Following months of negotiations and postponed deadlines, Hyundai appears to have decided to build a new $1.9 billion (45 billion Kč/1.6 billion euro) automotive plant in the Nošovice Industrial Park in north Moravia.

Neither the Hyundai officials nor Czech government officials were willing to openly confirm the deal when confronted with questions from reporters Jan. 22. Still, Industry and Trade Minister Milan Urban said the government and Hyundai were close to signing an agreement. Urban said a deal could be reached by the end of this month.

"I'm very optimistic, and I believe that by the end of January an agreement on the fundamental principles will be reached," he said.

For their part, Czech financial markets have perceived Hyundai's arrival as almost certain. Expectations of the country receiving the investment helped push the crown to a new all-time high of 28.56 Kč against the euro Jan. 20, said David Marek, chief economist at Patria Finance.

Turkish news server www.cihannews.com reported Jan. 21 that Hyundai has already decided to build the plant in the Czech Republic. Hyundai was also considering Turkey and Poland for the investment. Turkey has been ruled out, but, technically speaking, Poland is still under consideration.

According to the report, a Hyundai manager recently notified Turkish Industry Minister Ali Coskun that Hyundai has chosen the Czech Republic. The server reported that the Czech government had offered Hyundai attractive tax incentives that Turkey cannot match. Urban, however, has denied the report, saying that no incentives have been approved.

Incentives are certainly on the table, however. Hanuš Krejčí, the Hyundai project coordinator at state inbound investment agency CzechInvest, has said that investment incentives for Hyundai in the form of tax relief and other subsidies could reach as much as 3.5 billion Kč.

During Hyundai's current visit, the government intends to guarantee that administrative proceedings will not delay construction of the plant, said Pavel Drobil, deputy governor of north Moravia.

Drobil said the government should reach an agreement with Hyundai soon. The plant would produce 300,000 cars annually by as early as 2008.

If built here, the new facility would directly create 3,000 jobs. Indirectly, it would create 10,000 new jobs for Hyundai's local suppliers, Krejčí said. He also estimated that Hyundai's car production would increase Czech gross domestic product by 1.5 percent.