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Kosovo building boom looks like a mirage A reconstruction bonanza in Kosovo and Serbia looks unlikely despite last week's fragile peace deal.

ANALYSIS

News last Friday that a peace deal had been struck between Nato and the Yugoslav president Slobodan Milosevic raised hopes in some quarters of a reconstruction boom in war ravaged Serbia and the surrounding region.

There were strong expectations that British construction firms would be scrambling to pick up reconstruction work as soon as the dust on the conflict settled.

The feeling is that as British construction firms were beaten to post Gulf War reconstruction work by US and Continental firms, they want to make sure they do not miss out this time around.

But within days of the peace announcement, detailed negotiations between Nato and the Yugoslavians are foundering. It is becoming clear that the reconstruction process could take longer than expected to get off the ground.

Construction industry bosses are sanguine about reconstruction prospects in the current climate. Ove Arup deputy chairman, Nigel Thompson, denies that they are circling like vultures to pounce on lucrative reconstruction work.

Thompson is tipped to chair a Department of Trade & Industry task force to co-ordinate British efforts to win reconstruction work. He dismisses newspaper reports that the cost of rebuilding Kosovo and the surrounding region could be £20bn-£100bn as 'exaggerated hype'.

'There needs to be a bit of realism. People think there's going to be a bonanza but the reconstruction will be fraught with problems. I don't think anyone will be winning lucrative contracts,' he says.

Rather than queuing for contracts Thompson believes many British companies will be cautious.

There are still uncertainties about the extent to which Serb forces will withdraw from Kosovo and how companies from Nato countries will be received. There are also likely to be long lasting security problems from mines and other unexploded ordnance left behind by the conflict.

Bidding for reconstruction work in Kosovo, Serbia and the surrounding countries will be expensive and risky. To succeed, British companies will have to partner with local firms who have the necessary knowledge of the political and geographical landscape.

Contractors, consultants and project managers will also have to spread the cost of bidding by forming collaborative alliances and consortia.

From their experience in Bosnia some British companies claim that even then it will be hard to win work. Three and a half years after the United- Nations backed Dayton Agreement ended the war in Bosnia there are still thousands of military engineers in the country.

More importantly, consultants claim that only £1.1bn of the £3.6bn of aid pledged by the international community has materialised.

As yet no funding mechanism is in place for the reconstruction effort in Kosovo and Serbia. Until there is, British construction companies will remain sceptical about the opportunities on offer.

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