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New rules for major investments

SLOVAKIA has adopted new legislation for so-called significant investments. The ruling Smer party describes it as a tool to attract new investors to Slovakia but the opposition has criticised it, saying it grants the state government more power deciding over large investments to the detriment of municipalities and expands the state’s powers of expropriation.

SLOVAKIA has adopted new legislation for so-called significant investments. The ruling Smer party describes it as a tool to attract new investors to Slovakia but the opposition has criticised it, saying it grants the state government more power deciding over large investments to the detriment of municipalities and expands the state’s powers of expropriation.

The revised law increases the minimum amount required for an investment to qualify as significant, from €33.194 million to €100 million. The category of significant investments will be extended to encompass all construction projects except for those involving mining. The government will have to prove that the investment is in the public interest. According to critics, municipalities’ ability to intervene in the process of approving significant investments will be limited.

The new legislation was drafted by three Smer MPs, Maroš Kondrót, Michal Bagačka and František Petro, who stated that “the aim of the proposed legal adjustment is to make preparation and realisation of significant investments more effective and thereby contribute to making the business environment in the Slovak Republic more attractive, maintaining economic growth and reducing the unemployment rate”.

Significant investments differ from normal investments in that they are granted a faster approval process and a smoother expropriation proceeding. This mechanism is already used for construction of highways and dual carriageways.

Parliament passed the revision to the law on measures pertaining to preparation of significant investments, which if signed into law by President Ivan Gašparovič by the end of June, will take affect on August 1.

The opposition objected to the adoption of such important legislation via a draft prepared by a group of MPs and not by the government itself. This meant that the draft revision did not go through inter-departmental review and that there was no public discussion about it.

The opposition has criticised the adopted revision for extending conditions under which the state can expropriate private property when the government decides that doing so is in the public interest.

“I am convinced that such interferences in the constitutional ownership right in the so-called public interest via the government are inadequate and unacceptable,” Ján Figeľ, the chairman of the opposition Christian Democratic Movement (KDH), said during a discussion programme of the TA3 newswire.

Before the revision was passed, the KDH considered challenging it with the Constitutional Court.
Smer’s revision also abolished the right of municipalities to intervene as ‘concerned parties’ in the process for approving ‘significant investments’.

Municipalities have objected to the revision.

“We are not glad that towns and municipalities are losing their power,” Jozef Dvonč, the chairman of the Association of Towns and Villages (ZMOS), told the Pravda daily. “We were not even able to offer our opinion on this proposal because it did not go through inter-departmental review. The only instrument which we have left in our hands is the master plan.”

Each investment must be in harmony with a municipality’s master plan, the plan that guides development and growth of a city, Pravda wrote.

Changes adopted during the parliamentary discussion

Authors of the draft revision eliminated from the bill the criterion that only investments that create at least 300 jobs can qualify as a significant investment.

Kondrót explained to the Pravda daily that he objected to this condition from the very beginning, as the revision did not specify how long the investor should keep these jobs and that he did not see any reason why it should specify 300 jobs and not 200 or 500.

The draft revision originally extended the category of significant investments to all types of construction. Based on a proposal by Richard Raši, the mayor of Košice, and Smer MP Ján Senko, municipalities will still be able to have a say over mining projects. According to Raši, the original wording of the draft would have denied Košice the ability to intervene in mining projects, such as the extraction of uranium in Jahodná, close to the municipality.

Environment Minister Peter Žiga supported the proposal.

“As the environment minister, I unambiguously refuse [to allow] extraction of uranium in the locality of Jahodná, or gold in Detva,” said Žiga, as quoted by TASR. “I regard as necessary that self administration is not stripped of the possibility to effectually reject mining in such environmentally-sensitive cases.”

The civic association OZ Nie Ropovodu (No to the Oil Pipeline), which is fighting against the construction of an oil pipeline from Slovnaft refinery to Schwechat in Austria via Bratislava and Žitný Ostrov, objects to the fact that only mining projects were excluded from the revision and not also energy projects. They view the revision as a tailor-made solution to help clear the way for construction of the oil pipeline.

Miroslav Dragun, the chairman of OZ Nie Ropovodu, told TASR that even within the ruling Smer party opinion over the revision is not unanimous, pointing to the deputy prime minister for investment, Ľubomír Vážny, who did not want to exclude towns and villages from the decision-making process on significant investments and also questioned the decision to exclude mining projects but keep energy-related projects.

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