Serbia’s new government has rescheduled payments to the Italian carmaker Fiat for their joint car-plant venture in the central city of Kragujevac, Reuters reports.
Serbia owns 33% of a EUR1bn joint venture with Fiat to produce the Fiat 500l compact in Kragujevac, but once the new government took over in July it discovered that the previous cash-strapped government had not stumped up the investment it told Fiat it would, such as completing the construction of a four-lane road linking Kragujevac in 2012 and the nearby E75 pan-European highway.
Serbia has agreed to pay EUR50m, or 55% of the 90m it owes Fiat this year, once it has revised the 2012 budget in September. The rest will be paid in 2013. “The problem is that the previous government failed to include payments to Fiat in the 2012 budget and now we will pay a part and reschedule the remaining EUR40m to 2013,” a government spokesman said on Thursday.
Fiat chief executive Sergio Marchionne was expected to visit Serbia next week for further talks, he said.
The first cars were produced in July and the plant is expected to employ 2,400 people and produce up to 200,000 cars annually.
Source Balkans
