SEOUL (Reuters) - South Korea's automaker Kia Motors expects the Slovak government to solve land disputes that are delaying construction of its new one billion euro ($1.23 billion) plant, a Kia source told Reuters on Friday.
Slovakia, which beat Poland for the project, has said it would miss the end-of-August deadline for preparing the site for actual construction work as several landowners demand higher prices than those offered by the state.
The source at Kia said on Friday the car producer was confident the government would break the stalemate.
"Some landowners there might ask for higher prices, and the Slovak government will work on it. I expect things to be solved," the source said.
The land disputes, which are threatening to delay the project by several months, have caused concerns that helped push the Slovak crown to three-month lows on Friday.
Slovak Economy Minister Pavol Rusko said on Thursday he might offer Kia a different location if the land deadlock is not resolved. But the Kia source said moving the site was not an option.
"We have already begun groundworks on the (original) site, and it does not make sense to consider a new site," the source said.
Kia said earlier this month it expected the site to be ready for handover by the end of September given a small portion of the land still needs to be purchased by the state. It also has said a compensation claim against Slovakia was not considered.
The state has bought about 80 percent of the land needed for Kia and its parts supplier Hyundai Mobis so far. Hyundai Mobis plans to invest $160 million (131 million euro) in its plant near Kia assembly lines. The government will discuss how to solve the land problem on Wednesday. The economy ministry has said the state has two options -- expropriate the land or meet the owners' demands for a higher price.
But expropriation of the land would significantly delay the project as it would take three to nine months to complete, while the other option could reduce the incentive package for Kia and spark protests from owners who had already sold their land.