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The Government of the Republic of Serbia

In the service of citizens

RSD 10bn package of incentives for construction industry

Belgrade, 9 September 2010

Minister of Environment and Spatial Planning Oliver Dulic stated that the package of incentives for the construction industry, worth around RSD 10 billion, which the government adopted today, will be used to finance 117 projects on the territory of Vojvodina and Belgrade, while projects for central Serbia will be approved within a few days.

From left: Bojan Pajtic, Oliver Dulic and Aleksandar Bijelic

At a press conference following the government session, Dulic specified that Vojvodina has been approved financing for 111 projects totalling around RSD 6 billion, while Belgrade received a little over RSD 4 billion for the realisation of ten projects.

The Minister explained that 80% of the funds will be secured from bank loans, 10% from local self-governments and the remainder will be provided by the ordering party, adding that the repayment period is five years.

He recalled that among the more significant projects is the completion of the bridge on the Sava near Obrenovac, the city stadium in Nis, several schools, residential and cultural facilities, a dam as a barrier against floods and several facilities intended for education, the judiciary and interior affairs.

Contractors will be engaged through public tenders and the final selection will be carried out by direct bidding, the Minister explained, voicing his hope that the cost of the construction will be 30% lower than the initial price.

It is the government’s intention to stimulate demand for residential and other facilities and in this way aid the construction industry, which has suffered a 50% fallback because of the crisis, he noted.

Speaking about yesterday’s warning strike in the construction industry, he stressed that the government has no outstanding debts towards this sector, recalling that during the first year of its mandate it settled over €300 million in debt to the road construction sector.

There are debts at a local level because local self-governments started construction projects which they can no longer finance, being affected by the global crisis, and this is a problem that remains to be resolved, he concluded.

President of the Executive Council of Vojvodina Bojan Pajtic affirmed that by the end of 2011 all projects in the province, financed from these incentives, will have been completed.

Pajtic noted that Vojvodina received RSD 48 billion for 1,200 projects through the Capital Investment Fund, while RSD 6 billion will be earmarked from the province’s budget for projects approved today and co-financed by the state.

Assistant to Belgrade Mayor Aleksandar Bijelic explained that Belgrade is currently the largest construction site in Serbia and probably in the region, as well.

Among the projects in Belgrade, which the government approved today, are the construction of the bridge in Obrenovac, renovation of the Sixth Belgrade Grammar School, the First School of Economics and primary school Jelena Cetkovic, and the construction of the railway to the new harbour in Smederevo, Bijelic declared.