Koncar to deliver 70 new trains for state railways by 2024 in a €171m deal

NEWS 28.06.2022 16:17
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Source: Zoran Pehar/N1

"With 21 electric trains manufactured by Koncar Electric Vehicles, the state-owned HZPP passenger rail company should have 70 new trains by 2024, which will make up 50 percent of its fleet, it was said during a visit by Minister Oleg Butkovic to the Koncar factory on Tuesday," state news agency reported, without attributing the statement to any source.

Koncar Electric Vehicles (KEV) is part of the larger Koncar Group, one of the largest engineering companies in the country, majority-owned by private pension funds. KEV specializes in manufacturing trains, trams, and similar vehicles.

The recent order for 70 trains, signed with the state railways company, is worth 1.3bn kuna (€171 million), with 85 percent of the funding coming from the EU.

In reference to reconstruction projects on the Croatian rail system, Butkovic said that the reconstructed Zapresic-Zabok and Savski Marof-Zagreb rail lines, valued at €100 million, “should be completed” by the end of July, and that the Vinkovci-Vukovar rail line is expected to be completed by the end of the year.

Koncar’s CEO, Gordan Kolak, said that the Russian invasion of Ukraine has led to a significant increase in prices of raw materials, which complicates the manufacturing process.

“In this context, we also have significant challenges in these projects because prices have risen significantly compared to the time when they were agreed… Prices have increased throughout Europe, and in all of Končar’s export markets, and the company is in talks with clients to find solutions,” Kolak said.

CEO of the state passenger railways company HZPP, Zeljko Ukic, and Minister Butkovic responded to questions related to frequent delays in passenger train lines, and both called for “a little patience.” State railways is often ridiculed in Croatia for delays, low reliability, and often sluggish travel times between destinations.

Ukic said that, “given the numerous railway infrastructure reconstruction projects, it is extremely difficult to regulate passenger traffic,” and that “efforts are being made to maintain the quality of transport as high as possible.”

“There are long delays. Travel by train is not the same as on the motorway, but these investments will raise the quality of this sector to a satisfactory level,” said Butkovic, adding that over the next ten years the “greatest emphasis” will be on investment in railway modernisation with around €3.5 billion of investments planned by 2030.

“In that context, he underscored the need to amend the law on public procurement as projects are often slowed down by numerous complaints,” state agency Hina said.

“We cannot influence complaints, but we need to do everything in our power to reduce the number of complaints to a minimum,” Butkovic said.

“He added that due to a lack of funding, it was not possible to invest in the motorways and railways simultaneously,” Hina cited Butkovic as saying.

He said that “the political decision to invest in the motorways first was good,” noting that about €5.5 billion had been invested in the motorways to date.

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