Serbian authorities give a land plot worth 6.25 million EUR to Germany’s MTU

The Serbian authorities will give a land plot, worth EUR 6.25 million in Nova Pazova, to the German investor MTU for free. The land plot will be used for the construction of a facility for the maintenance and repair of aircraft engines and the accompanying services.

This will be realized through a contract on the alienation of building land between the Property Directorate of the Republic of Serbia, MTU Maintenance, a company registered in Serbia, and its parent company, MTU Aero Engines from Germany.

As said in the Commission’s decision, the total value of the donated land is EUR 6,250,683, according to an estimate by the Tax Administration. The total surface of the two land plots is just over 25 hectares.

Under the draft agreement, MTU undertakes to build the facility at its own expense, that is, to make the initial investment in capital assets of no less than EUR 100,900,000 by the end of 2025 and to permanently employ at least 440 workers in the period between 2021 and 2027.

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MTU Maintenance also undertakes to cover at least 25% of the justifiable costs from its own funds or other funds not entailing state aid, whereby justifiable investment costs are investments in new equipment.

The business plan entails the construction of capacities for MRO (maintenance, repair and operations) of around 22,000 square meters.

The investment project entails an investment of EUR 4.8 million in the infrastructural equipping of land, EUR 45.9 million is reserved for the design and construction of production capacities, and EUR 50.2 million is the value of the planned investment in new equipment.

In case MTU fails to meet the contractual obligations, the state can ask the company to refund the counter value of the amount of EUR 6.25 million, which is the market value of the land plots.

(Nova Ekonomija, 15.10.2019)



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