(ZAGREB) - The Croatian government said Wednesday it planned to privatise three of five struggling shipyards as part of a restructuring required by the European Union, which Croatia hopes to join in 2010.

The government asked the Croatian Privatisation Fund to draw up models for the sale of the Uljanik shipyard in the port of Pula, Kraljevica close to Rijeka and Brodotrogir near Split, the news agency HINA reported.

The shipyards were to be privatised by March 2009, Deputy Prime Minister Damir Polancec told a government session.

Polancec said the "privatisation of shipyards should allow for their restructuring with the aid of private partners," adding the plans should be sent to Brussels this week, well ahead of an EU-set deadline for end-June.

The tenders could be called by September, according to local media.

The Croatian shipbuilding industry currently enjoys a government subsidy equal to 10 percent of the cost of each new ship that is ordered, support that it will have to do without if Croatia wishes to join the EU.

EU membership talks opened in 2005.

Shipbuilding accounts for around 15 percent of Croatia's exports. The five shipyards, all of them leaking funds, employ some 11,500 people.

Experts warn their production capacities, programmes and products have to be modernised, pointing notably to technological inferiority compared with their global rivals, low productivity, a labour surplus and outdated management.

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