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The Government of the Republic of Serbia

In the service of citizens

Serbia to benefit in long term from Russia’s offer in energy sector

Belgrade, 17 January 2008

Serbian Minister of Infrastructure Velimir Ilic said that the working group of the Serbian government for negotiations on cooperation in the energy sector with Russia should today bring the final decision on accepting the Russian offer of constructing a gas pipeline through Serbia and for the Serbian oil industry NIS.

Velimir Ilic at today's press conference

Ilic told a press conference that the international gas corridor which should go through Serbia is of extraordinary importance since the country would make significant profits from transit of gas, according to some estimates, in the amount of €200 million annually.

He explained that it is also very important that according to the Russian project, if the gas pipeline goes through Serbia, the biggest gas turbine power station in this part of Europe will be built near Nis, which would supply Greece and Turkey with electricity.

According to Ilic, in non-seasonal gas expenditure the power station mentioned would have large production levels so electricity would be exported to tourism regions.

Ilic said that the Russian offer is more favourable than others, because even though in the beginning it offers smaller funds, it gives Serbia long term investments and integration in the entire Gazprom system which also includes production and transport of electricity. Speaking on privatisation of Jat Airways, the Minister of Infrastructure announced that an international tender for the sale of this airliner will be announced soon and noted that Russia cannot be exempted from that tender regardless of recommendations from the EU.

No one can be exempted from an international tender, Ilic repeated and recalled that the EU recommended that the air system in Europe should function at European level so the company should be privatised by an EU country.

According to Ilic, the Russian offer is better for Serbia than other ones as it offers development of Jat Airways and possibility of growing into a big air company with significant number of new planes and new jobs.

He also said there is a dilemma of re-opening an international tender for construction of cargo centre at Belgrade airport since the previous one failed or to accept the inter-state agreement that Russians offered – that the two countries should jointly build a cargo centre.

Serbia would give land and infrastructure while Russia would finance the project that would be regulated in the inter-state agreement, the Minister said and described the Russian offer as quality and favourable.