Kia Motors is seriously concerned about a possible delay in the preparation of the site for its planned €1 billion plant in Slovakia, a minister reportedly said.
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The Slovak government reportedly has run into trouble purchasing land for the Kia plant, which will be the country’s largest green-field foreign direct investment ever, as several landowners refused to accept the price offered by the state.
“We have received a letter from Kia Motors, in which there was a serious concern about the current progress of works,” Slovak Economy Minister Rusko told a news conference, Reuters said.
The news agency said Slovakia, which joined the EU in May, has to prepare the site for the start of construction work by the end of August. Rusko reportedly said there was the danger of a delay of up to four months if the government had to expropriate the land.
According to Reuters, Stanislav Vinc of the state body in charge of preparing the site for the Kia plant said the state had so far secured around 80% of the 220 hectares needed to build the factory.
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By GlobalDataThe government reportedly had offered up to 146 crowns per square metre for the land, but officials said several people had demanded as much as 350 crowns per square metre.
Rusko said he did not have the legal means to pay more for the land than the price set by expert estimates, Reuters said – he added the government would strip the existing owners of their land if they continued to refuse to sell their property.
“We are determined to do everything so that this investment stays in Slovakia,” Rusko reportedly said.
Reuters noted that expropriation would take several months and such a delay would give Kia the right to claim damages.
Rusko reportedly said Slovakia could face fines if it caused delays in the Kia project as the company could initiate international arbitration procedures against the country.
According to Reuters, the Kia plant is not the only project to be complicated by land problems – US home appliance maker Whirlpool said in May it might need to abandon the planned expansion of its Slovak production facilities because of problems with purchase of land.
