City of Smederevo terminates agreement with Comico Oil - New competition for land in industrial zone in the pipeline

Comico Oil failed to make a payment to the account of the city of Smederevo for the lease of land for the construction of a refinery, and for this reason the agreement with this company was terminated on Tuesday, Smederevo Mayor Jasna Avramovic stated on Tuesday.

“There should be no more delays,” she said at a press conference, stressing that Smederevo is open for serious investors, and that Comico Oil was not serious, Tanjug reports.

As she put it, 113 hectares of land designed for the refinery construction is, as of Tuesday, in the ownership of the city of Smederevo and available to new investors. The mayor said that she will urge the Serbian government to change the plan for special use of the land so that it could be open for other investments as well, and not only for the refinery.

Representatives of Smederevo, a city located 46 kilometers east of Belgrade, and Comico Oil, the Serbian unit of U.S.-Dutch Comico Overseas, signed in March 2012 an agreement on 99-year lease of 113 hectares of land for the refinery construction.

The company failed to make on time a RSD 652 million (EUR 111 = RSD 1) payment breaching a 60-day deadline, and the Smederevo city authorities filed a lawsuit against Comico Oil for violation of the agreement. In December 2012, Comico Oil and Smederevo authorities agreed in court that the U.S.-Dutch consortium should pay the lease by February 4 or otherwise the agreement would be terminated.

The oil refinery is said to be worth RSD 250 million, and it should have provided jobs for at least 500 workers.