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Motorway Company Privatisation in the Works

Maribor, 16 August (STA) - DARS, the state-owned motorway company, appears slated for partial privatisation. The Transport Ministry will shortly publish a call for bids for a consultant to help it find a strategic partner, Transport Minister Patrick Vlacic said in a recent interview for Vecer.

"It would be ideal if we got a partner to acquire DARS and its debt, perhaps even in excess of 50% of the share capital, and finish the motorway programmes that need to be completed," Vlacic told Saturday's Vecer.

His statement comes just a month after the Capital Assets Management Agency, the custodian of state-owned shares in companies, determined in its draft strategy that DARS would remain in state ownership.

The strategy says that private partners would only be invited if this helped reduce state guarantees issued as part of the motorway construction project, in effect reducing contingent liabilities of the state.

DARS has debt in excess of EUR 4bn as a result of nearly two decades of financing motorway construction with loans guaranteed by the state. The management estimates it will take the company 50 years to pay off the debt.

The vast majority of the planned motorway network has already been completed. There are some short sections that are yet to be built, but plans are afoot to connect more remote areas of the country to the motorway network with expressways.

News that DARS may be privatised is already starting to raise questions.

A commentary in Tuesday's Vecer says that no private partner will want to buy the heavily indebted company unless it gets something very lucrative in return - the motorway network and the attendant right to collect toll.

The commentator suggests that privatisation may be the only option, but the taxpayers will end up footing the bill in any case, by way of state guarantees being called up or through higher motorway tolls.

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