Orco boss lashes out at red tape in CEE

Red tape is frustrating new development in Central and Eastern Europe (CEE), according to Jean-Francois Ott, CEO of troubled CEE developer Orco Property Group. 'There's an anti-development climate in many cities. But the cities need developers. The construction industry will fall away without developers,' Ott told PropertyEU in an interview at Mipim.

Orco has just won an appeal case in Warsaw to get a residential zoning plan reinstated for Zlota 44, a EUR 160 mln residential project designed by Daniel Libeskind. The zoning plan and the building permit were cancelled following protests by a group of local residents. Ott: 'We already received the building permit in 2007 and had pre-sold 90 of the 255 apartments before the authorities cancelled the zoning plan. It has taken us six months to get the zoning plan reinstated and meanwhile construction had already begun and we are still paying interest.'

Earlier this year Orco failed again to get bondholders' approval on a plan to restructure its debt burden. Ott said that he was not considering any new proposals. 'We were not forced to reschedule the bond as it is not due for redemption for another three years. We thought it was the right thing to do, we are trying to restructure our debt position for the next 10 years.'

Operating in Central Europe since 1991, Orco is based in Luxembourg and listed on the Euronext exchange in Paris and on the Prague, Warsaw and Budapest stock exchanges. The Paris-based company has been under creditor protection since March 2009.