Poland is still in the race for a $US1.4 billion investment from Hyundai despite reports the South Korean carmaker prefers its rival Slovakia, an investment official told Reuters.
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Andrzej Szejna, deputy head of the PAIiIZ investment agency, reportedly said Poland had offered Hyundai a financial incentives package worth 15% of the investment value – the maximum allowed in the European Union, which Poland joins in May.
Hyundai is expected to decide in February but is leaning towards Slovakia due to lower labour costs, a source at the company told Reuters last week.
“I am very calm. We are waiting for a decision in February, and the Polish government is convinced this offer, which we have modified many times to give the best possible terms, will meet the investor’s expectations,” Szejna reportedly said.
According to Reuters, Szejna said Poland took the Slovak challenge seriously, but argued that Poland’s population of 38 million – against five million in its southern neighbour – was one of its strengths in the two-horse race.
The news agency noted that Poland is the largest of 10 countries, including Slovakia, joining the EU this spring and will be the sixth-largest country in the enlarged 25-country bloc.
“We have stressed that Poland aspires to play a leading role in the EU, so one can’t disguise the fact that investments here could be safer in the sense of being protected by the Polish government,” Szejna told Reuters.
In addition to political clout, Szejna reportedly said, Poland’s size gives it a bigger domestic market and a larger pool of skilled labour, with 1.2 million students in higher education.
Reuters noted that, last year, PSA Peugeot Citroen picked Slovakia over Poland for a €700 million ($889 million) plant, scared off by Poland’s higher labour costs and crumbling communist-era roads.
“Poland’s only slight weakness, as everyone knows, is our road infrastructure,” Szejna told Reuters, though he pointed out that the site offered to Hyundai, next to a motorway, has good links.
He reportedly added that Poland has the chance to develop a modern road network in the space of a few years thanks to EU funding.
According to Reuters, analysts estimate that investment inflows throughout central and eastern Europe fell in 2003, adding intensity to the rivalry between Poland and Slovakia – both of which have cut their corporate tax rates to 19% as a sweetener.
