Bypass a priority - Serbia settle debts to Fiat, infrastructure projects lag behind

Serbian Government settled all financial obligations which it had towards Fiat Cars Serbia, eKapija finds out, However, infrastructure projects are running late. Among the contracted obligations Serbia has to Fiat are the bypass around Kragujevac, a road which would connect Kragujevac-based factory with Corridor 10 and modernization of the Lapovo-Kraljevo railroad.

- The Government of Serbia has fulfilled all financial obligations incurred by Fiat on time and according to the plan. The only delay refers to infrastructure projects which we hope to be finished soon. The priority is to address the issue of a bypass to make transport faster and easier. Every day, the FAS factory produces hundreds of trucks with cars manufactured in the factory and in the upcoming period it is planned to significantly increase the production output and hence transport - Diego Velini, Corporate Affairs and Business Development Manager in F.iat Cars Serbia says for eKapija.

The issue of bypass around Kragujevac is insecure. It is not known whether in the final version it will be built from the north or south side of the city, and such a decision would, as eKapija finds out in the city administration, should be adopted by the end of the month.

Namely, although the construction of the South bypass is one of the requirements of Annex to the contract with Fiat, the City of Kragujevac has taken the initiative to build North bypass of 17km, which, as they say, would be a solution of the overall transport through the city and would at the same time meet the needs of Fiat Cars Serbia.

- Fiat was introduced to Northern bypass and we are currently negotiating. They are satisfied with the solution, but they are waiting for approval from Torino, and by the end of this month it should be defined whether it will be built in North or South bypass. After that, details regarding the terms of deadline for works will be known -Nebojsa Zdravkovic, Deputy Mayor of Kragujevac says for eKapija.

Major part of the Southern bypass, which should have been completed by the end of 2014, has already been built. A tunnel that would connect part of the bypass and road loop with gates of Fiat Cars Serbia is missing. The state should set aside some EUR 20 mil for its construction However, this solution, because of the position that a plant has, would be more convenient for Fiat.

- Trains pass the factory and the South bypass would facilitate not only transport of Fiat cars but also lives of 80,000 people living at the right bank of the Lepenica river – Velini explains.

In the meantime, until a decision on the destiny of the bypass is made, the city is working on a preliminary solution of the expansion of Tankosic street at Silos. The works total some EUR 2 mil, and the Department of Regional Development and Local Self-governance set the funds aside.

- Our proposal is that in one part of the street semaphore signalization is installed. This transient solution would enable Fiat, along with six roads and three bridges that the city of Kragujevac and the Ministry of Regional Development and Local Self-governance made, to cover its logistical flows – Zdravkovic explains.

Questionable section

The most public controversy was caused by the issue of Kragujevac-Batocina road which should connect Fiat's factory with Corridor 10 i.e. with the Belgrade- Nis highway. In 2008, when the contract with Fiat was signed, the above-mentioned road became the responsibility of the Government of Serbia, and it became the focus of the public, neither more nor less, because the section passing through Kragujevac was declared unsafe.

- According to announcements from Batocina municipality, the opening of the Kragujevac - Batocina road is expected in September this year – Corporate Affairs and Business Development Manager of FAS says for eKapija.

Permit, as Diego Velini explains, was obtained in mid-April after two and a half years of waiting. Given the fact that the Ministry of Transport declared unsafe the section passing through Kragujevac, their further decision on the matter the next steps depend on is expected.

- If the resource ministry declares this section safe, its legalization and further works will follow. There are also more demanding parts of the road on which work have not yet begun, but we expect significant progress to be made by the end of the year – Velini said.

We were unable to get information at the Ministry of Regional Development, on when a final decision on the safety of this part of the road is expected and according to earlier announcements this section should have been opened by the end of 2012.

Burden on railways

Fiat is optimistic that all problems related to infrastructure may soon be solved so that export would function smoothly. Delays, as they say, significantly influence the increased use of rail transport.

- We transport a large number of the vehicles produced in FAS by rail, even more than planned. Unfortunately, rail transport is not as flexible as road so we encounter a variety of troublespots we currently successfully overcome.

Therefore, Velini says, it is in their interest to complete modernization of the Kraljevo Lapovo railroad of 26 km as soon as possible, which is also one of the contractual obligations of Serbia.

As they told us in the city administration of Kragujevac, proper signalization, i.e. automatization of four railway crossings to Lapovo is to be done.

For a good image of Serbia…

Fiat is having troubles with gas supply which they have solved with some temporary measures and solutions. Apart from that, they are waiting for remediation of land that has to be done so that Fiat Cars Serbia could continue with the planned expansion of office space within the factory.

Velini says this delay, however, does not have significant effect on the Italian company business in Serbia, but that the agreements must be respected so that the image of Serbia in the eyes of foreign investors would look better.

- In this process, all of us must do their best for the common objective and mutual benefit, and that is that production runs smoothly – Velini says.

Ivana Bezarevic