Serbia on Tuesday will announce who has won the bid to manage the state-owned loss-maker Smederevo Steel – which the country has been trying without success to sell off.
Prime Minister Aleksandar Vucic said Serbia’s government would decide who won an important bid to manage a troubled steel mill on Tuesday.
“Privatisation advisors will deliver their decision, which will then be discussed by the Privatisation Agency commission. The government will then hold a session and deliver its decision, while the contract will be signed within three days,” Vucic declared on Monday.
Serbia invited bids for a managerial contract for the Smederevo Steel Mill after failing to reach a strategic partnership deal with the US-based form Esmark on February 17.
On March 7, it was announced that six companies had applied to run the mill. The names were not divulged but Esmark confirmed that it had applied for this bid as well, after the privatization talks failed.
The company also said its former partner, Slovak businessman Peter Kamaras, was running for the same post as a competitor.
Esmark filed a lawsuit against Kamaras at the US court on March 4, claiming he had sabotaged the talks with Serbia’s government on the privatization of the steel mill.
In the lawsuit, which BIRN has seen, Esmark seeks more than $100 million in damages, alleging that Kamaras convinced Serbian privatization officials to vote against the deal.
“Kamars knew his companies had been supplying Železara Smederevo Steelworks with sub-standard iron ore and other materials at above-market prices, and such pricing practices and deceit regarding the quality and content of the materials were not part of Esmark Europe’s plan to revitalize the Železara Smederevo Steelworks,” Esmark wrote in a press release.
BIRN failed to reach Kamaras for comment on the lawsuit and Esmark’s claims.
Serbia’s government has since said the dispute between Esmark and Kamaras does not disqualify either of them from bidding for the managerial contract.
“We will make a contract with the one offering the best conditions. Those are the people who worked together. Should I now arbitrate between them? I have no intention of interfering in that,” Prime Minister Vucic said on March 5.
The mill in Smederevo employs 5,400 people and owes millions of euros – about 260 million to the banks and 264 million to different suppliers.
The Serbian state has been subsidising the company to the tune of about 8.4 million euros a month.
Initially privatised in 2003, when it was sold to US Steel for $23 million US (about 17.5 million euro), the government bought it back for one dollar after US Steel withdrew from Serbia in 2012.
The government bought back the factory in the hope of maintaining production and preserving the jobs of the 5,400 employees. It has since tried to sell it several times, but without success.
Source; BalkanInsight
