GOVERNMENT CONFIRMS COMMITMENT FOR REFUGEE HOUSING IN

UNCLAS ZAGREB 000264

SIPDIS

DEPT FOR PRM, EUR/SCE AND EUR/PRM, BELGRADE FOR REFUGEE ASSISTANT
KURIC

E.O. 12958: N/A
TAGS: PGOV PREF PREL EUC HR
SUBJECT: GOVERNMENT CONFIRMS COMMITMENT FOR REFUGEE HOUSING IN
VUKOVAR AREA AMID RUMORS OF BUDGET CUTS


1. (U) SUMMARY: Despite expected government-wide budget cuts, the
GOC has said there will be no interruption of housing construction
for the Vukovar area during this budget year. Returnees to this
region comprise the lion's share of beneficiaries in the
government's housing care program inside the Areas of Special State
Concern (ASSCs or areas most affected by the war). All housing seen
during a Vukovar area field visit was of high quality. END SUMMARY.


2. (U) On Friday, May 8, working level representatives from the
European Commission, UNHCR, U.S. Embassy, and OSCE Office in Croatia
visited housing care beneficiaries and housing care construction
sites in the Vukovar area. Ana-Marija Radic, Head of the
Directorate for Areas of Special State Concern at the Ministry for
Regional Development, Foresty and Water Management, led the visit.
Ms. Radic reported that 450 apartments in the Vukovar area are
planned for construction during the 2009 fiscal year. Of these, 248
are scheduled to be completed within three months, and the rest are
to be completed by September. Ms. Radic said the Vukovar area has
840 pending beneficiaries (former OTR holders who have been approved
for housing assistance),or approximately half the pending
beneficiaries for all ASSCs within Croatia.


3. (U) Due to the global financial slowdown, the GOC is expected to
implement significant cuts across its budget, though the ministries
affected and the exact amounts are unconfirmed. When asked if
possible budget cuts could affect the provision of housing care in
the Vukovar area, Ms. Radic said her Ministry would have enough
money to finish construction planned for 2009. The 450 apartments
expected to be completed by September are "covered" and any
construction done after September will be in the 2010 budget. She
did note that financing could be a problem the construction firms
the Ministry contracts. Many are having financial troubles and the
banks are unwilling to give loans. She said that this could make
future construction slower than expected. However, a representative
from one of the construction firms working on some of the Vukovar
projects later said that the problem is not as grave as Ms. Radic
implied and some of the financial problems could be lessened if they
received quicker payments from the government.


4. (U) The delegation first visited a neighborhood with apartment
buildings in various stages of reconstruction: some not yet begun,
some in the middle of reconstruction, and some almost complete. The
side-by-side comparison of the buildings allowed the group to see
the extensive damage that existed and compare it with what will be
the final product. The almost complete apartment building had
relatively spacious apartments and appeared to be of a high
standard.


5. (U) The group also visited two ethnic Serb returnee beneficiaries
of the housing care program in the nearby town of Vinkovci. Both
returnees had lived in their government purchased apartments for
approximately one year. The apartments appeared to be spacious, of
high quality, and were located in a mixed-ethnicity apartment block
in a nice residential neighborhood. The first returnee visited was a
recently retired grandmother who was very satisfied with her
apartment and had no complaints about the accommodations, though she
did seek the Ministry's help to accelerate her son's application for
housing care. The second returnee was an elderly gentleman who,
though nostalgic for the pre-war days, was happy with his apartment.
His apartment had the same layout as the first but lacked major
kitchen appliances. He said he could not afford a stove and instead
used a hot-plate.


6. (U) COMMENT: Though possible budget cuts threaten to slow down
the newly accelerated pace of housing care provision, 2009
beneficiaries from the Vukovar area do not appear to be at risk. The
quality of housing care provided continues to be good. Budget issues
will be one of the primary issues for discussion at the next
roundtable meeting between the Deputy Prime Minister for Regional
Development, Reconstruction and Return and Ambassadorial level
representatives from the EC, OSCE, U.S. Embassy, and UNHCR,
currently expected to take place within the first two weeks of June.


BRADTKE