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LANDOWNERS ARE POISED TO ACCEPT PRICE COMPROMISE

Kia land battle may soon end

SWELTERING discussion on prices for the land on which carmaker Hyundai/Kia plans to build its new plant has brought the first results after small landowners formally accepted the conditions of Economy Minister Pavol Rusko.
The deal comes just several days prior to the visit of one of the top managers of the South-Korean car colossus, which announced on March 2 that it had chosen Slovakia over Poland and would build its new plant in Žilina, the country's offered site for Kia Motors' €700 million investment in central Europe.

SWELTERING discussion on prices for the land on which carmaker Hyundai/Kia plans to build its new plant has brought the first results after small landowners formally accepted the conditions of Economy Minister Pavol Rusko.

The deal comes just several days prior to the visit of one of the top managers of the South-Korean car colossus, which announced on March 2 that it had chosen Slovakia over Poland and would build its new plant in Žilina, the country's offered site for Kia Motors' €700 million investment in central Europe.

On June 7, Rusko warned owners that the state would exercise its eminent domain rights to start expropriation procedures immediately unless the land owners opened to compromise.

One day later, the petition commission representing the owners accepted the conditions under which the purchase price should be set as the maximum price chosen from the opinions of three independent land value experts. Until now, the price was to be set as the average price determined by expert estimates, the news wire TASR reported.

The opinions of land value experts vary between Sk103 (€2.58) and Sk146 (€3.65) per square metre. The highest proposed price was Sk170 (€4.25) per square metre.

"The difference between individual opinions is only Sk10 - 15 [per square metre]," said Rusko.

In late April, the media circulated an unofficial price of Sk96 (€2.4) per square metre, evoking protests from landowners who had hoped to sell their land for at least Sk360 (€9) a square metre.

Landowners from the villages of Teplička Nad Váhom, Nedzedza, Gbelany, and Mojš demanded that the price be set at Sk350 (€8.75) per square meter in Teplička Nad Váhom and Sk302 (€7.55) in other villages, the news wire SITA wrote.

Dušan Mikulík of the petition committee said that the owners would turn to the courts to pump up the prices. He urged landowners not to sign any sale contract with the state until the dispute over the land prices was definitely solved.

In the first stage of the project, the state planned to buy around 168 hectares of the 270-hectare site.

The government took the obligation to provide the land to Kia by August 31. However, the economy minister has been pessimistic about meeting the deadline.

In addition, the agreement between the petition committee and the state does not guarantee that individual landowners will agree to the price.

"In the event that a land owner disagrees with the sale, the only possibility is the expropriation of the land in harmony with Slovakia's laws. The Slovak constitution stipulates that expropriation or [forced] limited ownership is possible only as an unavoidable measure in the public interest and for an apposite compensation," Viliam Karas, a lawyer with ULC Čarnogurský, told The Slovak Spectator.

"In the mentioned case, public interest can be documented by an official record from the Economy Ministry on the significant investment," he added.

According to Karas, owners who disagree with the offered price for their lands based on land experts' estimates can wait for the expropriation process, in which the market price will also be set based on expert opinions.

In that case, experts will consider the price of comparable lands of those owners who did agree with the price offered by the state, he added.

"I think that the price defined this way will not considerably differ from the price accepted by the majority of the landowners," Karas concluded.

The French auto giant PSA Peugeot Citroen, which is constructing a new €700 million factory in the western Slovak town of Trnava, 45 kilometres northeast of the capital, Bratislava, has been able to manage its land purchase.

Alain Baldeyrou, general manager of the Peugeot Citroen Trnava Project told The Slovak Spectator that his company had to purchase 192.13 hectares.

The purchase price of Sk130 (€3.22) per square metre was set based on expert appraisal. The price exceeded the market price of the farmland in the given locality at that time [Sk50 - 70 (€1.24 - 1.73) per square meter].

"The purchase of the land for the construction [of the factory] was completed in September 2003, and 257 landowners were involved. The land that will serve as the site for the future supplier park near the PSA plant is being wrapped up now. The acreage of the land for the industrial and supplier park is 51 hectares," Baldeyrou told The Spectator in early April.

The process of buying the land for PSA utilities lasted approximately eight months, from December 2002 to July 2003, and was completed without any complications. However, the land purchase for the supplier park started in November 2003 and is ongoing.

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