Italian automobile giant Fiat is not satisfied with joint venture with the Serbian government aimed at producing 200,000 automobiles annually for European markets, Serbian media reported on Tuesday, AKI – Adnkronos International said.
According to the deal, Fiat took over Serbian automobile factory Zastava in central city of Kragujevac, south of Belgrade, in 2008. The plant had been heavily damaged in a 1999 NATO bombing. A joint venture company, Fiat Automobiles Serbia (FAS) was founded, providing for Fiat’s investment of 700 million euros. The Serbian government, on the other hand, should have invested 200 million euros and provided infrastructure and access roads.
The production of the new Fiat 500L model started last month, but the government has failed to pay a 60-million-euro instalment and the roads haven’t been completed, press reports said. “I was aware of these problems, because I’m in daily contact with Fiat,” Kragujevac mayor Verko Stevanovic told reporters. ”I don’t know why the previous government didn’t fulfill its obligations, but the fact is that Fiat is right.”
The agreement, according to which Fiat owns 67 per cent of FAS and the Serbian government 33 per cent, was signed by pro-European government of former Serbian president Borist Tadic who lost presidential and parliamentary elections in May.
Stevanovic is a member of a new governing coalition, headed by president Tomislav Nikolic, former ultranationalist turned pro-European. It was now up to the new government to pick up from where the previous one had failed, Stevanovic said.
Source Balkans
