June 15 (SeeNews) - The European Commission said it has approved under EU State aid rules a Croatian plan to extend the Istrian Y motorway concession agreement between Croatia and the company Bina-Istra, allowing 165 million euro ($191.2 million) of new investments to go ahead.
"The prolongation of the Croatian Y motorway concession will promote regional growth and investment, as well as enhancing citizens' safety and reducing congestion," commissioner Margrethe Vestager, in charge of competition policy, is quoted saying in a statement issued by the EC late on Thursday.
The prolongation of the concession allows Bina-Istra to finance the construction of a 28 km long second carriageway on the north-eastern side of the motorway.
The 145 km Istrian Y motorway links the Istrian region with the rest of Croatia. The motorway is operated under a concession from 1995, which was awarded to the company Bina-Istra until 2027.
Croatia notified the Commission in March of a prolongation of the concession agreement until 2032. Under certain conditions relating to the repayment of Bina-Istra's debt, the concession can be extended by up to 18 more months.
The EC noted it examined the measure under EU State aid rules on services of general economic interest and EU public procurement rules, according to which companies can be compensated for the extra cost of providing a public service on certain conditions.
The Commission concluded that the measure will promote growth and unlock investment, while limiting the impact on motorway users, in line with EU State aid and public procurement rules.
($=0.8630 euro)