Wood-processing company Grandwood Holding, which had announced it would build a plant in the Ferovo industrial park in Vranov nad Topľou (Prešov Region) with state assistance, will not now go ahead with the project, the TASR newswire reported on June 13, citing Economy Ministry spokesperson Stanislav Jurikovič.
Košice-based Grandwood, which has foreign backers, was planning to build a wood-processing plant worth €42 million and create 390 jobs. The plan assumed state aid of €1 million for machinery and equipment, €16.4 million in the form of tax relief until 2023, and €3.9 million geared towards job creation.
The government had expressed support for the investment, while opposition party Freedom and Solidarity (SaS) filed a criminal complaint in connection with the planned state aid, according to TASR.
In a letter addressed to Economy Minister Tomáš Malatinský, the head of Grandwood, Ridvan Serves, stated that he found the media presentation of the project to be offensive and personal. He reportedly said that the media had portrayed the state aid as being too high and reported that there was uncertainty about the continuation of the new jobs after the aid expired. There have also been suggestions that the company is close to the ruling Smer party and that cronyism was involved in the deal.
The Sme daily wrote on June 14 that Prime Minister Robert Fico signed an informal memorandum with the company promising state aid worth €21 million, but that the government had never formally agreed any support for the wood-processing company. The Economy Ministry hesitated, Sme reported, due to a lack of evidence to support the firm's application for aid. The state investment agency, SARIO, also had doubts when scrutinising some details of the planned investment, Sme wrote. The registered unemployment rate in Vranov is almost 25 percent – and so the Grandwood Holding investment, which promised 390 jobs, was seen as crucial for the region.
Sources: TASR, Sme
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
14. Jun 2013 at 10:00