Slovak government at loggerheads with owners of land for Korean car plant

For more than a year now Slovak authorities have been trying to acquire some 50 hectares of land on which the Korean carmaker Hyundai/Kia will build a factory. But small landowners are unhappy with the offered price and have refused to sell. They're now threatening to take the government to the Constitutional Court.

This is the sound of cranes working hard to build the production halls of the Korean car maker Hyundai/Kia in the town of Zilina in Northern Slovakia. The 1 billion euro investment has been hailed as a great achievement by the Slovak government in its fight to eliminate high unemployment and regional disparities. The company will create about 3,000 new jobs.

But such figures have not impressed 400 landowners of some 50 hectares who refused to give away their plots because the offered price of some 3 euros per square meter was regarded as too small. The contract between Kia and the Slovak government stipulates that the Slovak part acquires the land which is then offered to the Korean company for free. For more than a year officials in Bratislava have been unsuccessfully trying to persuade the landowners to sell. Finally, in April this year, they agreed to pay the price required by landowners which is 9.5 euros per square meter. But this decision is far from calming down the situation.

"We were misled. We sold for a lower price because they told us that it wouldn't change and that the land would be expropriated otherwise. They said that Kia wanted to leave Zilina if we don't sell the land and then everybody will blame us for the failure of getting jobs in this area."

This was Jozef Dugel a member of a petition committee of landowners who agreed to sell their plots in an earlier phase at a price 40 percent lower than the one offered by the government now. These landowners have asked the authorities to pay them the difference otherwise they will complain against the government to the Constitutional Court for breaching the right to own property. Those landowners who haven't sold yet and are supposed to get the higher price threaten the government they are not going to sell until the others are compensated. Jan Slota, the nationalist Mayor of Zilina, tries to find a solution on his own.

"I told the government to give me full power and I could solve the land problems in two days. We have simply wasted time arguing with the landowners. We should pay everybody the same price of 9.5 euros per square meter. The total difference between prices reaches 650,000 euros which is little in comparison to the whole sum invested in buying these plots."

Mr Slota adds that Kia's management has grown impatient with the delay caused by the land acquisition. The company hopes to launch production in early 2007. Asked to comment on the problems with land acquisition, Chang-Kyun-Han, the Vice President of Kia Motors Slovakia, gave a diplomatic answer.

"If you visit our site you can see that we have already started the construction. As for the problem with the land this has to be solved by the Slovak government. Kia cannot solve this problem. We trust the government and hope that it will be solved soon."

Meanwhile angry landowners prepare to hire the law firm of an independent MP, and former lawyer of former prime minister Vladimir Meciar, to represent them in court.