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The Government of the Republic of Serbia

In the service of citizens

Ministry of Economy and Regional Development in past 100 days

Belgrade, 4 September 2007

Serbian Minister of Economy and Regional Development Mladjan Dinkic said today that the privatisation process and restructuring of socially owned companies has been accelerated, and pointed to the fact that this is one of the conditions for increasing productivity.

Mladjan Dinkic

Speaking on the first 100 days of work by the Ministry of Economy and Regional Development, Dinkic said that the tender for the privatisation advisor for Jat Airways is complete and on September 6 the Serbian government should confirm the decision of the tender commission that Rothschild is the top bidder at the tender.

He said that two bids were submitted, but Rothschild, which was declared to be a leading company in this area in the previous year, made the best offer.

He said that by the end of the November an auction will be held for sale of the Hotel Continental and the Geneks complex in Belgrade, while during spring Geneks hotels on the Kopaonik will also be up for sale.

According to Dinkic, Belgrade needs to improve its hotel accommodation and quality, therefore it is also expected that the Jat hotel in Slavija will also be auctioned.

The Minister stated that it is planned that rehabilitation centres in Serbia will also be privatised, and this process will start with the privatisation of Rehabilitation Centre Merkur in Vrnjacka Banja and the centre in Banja Koviljaca.

Major European investors are interested in investing in the area of banking tourism, and privatisation will be oblige new owners to reserve a part of their accommodation for the Ministry of Health and rehabilitation of insurance holders from Serbia, explained Dinkic.

He stressed that for the first time this year Serbia expects more than $500 million in tourism proceeds, and recalled that master plans for development of tourism on mountain resorts Stara Planina, Palic, Vlasina and Tara are complete.

According to Dinkic, plans for tourism development in Stara Planina and Palica, for which funds worth €500 million are required, will be presented to potential investors at the tourism fair to be held in Munich next month.

Dinkic expressed the expectation that Serbia will attract private investors and works will begin in next spring. He also said that during the next week his ministry will present the Serbian government a bill on amendments to the Privatisation Law, according to which privatisation of all socially owned companies will be concluded by the end of next year.

He explained that the law will specify that in case of termination of contract of sale signed with the top bidder, negotiations for sale will be transferred to the second ranked bidder, so that the situation demanding a new tender, as in the case of RTB Bor, does not arise.

Dinkic said that the tender for sale of the Kragujevac factory Zastava Motor Works will be announced in December. He confirmed that the tender for sale of Zastava Trucks is under preparation, and the aim is to find a good strategic partner for both companies by the end of 2008.

According to Dinkic, until now at least five companies have shown interest in Zastava, among which are Ford, General Motors, Fiat and the Indian company Tata, as well as a few Chinese companies.

Serbia is ready to offer better conditions than in any other country in the region to investors who wish to enter the automobile industry, stressed the Minister and added that negotiations are underway with Czech company Tatra for sale of Priboj automobile factory.

Jasna Matic

We offered them specially favourable conditions for participation in privatisation since we wish the truck industry in Serbia to survive, stressed Dinkic, and added that soon a new factory for producing lorries for transporting cars, and the investor is a French company.

Serbian State Secretary for international economic relations at the Ministry of Economy and Regional Development Jasna Matic informed that she talked yesterday with representatives of the Russian-Chinese company AMS which is interested in buying Zastava Trucks and a few other smaller factories from Zastava Group.

Negotiations with company representatives from Beijing and Uljanovsk will be continued and there is a huge possibility that begin production of trucks in Serbia which will be placed in the European and regional market, said Matic.