Employees of Zagreb's Brodarski Institut shipbuilding institute have sent an open letter to the government and the Restructuring and Sale Centre (CERP) opposing last week's decision on the institute's liquidation and calling for prompt action to find a solution to salvage the institute.

The government last Thursday passed a decision on the creation of conditions to carry out the institute’s liquidation, under which the institute would get a government loan of HRK 60 million (€8 million) to settle its obligations to creditors to prevent its bankruptcy, in which case the management and proprietary rights of the state as the owner would cease to exist and be transferred to the official receiver, and to protect the institute’s valuable assets from seizure by its creditors.

The plan is, after liabilities to creditors and liquidation costs are settled, to transfer the institute’s immovable property to the state while CERP would make a decision to discontinue the institute’s operation and appoint a liquidator.

In the letter, published on Monday, the institute’s employees note that the explanation for the government’s move contains incorrect claims while leaving out a number of facts. They say that apart from its business and restructuring plans, the institute had sent its owner’s representative a number of concrete proposals for programmes and projects that were simply ignored.

They note that since 2017 debts had been incurred exclusively to prevent the institute’s bankruptcy and were not irrational as there existed repayment plans that did not envisage state budget funds. Without that borrowing, the institute would have been declared bankrupt three times so far, which the state’s representative was aware of but failed to take any action, they say.

The appraisal of the institute’s assets, which are estimated at HRK 299.5 million, includes only the institute’s immovable property and land but not the value of its equipment, technical documentation, acquired skills and competencies or the potential of resources other than real estate, the employees say, adding that the state as the owner should have intervened in a timely manner to protect the institute’s core business – research and development.

The letter notes that instead of investing in improving the institute’s activities and treating them as areas of interest for Croatia, the state sees an opportunity in the sale of real estate.

The government is ignoring the fact that the institute conducts measurements for foreign and domestic clients and that projects on which it works are all related to reduction of CO2 emissions and environmental protection, the employees say.

“By liquidating the Institute also liquidated will be research work as well as competencies for which there is no replacement in Croatia. That way a decision is being made that in future, as a maritime country, Croatia will not develop the many branches that are gaining in importance due to current developments and regulations on environmental protection and reduction of emissions,” the employees warn in the letter to the government, noting also that in terms of its area, Brodarski Institut is the biggest laboratory complex in the country.