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. Last Updated: 07/27/2016

Daewoo Close to Tatar Deal

Korean car making giant Daewoo and a consortium of CIS states are close to signing a $1. 6 billion deal for a car production line in Tatarstan, using a huge, half-completed Soviet-era auto plant.

An official with Daewoo in Tatarstan, who declined to be named, said in a telephone interview Friday that a deal on the factory which will produce 200, 000 cars a year is likely to be signed in November. "We don't see any major difficulty in closing the deal", said the official.

Ravil Zaripov, general director of YelAZ, the half-finished plant in the Tartar town Yelabuga, 800 kilometers east of Moscow, said Thursday according to Itar-Tass: "Problems which remained unresolved, have been finally settled at today's talks between the Daewoo managers and President of Tatarstan Mintimer Shaimiyev".

The Daewoo official said his company will contribute 50 percent of the total investment over three years, and Russia, Tatarstan, Belarus, Kazakhstan, Moldova, Tajikistan, Ukraine, Uzbekistan and Kyrgyzstan, the shareholders in the YelAZ-lnvest consortium, will cover the other half.

Russia's Deputy Prime Minister Alexander Shokhin, however, expressed doubts over the project on Thursday, saying tax privileges would be necessary to its viability, according to Interfax. He said the countries involved would not be able to "invest heavily", which the Daewoo official denied.

The Yelabuga automotive plant in Tatarstan, intended to be one of the world's biggest tractor factories, was started in 1984, but was left unfinished during the perestroika era.

The Daewoo official said that his company chose the plant because its infrastructure would suit the assembly line they plan to install there. The first car to be produced will be the South Korean designed Racer, in four to five years, he said.