Zagreb, 27 August - After more than a year of intensive negotiations with the European Commission, in which the privatisation model of six Croatian shipyards was finally agreed, and a number of meetings with trade union and management representatives, in July the Croatian Government finally reached the decision on privatisation of shipyards. On 1 August the Croatian Privatisation Fund published a public tender for the purchase of shares of shipyards 3. maj, Brodograđevna industrija Split, Brodogradilište Kraljevica, Brodotrogir, Uljanik and Brodosplit – Special Vessels Shipyard (BSO) with the deadline for submitting offers on 30 September 2009.

Shipyards BSO and Uljanik will be sold for the nominal price of shares and the other shipyards for one Kuna. Bidders will have to make their own investment and operation plans and cover at least 40 percent of restructuring expenses but will decide for themselves which part of shipyards` debts they will cover while the remaining part will be covered by the state budget. The bidders must also accept the collective agreement, and in case of redundancies, redundant workers must be provided for in accordance with the Labour Code.

Even though the model agreed with the European Commission obliges to non-discrimination in tenders, in other words obliges to acceptance of even those offers which foresee conversion of shipyards, the Government claims that, since the highest offer is not the only criterion, the offers which foresee the continuation of activities will be favoured. 

Prior to the publication of tenders in mid-July, Metalworkers` Trade Union of Croatia (SMH) requested the postponement of privatisation. SMH Acting President Vedran Dragičević pointed out that it was not the time to sell shipyards and that the situation was dramatic. In shipyard 3.maj there is no money for workers` wages and the situation is similar in Trogir and Split, shipyards are not solvent and 11,500 workers live in fear, so trade unions are considering withdrawing their representatives from privatisation committees in certain shipyards. SMH requested a few months` postponement in order to prepare a serious privatisation, not like the privatisation carried out in Split Ironworks. Prior to privatisation, it is necessary to find a model for temporary financing of shipyards and reduce the number of employed for 1,500 workers which should retire or get severance pays, what would also be more favourable for the future buyers.

If the privatisation is still carried out according to Government’s decision, trade union will offer a social agreement to potential buyers which would oblige them to ensure the continuation of activity, investment in shipbuilding development and 25 plus one share for workers as a control mechanism for at least five years.

Until the end of August the tender documentation, which enables the insight into shipyards` business, was bought by 16 potential buyers. Trade unions are cautious regarding potential buyers because none of them has any experience in shipbuilding industry. The most serious candidate for the purchase of shipyards (five of them) is Danko Končar, the owner of Kermas Investments company. At the end of August he met trade union and works council representatives from 3. maj shipyard.

It is interesting that till the end of August nobody has shown interest in Uljanik shipyard, the most successful shipyard in Croatia, which is the only one operating at a profit, has full order book and will most certainly make profits. The Ministry of Economy says that, in case there are no buyers, another privatisation model would be possible for Uljanik shipyard which includes public offering in the market but trade unions oppose this solution. According to the previous agreement between trade unions and the Government, in case no one is interested in Uljanik, it should remain in state ownership and considering that it operates at a profit its sale is not a matter of urgency.