SOLD! KIA gets land

THE LONG-lasting drama around the purchase of land intended for the KIA automobile manufacturing plant entered its final act. On April 20, the Slovak Cabinet agreed that the state would pay the asking price of Sk350 (€8.80) per square metre.

THE LONG-lasting drama around the purchase of land intended for the KIA automobile manufacturing plant entered its final act. On April 20, the Slovak Cabinet agreed that the state would pay the asking price of Sk350 (€8.80) per square metre.

The proposal to purchase the remaining 50 hectares of land at a price roughly Sk200 more than the official evaluation price came from Agriculture Minister Zsolt Simon. The solution will sip out Sk180 million (€4.5 million) from the state.

Landowners who refused to sell their land for the official evaluation price of Sk140 (€3.5) per square metre stand to benefit.

"This is the best of the worst possible solutions for Slovakia," Minister Simon said after the ministers reached their agreement. He said the process of purchasing the plots through the country's land management authority, the Slovak Land Fund (SPF), could start April 21.

"There is nothing else left for us to do but accept the landowners' demands," Simon told news wire SITA.

Economy Minister Pavol Rusko originally proposed a land-exchange deal, saying it was the best way to resolve the situation.

According to Rusko's land-swap proposal, private investors would buy the plots at the requested price and then exchange the land for another parcel administered by the Slovak Land Fund. The government would then transfer the land it received from the investors to KIA.

The cabinet rejected Rusko's proposal on April 13. Although the situation did not go as Rusko proposed, the Economy Minister welcomed the prospect of wrapping up the land drama by the end of the month.

"The minister appreciates that an agreement has finally been reached regarding the land for KIA, even though he does not consider this solution the best one. However, he thinks that the option is acceptable and he is glad that the problem will get solved," Maroš Havran, spokesman for the Economy Ministry, told The Slovak Spectator.

Havran explained that based on Šimon's proposal, the Slovak Land Fund would purchase the remaining land and lease it to companies GovInvest I and II for 99 years, with the possibility of subsequent sale. The agency will lease the land to KIA.

According to Simon, Sk80 million (€2.04 million) would come directly from the pocket of the Economy Ministry, while the rest (Sk100 million, €2.55 million) would be paid by the land fund SPF.

The agreement over the land complication will certainly please KIA representatives who, according to media reports, were getting nervous about the lack of a solution regarding the land that the Slovak state had promised to them.

"The Korean managers of the investment had a working meeting with the Prime Minister and the Economy Ministry [in early April] where they were presented with the eventual solutions. In fact, they have accepted the solution and have no objections," Havran told The Slovak Spectator.

Media also reported that KIA has been communicating with investment agencies in the Czech Republic, Poland and Hungary. However, official KIA sources denied having talks with neighbouring countries.

State agencies have already purchased 174 hectares of land near Žilina out of a requisite 230 for the auto-manufacturing plant. According to original investment plans, KIA building works should be finished by September 2005. Trial production should start the following May, with real production starting in January 2007.

Local media reported that the owners who sold their land at the official evaluated price are dissatisfied.

Mayor Dušan Vajda of the village of Nededza told the daily Pravda that the owners feel cheated. It is expected that they will take legal steps to squeeze out the difference in price from the state.

Justice Minister Daniel Lipšic explained that those who once signed the sale contract are not eligible by law for the higher sum.

KIA announced on March 2, 2004, that it had chosen Slovakia over Poland and would build its new plant in Žilina, investing €700 million in central Europe.

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