Minister: Plan B for steel mill in works

BELGRADE Serbian Finance and Economy Mladjan Dinkic said the government was preparing a plan B for Zelezara Smederevo steel mill. He explained that the plan B was being prepared in case Russia's UralVagonZavod did not submit a bid and added that the government was analyzing the cost of starting up production on its own. Minister: Plan B for steel mill in works "The Russians asked for a two-month extension on the tender, but we are also working on plan B - we cannot be sure what will happen, since the tender has been extended before. We are analyzing the cost of the government starting up production, if the Russians fail to show, provided it is not too expensive," Dinkic said late Thursday, responding to questions from members of the parliament. Earlier on Thursday Aleksandar Ljubic, a state secretary in the Finance and Economy Minisrty said the tender for a strategic partner for the steel mill had been extended by two months, because potential buyer UralVagonZavod was unable to complete its analysis by December 26. He said the talks with the company's representatives were more than fair, but detailed negotiations could not start until a complete analysis of the state of the steel mill and a business plan were in place. UralVagonZavod was the sole applicant for the tender for a strategic partner, and a ten-member expert delegation of the Chermet Institute of Iron and Steel Industry tasked with inspecting the state of the Serbian steelworks on behalf of the Russian company, and with collecting information concerning the legal and financial side of the business, visited Zelezara Smederevo at the beginning of December. Noting that the steel mill had more than 5,000 employees, Ljubic said the government and his ministry would do everything to find a solid strategic partner. The Serbian government bought back Zelezara Smederevo from U.S. Steel in January this year for USD 1, when the company decided to withdraw due to losses and falling prices of steel on the global market. In March 2003, the steelworks, then called Sartid, was sold to U.S. Steel for USD 23mn. For the past decade, the steel mill was responsible for up to 13 percent of Serbia's total exports. Mladjan Dinkic (Beta, file) Tanjug

Minister: Plan B for steel mill in works

"The Russians asked for a two-month extension on the tender, but we are also working on plan B - we cannot be sure what will happen, since the tender has been extended before. We are analyzing the cost of the government starting up production, if the Russians fail to show, provided it is not too expensive," Dinkić said late Thursday, responding to questions from members of the parliament.

Earlier on Thursday Aleksandar Ljubić, a state secretary in the Finance and Economy Minisrty said the tender for a strategic partner for the steel mill had been extended by two months, because potential buyer UralVagonZavod was unable to complete its analysis by December 26.

He said the talks with the company's representatives were more than fair, but detailed negotiations could not start until a complete analysis of the state of the steel mill and a business plan were in place.

UralVagonZavod was the sole applicant for the tender for a strategic partner, and a ten-member expert delegation of the Chermet Institute of Iron and Steel Industry tasked with inspecting the state of the Serbian steelworks on behalf of the Russian company, and with collecting information concerning the legal and financial side of the business, visited Železara Smederevo at the beginning of December.

Noting that the steel mill had more than 5,000 employees, Ljubić said the government and his ministry would do everything to find a solid strategic partner.

The Serbian government bought back Železara Smederevo from U.S. Steel in January this year for USD 1, when the company decided to withdraw due to losses and falling prices of steel on the global market.

In March 2003, the steelworks, then called Sartid, was sold to U.S. Steel for USD 23mn.

For the past decade, the steel mill was responsible for up to 13 percent of Serbia's total exports.