Hyundai deal now likely at end of February, say Czech officials

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From a number of months now the South Korean car maker Hyundai has been considering opening a huge new plant in north Moravia; if it happens, it will transform the region's economy. A decision had been due at the end of December, but talks stalled. On Thursday a delegation from Hyundai completed a fresh round of negotiations in Prague, but still no contract has been signed. The minister of industry and trade, Milan Urban, said at a press briefing on Thursday morning that he believed a final deal would be announced at the end of next month.

Also there was Tomas Hruda, director of investment agency CzechInvest - I asked him why the talks were taking longer than originally envisaged.

"I don't really think they are taking longer than expected. The main focus is to make sure we make a correct contract, which is good for both parties and which reflects all the possible aspects of future implementation in the Czech Republic.

"So time of course is very important, but quality is much more important. And in the case of such a large investment this is quite a usual case."

What is the next step?

"Well, we will just continue the negotiations and we have to finalise the agreement. And of course this is the most time-consuming part of the whole process."

Photo: CTK
I understand now it's a question of details, including what language the contract will be in - will it be in Czech, will it be in English? - is there any chance do you think that the deal could fail at this point?

"I'm very optimistic but nothing is ever fixed until the final decision has been made. Even though we're all optimistic, there's always a risk that this might fail. Even though I don't expect this risk to be very high."

When will we know definitely and finally?

"Both parties are trying to reach a conclusion before the end of February, but if there are some outstanding issues then of course it might continue. As I said, the most important thing is to make sure that the contract is right for both parties."

Just to put this deal in context, how important is it to this country? Is it really going to be the biggest investment ever in the Czech Republic?

"Yes it is, and I think it's going to be very important. And I think the greatest significance is in the fact that it's going to be located in a region which has long term structural unemployment. We therefore believe that the impact on the region will be really positive. This particular region needs a very strong impulse and we believe that this might be the case."

The plant itself will employ around 3,000 people - how many more people in the region will also get 'knock-on' jobs, so to speak?

"We expect that the overall job creation should reach around 15,000 people."