with access roads was signed on 23 April 2018 between HC and the China Road and Bridge Corporation. The project is worth 2.08 billion kuna (280 million euro), exclusive of VAT, and 85 percent of eligible costs will be covered by the EU. The total length of the access roads is 30 kilometres.

The bridge will ensure a direct road link between the southernmost part of Croatia and the rest of the country which is currently cut off at Neum where Bosnia and Herzegovina has access to the Adriatic Sea.

More news on the Pelješac Bridge construction can be found in our Business section.

Thursday, 10 January 2019

Pelješac Bridge Under Construction as Access Roads Lag Behind

The Chinese need to have Pelješac bridge completed in just over thirty months time (by July 2021), but what of the actual access roads leading to it? That appears to be quite another story, and rather unsurprisingly - a long and potentially complicated one.

As Josip Bohutinski/VL/Poslovni Dnevnik writes on the 9th of January, 2019, the first signs of life of the construction of Pelješac bridge site began today.

The Chinese consortium led by the China Road and Bridge Corporation signed up for this demanding job more than five months ago, and according to the contract, Pelješac bridge has to be built within 36 months, meaning that this strategic Croatian project should theoretically be completed in the summer of 2021. While works on Pelješac bridge itself have finally begun, albeit slowly, the works on the bridge's obviously required access roads are not even close to their beginning. So far, no contractor has even been chosen to build these roads, and Croatian roads (Hrvatske ceste) has now launched two tenders for the eventual construction of the bridge's access roads.

In regard to the first part, more specifically the Duboka-Sparagovići section of the road, offers will begin being taken in the middle of June, but the decision on the contractor has not yet been made, although it has been stated in the related documentation that this decision will be made within 120 days from the day of the opening of the actual bid. It has also been stated that the chosen contractor will be required to build their section of the road within 33 months following their initial introduction to the job. Whether or not Pelješac bridge and its access roads will be completed at the same time is already questionable.

Problems can be foreseen, or better to say predicted for argument's sake, that if one takes into account the simple fact that once the contractor is finally selected, other bidders have the right to appeal, and the resolution of these procedures in such bids typically last anywhere up to three months. If Croatian roads decided on the contractor soon, that contractor would still not actually have anything to do with getting any of their work done until the middle of the year. Seven offers have come in so far, the lowest of which was sent by Integral engineering from neighbouring Bosnia and Herzegovina, ironically a country which has shown the least support for the construction of Pelješac bridge.

Back at the beginning of December 2018, a public tender for the construction of the second part of Pelješac bridge's access roads was published, and the currently estimated value of these works stands at a massive 449.1 million kuna. The deadline for bids for the second part of the road is January the 21st, 2019. The selected contractor will have a 30-month deadline for the construction of the 18 kilometre road to be put into operation, but once again, appeals are expected to follow any final decision, which translates to more waiting around, and more wasted time.

Make sure to stay up to date with the ongoing Pelješac bridge saga by following our dedicated lifestyle and politics pages.


Click here for the original article by Josip Bohutinski/VL on Poslovni Dnevnik

Thursday, 27 December 2018

Croatian Politics 2018: A Year in Review

Years pass, but some things never change in Croatian politics. The year which is about to end has again been full of drama and scandals, and just occasional good news. Remarkably, many of the same issues which you will read about here have featured prominently in our reviews for 2016 and 2017 as well, which just shows that most problems in Croatia are just swept under the rug and never solved. What follows is Croatian Politics 2018, a review of events which will be remembered from the past year, as reported by TCN.

The year began with tensions in the Bay of Piran, part of the Adriatic Sea which Croatia and Slovenia both claim. In late 2017, Slovenia decided to implement the decision by arbitration tribunal which awarded Slovenia most of the bay. However, Croatia has refused to accept the decision, saying that the arbitration process was compromised by Slovenian government representatives who were in collusion with a supposedly independent arbitrator. The tensions raged for a few weeks, with MEPs proposing military solutions and war veterans talking about organising a rather provocative regatta. Eventually, reason prevailed, and the tensions died down. However, the issue is still unresolved, despite assurances to the opposite, with Croatia calling for negotiations and Slovenia insisting on the implementation of the arbitration decision. You are sure to read about this dispute in our 2019 review as well, particularly given Slovenia’s decision to file a lawsuit against Croatia.

Relations with Serbia are always in the focus of interest, and this year was no exception. In January, the government was surprised to hear that President Kolinda Grabar-Kitarović had invited Serbian President Aleksandar Vučić to visit Croatia officially. After a short argument over who is really leading Croatia’s foreign policy, Vučić arrived in Zagreb. While the visit mostly went well, the relations between the two countries deteriorated steadily throughout the year and the debate about whether Vučić should have been invited at all continued. Another turn for the worse took place in April when a Croatian parliamentary delegation’s visit to Belgrade was cut short after an incident in the Serbian parliament caused by a notorious Serbian MP and war criminal Vojislav Šešelj. Tension rose again in August when the anniversary of Operation Storm is traditionally celebrated, marking Croatia’s liberation of previously occupied territories in 1995. Serbian President Vučić gave a series of provocative statements, including comparing Croatia to Hitler.

As for the economy, January brought the first worrying signs about the future of Croatian shipyards, a low number of new orders, and about the government’s apparent unwillingness to continue to cover shipyards’ losses. Later in the year, the crisis in the Uljanik shipyard in Pula and its 3. Maj branch in Rijeka would feature prominently in our reporting. Workers spent months striking due to unpaid wages. As the year ends, the situation is still dire and “strategic partners” which the government hopes to find are nowhere to be seen.

“Reforms” is one of the most popular words of Croatian politicians. Every year in January we can hear officials saying that the year ahead is “the year of reforms” which will make Croatia much more prosperous. Needless to say, these promises are never fulfilled, and 2018 did not disappoint. The issue served the president well since she was able to attack the government for lack of reform efforts whenever it suited her.

Ideological debates and historical revisionism attempts continued in 2018 as well. In February, the government-appointed historical commission published its recommendations on issues related to the authoritarian regimes from Croatia’s past, but the conclusions did not satisfy anyone, except for the prime minister, who likes to pretend that the recommendations have solved the problem.

The year which is about to end has again brought us the problem of censorship, questions about media freedoms, warnings about the rise of the far right, separate commemorations held in Jasenovac, the parliament refusing to sponsor anti-fascism events, people destroying flower beds because they reminded them of communism, historical revisionism on the public television, assaults on journalists, satirists receiving death threats, “suspect” politicians being assaulted, photos of Tito slipping from under Croatia’s coat of arms, former prime ministers being sentenced for corruption, and media regulators receiving death threats.

The Catholic Church is undoubtedly part of the political life in Croatia, so it is no wonder that rumours about changes coming to its leadership draw considerable attention. While nothing has been confirmed, it is expected that the Archbishop of Zagreb, Cardinal Josip Bozanić, could be replaced in the new year. In the meantime, the church has continued to receive vast amounts of money from the state budget, meddle in politics, as well as advise the government on the new abortion law, 

The demographic crisis continued, with high emigration and low birth rates bringing down the number of inhabitants. The president and the government argued about who and what was to blame. The president even presented her measures to solve the problem, which were soon forgotten, and demanded a special session of the government, which never took place. Proposals were presented on how to convince people not to move, as many sectors faced a lack of workers, while many schools started closing down. The extent of the crisis was such that even Serbian President Vučić became "worried." The only “good news” came at the end of the year when reports claimed that the emigration wave was calming down because everybody who wanted and could have left already did.

One of the issues we write regularly in these annual reviews is the construction of Pelješac Bridge, which will connect the Dubrovnik area with the rest of Croatia without the need for travellers to pass through a short stretch of Bosnian territory. After many years of delays, the project has finally moved into the implementation phase. Early in the year, a decision was made to award the tender for the construction to a Chinese consortium, despite protests made by Bosnia and Herzegovina that the bridge could not be constructed before the border between the two countries in the area is defined. The decision to award the contract to a Chinese bidder also brought about a marked change in relations between Croatia and China, which were later further improved by high-level meetings and visits.

Another perennial issue is the future of INA, Croatia’s national oil company, which is owned jointly by the Croatian government and MOL, Hungarian national oil company. In 2016, the prime minister announced that Croatia would buy back MOL’s share of INA. Two years later, nothing has changed. Earlier this year, the government selected financial advisors for the buyback, but the contract with them was never signed. One of the main issues is the future of the INA refinery in Sisak. While in January the relevant minister said he was optimistic about the refinery’s future, by the end of the year he apparently changed his opinion. Another issue is Croatia’s arrest warrant for MOL’s CEO, which Hungary does not want to implement.

Another year has passed, and the supposedly “strategic” project of an LNG terminal on the island of Krk has again gone nowhere. Multi-year delays have continued. The government announced two tenders trying to find out who would be interested in using the terminal once it is built (if that ever happens), but the results were dismal. Just two government-owned companies applied, presumably after receiving a nudge from officials to send their applications and help the government avoid a total disaster. While the project receives verbal support from foreign governments, no one seems to be interested in sending binding offers to use its capacity.

One piece of good business news was the apparently successful conclusion to the worst part of the crisis in Agrokor, one of Croatia’s largest and most important companies. The agreement between creditors was concluded, thanks mostly to Russian banks, although not without an accompanying scandal about high fees paid to consultants, some of whom actually took part in the secretive process of writing the special law which the government adopted to save the company from collapse. The scandal took out Deputy Prime Minister Martina Dalić and government-appointed commissioner Ante Ramljak, who had to resign under pressure. E-mails were published which showed that the prime minister knew more about the dealings than he initially admitted, but he managed to escape more or less unharmed. Agrokor’s former owner Ivica Todorić, who fled earlier to London to avoid arrest, was extradited to Croatia late in the year, after multiple delays and court proceedings. Even Tony Blair’s wife could not help him. He has since been released on bail and is currently awaiting possible indictment. The legal proceedings are expected to last for many years.

Good economic news brought us the first upgrade in Croatia’s credit rating since 2004. Unemployment numbers were also down, although more due to mass emigration than to economic revival. Good tourism results, especially in the pre-season and post-season, helped Croatia achieve planned economic growth for 2018 (still among the lowest in the EU). Slightly more moderate growth is expected in 2019, with the lack of reforms being the main culprit. The budget recorded another good year, with spending and revenues being more or less balanced, while the public debt has continued to decline. The year ended with another round of tax cuts and pension reform. Croatia has also announced plans that it will adopt the euro as its currency. The process is expected to last many years.

The ratification of the convention on preventing violence against women, the so-called Istanbul Convention, somewhat unexpectedly turned into a crisis for the government in April when a large group of HDZ MPs decided to vote against the proposal, despite prime minister’s insistence that it should be ratified. While the convention was easily adopted thanks to opposition support, it turned into another attempt by HDZ’s right wing to weaken or possibly topple Plenković as party leader and prime minister. Just like several other similar attempts, it did not succeed.

A national security issue which has drawn a lot of media attention throughout the year is the acquisition of military fighter jets. The decision was first delayed for years, then it was supposed to be made in 2017, but again delayed first to early 2018, and then beyond. After much lobbying, the government finally decided to buy 12 F-16s from Israel. The questions about the deal persisted, with many asking why Croatia was “rejuvenating” its air force with ancient aircraft. By the end of the year, the contract for the deal has not yet been signed, amid disputes between the United States and Israel about what equipment Israel can legally sell to Croatia. Grand plans about “strategic cooperation” with Israel also appear to be on hold. Defence Minister Damir Krstičević has invested a great deal of personal effort in the deal, but the acquisition is still in question, and its final fate is yet to be determined.

As expected, the political circus took a break in June due to the World Cup in Russia. While the break was initially expected to last just a couple of weeks, until the Croatian national team is eliminated in the first phase of the competition as usual, its spectacular success extended the political break to a full month and more. Of course, leading politicians did not miss this opportunity to travel to Russia and have their picture taken with footballers and fans. Needless to say, even this occasion, which was supposed to unite the country, brought divisions, primarily due to an appearance by a controversial singer at the homecoming ceremony, which was attended by hundreds of thousands of people.

The Istanbul Convention ratification prompted one of this year’s two referendum initiatives to be launched. The other effort involved proposed changes to the election laws, which would substantially reduce the rights of national minorities to elect their MPs. The government was against the referendums, while the president seemed to be of a different opinion. While both initiatives claimed they had gathered enough signatures for the referendums to be held, the government checked the signatures and conveniently found enough irregularities to lower the number of accepted signatures below the required threshold. This was just one of several attempts to pressure the government from the right.

One of the rare reforms which have begun, at least nominally, is the reform of Croatia’s education system, the so-called “curricular reform.” The issue has caused conflicts between coalition partners, with HNS repeatedly threatening to leave the government if their proposals are not accepted. Their threats were not taken seriously by anyone since it is clear that early parliamentary elections would probably bring about an end for the party.

A scandal broke in September whose consequences are still unclear at this time. A ministerial driver was arrested under suspicion that he had informed a suspect about a police investigation against him. Interestingly, the driver is a close friend of Milijan Brkić, HDZ deputy president and Prime Minister Plenković’s chief intraparty nemesis. While Brkić has denied having any role in the scandal or leaking the information about the investigation, he has been conspicuously absent from public affairs in recent months. Other scandals involving Brkić have also resurfaced, prompting allegations that his opponents were trying to eliminate him politically. On the other hand, some potentially embarrassing documents about him suddenly disappeared. The scandal has even reached the president’s office, with the national security advisor resigning in December under still unclear circumstances.

Relations between Croatia and Bosnia and Herzegovina, as well as the connected issue of the status of Croats in the neighbouring country, were at the forefront of Croatia’s foreign policy efforts in 2018. With October elections looming, the year began with Bosnian Croats warning that the election law was unfair and that it could lead to a Croat representative in the Bosnian presidency being elected by more numerous Bosniaks. That is precisely what happened, with candidate Željko Komšić winning the post, although he apparently did not have the support of the majority of Bosnian Croats. This prompted Croatia’s government to launch a campaign within the EU to pressure Bosnia into changing its election law, which then brought accusations about meddling in internal affairs of the neighbouring country.

One of the potentially most explosive events of this year was a war veterans’ protest held in Vukovar in October. The veterans complained about the lack of prosecution of persons suspected of committing war crimes against Croats in the Vukovar area in 1991, which was a problem which they discussed earlier in the year as well. However, many believed that the protest was actually just a guise for a right-wing attempt to bring down the government led by moderate Prime Minister Andrej Plenković and replace him as HDZ president with a more extremist candidate. Plenković and his team appeared at first worried that the attempt might succeed, but with time they managed to limit its consequences. Once held, the protest passed without incident and has been more or less forgotten, except when occasional arrests in the area do happen, which then draw condemnation from local Serbs who say the police is arresting then just to satisfy the Croat war veterans. In the meantime, tensions in the town continue.

Throughout the year, rumours about impending ruling coalition reshuffle and/or early parliamentary elections continued. However, unlike in 2017, which brought about a change in the ruling coalition composition, with MOST being replaced by HNS, this year the government was more or less stable. One potential candidate for another reshuffle was Zagreb Mayor Milan Bandić, whose parliamentary group somehow manages to “convince” previously opposition MPs to switch parties and cross to his side. Numerous legal proceedings against him have not made him any less desirable patron. The substantial Zagreb city budget which he controls probably has something to do with it. In two years, he has managed to increase the number of his MPs from 1 to 12, with additional expansion of his parliamentary group expected early in the new year. The fact that people did not vote for his party did not discourage him at all. There are rumours that Bandić will use the increase in the number of his MPs, who are crucial for the parliamentary majority, to demand several ministerial posts in the new year.

As for the opposition, turmoil in SDP continued, with several attempts being made to topple the party president and “the leader of the opposition” Davor Bernardić. Fortunately for SDP opponents, these attempts have been unsuccessful, so Bernardić remains in his seat while his party’s popularity continues to plummet, with the latest polls showing it dropping to the third position, behind HDZ and Živi Zid. An increasing number of SDP MPs are leaving the party, with some of them joining the government ranks.

The migrant crisis continued, particularly on the border with Bosnia and Herzegovina, with the police employing ever harsher measures to control the borders and NGOs publishing increasingly critical reports about the alleged police violence and irregularities. The police have repeatedly denied any wrongdoing, despite video evidence to the contrary.

The migration issue also brought us another controversy, this time with the signing of the Global Compact for Migration in December. President Kolinda Grabar-Kitarović, who this year marked three years in office, initially supported the agreement, but then suddenly changed her mind, announcing she would not travel to Marrakesh where the UN conference was held. The government immediately said that Croatia would support the declaration nevertheless, which caused protests from right-wing circles. In the end, the non-binding resolution was supported by Croatia, but no-one really expects it will be implemented.

The final few days of the year brought us another major scandal, whose consequences will become clear in the following months. The president decided to dismiss her domestic policy adviser Mate Radeljić, who many believed had influenced the president to take a more critical position towards the government. After he was dismissed, Radeljić said he was threatened by a Security-Intelligence Agency (SOA) official not to try to damage the president politically after being dismissed. He was allegedly told that the agency was ready to run into him with a car if necessary. The president’s office and the SOA issued statements saying they had acted legally, but interestingly they did not outright deny all of Radeljić’s claims. It is expected that Radeljić’s dismissal will result in better relations between the president on the one side and the government and HDZ leadership on the other, just in time for the presidential elections next year.

Another exciting political year is ahead of us. It will include at least two elections (for European Parliament in May, and for president probably in December), and there is always a possibility the early parliamentary elections might take place. Stay with TCN for all the latest political and business news.


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