Business News

Govt Announces Launch of Investments to Help Builders

Ljubljana, 13 July (STA) - A meeting on Tuesday featuring representatives of the government, construction companies and banks ended with a promise that the government would provide short-term aid to Slovenia's troubled construction sector primarily through the launch of certain investments. A special bank loans scheme for builders was not discussed.

Economy Ministry State Secretary and candidate for minister Darja Radic explained after the meeting, which also featured PM Borut Pahor, that all stakeholders would have to do their homework.

Speaking of a construction sector bubble "which is the result of excessive expansion in the past four years", Radic said that "certain companies will probably go bankrupt". Today's talks focused on future development that will include the healthy core of the sector.

The government plans to help the builders in the short-term, especially with the launch of investments in Slovenia, while in the future, construction companies will have to look for deals also on markets abroad.

The government will also take on certain legislative obstacles that the builders have been pointing to. The things discussed today include undeclared work and possible changes to public procurement procedures.

Radic also mentioned obstacles to better performance abroad, which pertain to banking approaches as well as to the attitude of the government and the companies themselves.

The likely future minister also announced that a special working group would be established at the Economy Ministry dedicated to the development of the construction sector. The group will include representatives from several ministries as well as from the SID export and development bank.

Moreover, a special conference will be organised on the topic of direct investments and international opportunities, while progress will be examined by the partners that met today at regular meetings every three months.

Branko Selak of the Chamber of Commerce and Industry acknowledged today that the incumbent government had already done a lot for the sector and its prospects abroad, also with state visits to Arab countries. However the job is not done, he added.

"We are aware in the construction sector that those wishing to survive will have to restructure and look for bread abroad," Selak concluded.

The head of the country's biggest construction company, SCT, Ivan Zidar was upbeat before today's talks, saying he was happy that the search for solutions was beginning.

He announced that the SCT would also involve other Slovenian construction companies in the EUR 1bn worth of road construction deals it is taking on in Libya. "We will form a consortium," he announced.

Primorje boss Dusan Crnigoj painted a bleaker picture, saying that while his company was able to pay its bills for now, the situation was deteriorating. He feels that state investments are progressing too slow.

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