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Czech loan of EUR 120m

07. May 2010.

The representatives of Serbia and Czech Republic signed the Protocol on Cooperation in the area of infrastructure today (May 4, 2010) in Belgrade, which will enable modernization and reconstruction of Niš-Dimitrovgrad railway section on Corridor 10.

- Czech Export Bank will grant the loan of EUR 120m to the Government of Serbia to use it for complete electrification of the railway - Serbian Minister of Economy and Regional Development Mlađan Dinkić said after he signed the Protocol with Czech Minister of Industry and Trade Vladimir Tosovsky.

According to his words, interest rate is about 2.5% on annual basis, repayment period is 10 years, with the grace period of one year, and Serbia has already provided a guarantee for that loan in this year's budget.

- Works will be carried out by the consortiums of Czech and Serbian companies - he said and pointed out that that project would employ leading companies from both countries, enable employment, as well as sale of domestic building materials.

Dinkić explained that, based on the Protocol, the negotiations between Serbian Ministry of Finance and Czech Export Bank should be finished, although the key terms had already been agreed.

He also added that the negotiations on the contractor agreement between Czech and Serbian consortiums of companies that would be carrying out the works on the railway should end as well.

- That will be coordinated by the Ministry of National Investment Plan and the Ministry of Infrastructure - he said.

He added that the Czechs, led by company Inekon, would have the share of minimum 51% and maximum 55% in the construction, while the rest of the works would be carried out by Serbian consortium of companies, but he was unable to specify the way in which the companies members of the domestic consortium would be selected.

- The works on the first section should commence before the end of this year, in the third or the fourth quarter, and they should reach their peak during the next year - he pointed out.

Dinkić reminded that railway section Niš-Dimitrovgrad was a "bottleneck" on Corridor 10, that is, the only section that had not been electrified. He added that, after the reconstruction, trains on that section would be able to travel at the speed of 120 km/h.

- Today's meeting was also the opportunity for us to discuss the possibility of Czech's new investments in Serbia in the area of industry - said Dinkić and added that the guest from Czech Republic was presented the possibilities for investments in the chemical industry and the production industry for the energy sector.

Serbian Minister of Economy pointed out that Tosovsky had conveyed the support of the Czech Republic to Serbia for joining the EU and offered assistance through exchange of experiences in the use of the EU's pre-accession funds.

Czech Minister of Industry and Trade Vladimir Tosovsky pointed out that the Protocol had raised the cooperation between the two countries to a higher level.

According to his words, he spoke to Serbian colleagues about the investment and business terms in Czech Republic.

According to the data provided by the Ministry of Economy and Regional Development of Serbia, foreign-trade deficit in the exchange of goods between Serbia and Czech Republic in 2009 exceeded EUR 121m.

Serbia exported EUR 68.9m worth of goods to Czech Republic in 2009, while Serbia's import from that country was worth EUR 190m.

Source: eKapija