The European Commission on Thursday approved Croatia's plan to expand the Istrian Y motorway in western Croatia, paving the way for the €165 million investment.

The European Commission (EC) has approved under EU state aid rules a Croatian plan to extend the Istrian Y motorway concession agreement between Croatia and the French-Croatian road management company Bina-Istra. This will allow €165 million of new investments to go ahead, the EC said in a press release.

“The prolongation of the Croatian Y motorway concession will promote regional growth and investment, as well as enhancing citizens’ safety and reducing congestion. Our decision will ensure that the motorway extension can be built, while limiting any potential distortions of competition,” said Commissioner Margrethe Vestager, in charge of competition policy.

The Istrian Y motorway is a 145 km long motorway linking the Istria peninsula in the northern Adriatic with the rest of Croatia. The motorway has been operated under a concession since 1995, which was awarded to the company Bina-Istra until 2027.

In March 2018, Croatia notified to the EC about the extension of the concession agreement until 2032.

The extension of the concession will allow Bina-Istra to finance the construction of a 28 km long second carriageway on the north-eastern side of the motorway. This investment is expected to cost €165 million, said the EC.

The EC examined the plan to determine if it is in line with EU’s rules on state aid for services of general economic interest, and the EU’s public procurement rules, according to which companies can be compensated for the extra cost of providing a public service under certain conditions.

It concluded that the plan will promote growth and unlock investment, while limiting the impact on motorway users, in line with EU’s rules. Based on this, the EC approved the plan.

Croatia’s Transport Minister, Oleg Butkovic, said that the decision is good news, adding that he expected construction work on the new carriageway to begin in the autumn.

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