The contract was signed in Zagreb by Croatia’s minister of the sea, transport and infrastructure, Mr Oleg Butković, and the president of the HŽPP management board, Mr Željko Ukić.
Under the deal, which runs from January 1 2019 to December 31 2028, HŽPP will receive Kuna 4.6bn ($US 710m) from the state budget for the operation of publicly-supported passenger services on the national network.
The contract is in line with current EU regulations on market opening for domestic rail passenger services, which allows for the direct contracting of services with a national carrier.
The multi-annual agreement is intended to provide a basis for investment including the modernisation of booking and fare collection systems and renewal of rolling stock.
Butković says Croatia needs to focus on fleet modernisation because current rolling stock falls short of passenger expectations. For this reason, the ministry is planning a Kuna 1.2bn order for 21 new suburban and regional trains, which will be acquired with the aid of an EU grant.
A Joint Assistance to Support Projects in European Regions (Jaspers) funding application is due to be completed in February and a decision on European funding is expected in the second quarter.
In the 2019 timetable, HŽPP operates a total of 796 trains a day, including 60 international services, on 35 routes.