Belgrade daily Danas writes today that Italian carmaker Fiat is once against postponing its move into the Zastava factory in Kragujevac, reports the B92 news agency.

Despite announcements that the annex to the contract between Fiat and the Serbian government for forming a joint company would be signed on Tuesday, the document will not verified, since the Italians have still not given their business plan for the new company, according to the daily’s sources.

“We really do not know what is going on anymore,” Zastava administration told Danas. The Economy Ministry said that the annex is ready, but that the Italian side must wrap up “some other, final formalities” in order to begin work.

Sources from the ministry stated that Fiat must finish up its business plan, which will, among other things, state how many cars will be produced yearly in the Kragujevac, central Serbia-based plant, which class they will be and on what foreign markets they will be sold. “The annex to the contract with Fiat will be signed in the coming weeks. There are no complications or problems in the business arrangement with the Italians,” sources from the ministry said. They stated that Fiat will "soon pay the first EUR 100mn" of planned investments. The sources also said that in the coming year, "there would be new equipment installed, new factories built", while the production of the first new model in the Kragujevac factory is being prepared, which is expected to start in 2011.

Meanwhile, Zastava's management and unions are in the dark over the reasons of the latest delay. Representatives of the unions say they only learned over the weekend that the signing would be postponed indefinitely. But they believe that rather than the missing business plan, the real reason for the postponement is that the Italians "either do not have or do not want to pay" the 100 million euros of the founding capital for the company.

Kragujevac city officials were also unpleasantly surprised, since they had to cancel a previously planned trip to New York in order to be present at the signing ceremony that was not to be. “We were also told that the signing of the contract with Fiat was moved because of business plans for the new company, but money is likely the problem. I do not believe that the new postponement of the signing of the annex to the contract will jeopardize the deal with the Italians, but it is certain it will cause some damage, marketing-wise, a Kragujevac city official told the newspaper. A memorandum of understanding between the city of Kragujevac and Fiat was signed in early May of 2008.

Report courtesy of B92