Published on Friday, 03 February 2012 07:31
It would be good if the Serbian government found a strategic partner for the Smederevo still mill, and if it does not happen, it should consider a 2012 budget review, member of the Fiscal Council Vladimir Vuckovic said on Thursday.
"It is not known how much money is needed for the Smederevo steelworks. If the funds are modest, it is possible to redistribute the budget resources to gain them," Vuckovic told reporters at the Serbian Chamber of Commerce.
If the government takes over another large company with losses, like the railways, the costs will be huge, and it is not certain how the budget would be used to cover them.
This year's budget is pretty stretched, because the expenditure is set, while the revenue is uncertain, he explained.
"If we consider that, then it is clear the expenditure should not be raised," he noted.
The government bought the mill from U.S. Steel on January 31 for the price of USD 1 after U.S. Steel decided to pull out of Serbia because of poor results.
Prime Minister Mirko Cvetkovic pointed out after the sale contract was signed the government had no intention of running the mill, but would do everything to find a strategic partner for it.
He stressed there would be no added budget deficit and that funds would be acquired either through bank loans or a budget review.
He also added that the costs would be lower than if the plant had stopped working, leaving over 5,000 people jobless.
Source Emg