ZAGREB, Feb 13 (Hina) - The Croatian government expects the Russian company Mechel to change the text of the contract on the purchase of Sisak Ironworks and obtain the necessary guarantees so that the government, too, could fulfil its
contractual obligations and the contract could take effect.
ZAGREB, Feb 13 (Hina) - The Croatian government expects the Russian
company Mechel to change the text of the contract on the purchase of
Sisak Ironworks and obtain the necessary guarantees so that the
government, too, could fulfil its contractual obligations and the
contract could take effect. #L#
The Russian side on Wednesday agreed to changing the contract and
providing guarantees, Economy Minister Ljubo Jurcic said at a
government session on Thursday.
Mechel purchased Sisak Ironworks in line with a contract signed
between the iron plant and the Conares Balkan company, registered
in Croatia.
According to the contract, possible disputes are settled in line
with English and Welsh laws before a court in Paris. The contract is
written in the English language.
Jurcic thus requested the Russian side to change the text of the
contract with regard to the legislation and language, and obtain
bank guarantees.
Since the signed contract envisages some commitments by the
Croatian government which, said Prime Minister Ivica Racan, the
government was prepared to respect -- give guarantees and cancel
mortgage -- the Russian partner should also do its part.
The government insists on a realistic guarantee which secures full
employment of the plant's workers in the next five years. If the
Russian partner chooses to abandon the project, employees should be
guaranteed compensation in the amount of six months' worth of their
salaries.
The government demands that the two requests be fulfilled, it is
satisfied that the Russian partner is ready to do so, and has given
Mechel time until the end of the month, so that the government could
then fulfil its commitments, Racan said.
Decisions which the government should make are removing mortgage
from the plant's immovable assets and agreeing to pay a lump sum tax
on the immovables in the amount of EUR500.
The Russian partner should also provide bank guarantees totalling
six million euros, which is the amount of six monthly salaries for
the plant's 1,700 workers.
Jurcic said that until the contract's going into force Mechel could
begin production because the contract had been signed.
Until the contract becomes effective, the government will assume
all obligations towards the ironworks, which means that the
government will also have the obligation to pay the workers'
salaries for February, Jurcic explained.
The government stands behind these obligations, but due to the
latest events, it is possible that salaries might be a little late,
said the minister.
(hina) lml sb