DO CROATIAN HIGHWAYS HAVE TO BE GIVEN IN A CONCESSION?

„Public debt monetization related to the companies HAC and ARZ“ feasibility study was publicly disclosed at the end of October 2013. Based on its results, an internation- al tender for a concessionaire selection for the next 40-50 years has been announced. Highways have currently been operated by 100% state-owned companies: Hrvatske autoceste d.o.o. (HAC) and Autoceste Rijeka-Zagreb d.d. (ARZ). Due to restructuring of these companies, HAC established a new company for toll collection and highway maintenance at the end of 2012. This merger should unite business operations of two highway operators and absorb the majority of their employees. The chosen option of public debt monetization of Croatian highways’ operators by giving highways in a concession is elaborated in this paper. It is compared with similar solutions in the international practice as well as with the current scenario of toll collections and highways’ maintenance. The results of the analysis have shown that completed highways concessioning could obtain only short-term to maximum midterm favourable fiscal effects, while long-term budgetary effects are very questionable. Keeping highways under operation and maintenance of Croatian concessionaires is a financially sustainable option in the long run, provided that excess debt due in short and mid-term is refi nanced, and that Croatian highways operators are thoroughly restructured.