The government said in a press release after today's session that the Economy Ministry decided against the subsidy after negotiations between the government, municipality, Slovenske železnice and Trigranit's subsidiary Emonika NS on reducing the scope of the project failed to end in agreement.

The government's press release says another reason the ministry opted against the subsidy was Trigranit's move from December 2013 to seek an annulment of the contract. Another reason is the lack of budget funds earmarked for FDI incentives.

The Emonika private-public development project, which would also include a shopping centre and offices, was valued at EUR 250m-300m.

The private developer, Trigranit, had been expecting nearly EUR 31m in government aid for foreign investments, but the requirements made by the government were unacceptable for it, the business daily Finance reported back in February.

This prompted the developer to seek an annulment of the contract. In addition to the standstill over the subsidy, it also complained of excessive bureaucracy in the project.

The project had already been facing a lengthy standstill regarding the terms with the public partners, including the Ljubljana Municipality and railway operator Slovenske železnice.

The dispute was related to the value of the private and public parts of the project, with Emonika NS demanding more money from the public partners due to what it said were rising costs of this section.

This request was denied by the public partners, which countered that Emonika was trying to reduce the exposure of the private partner to the project.

Responding to the February report in Finance, Ljubljana Mayor Zoran Janković compared the Emonika project to that of the Stožice sporting and shopping complex, where private investor Delta pulled out of the commercial project after failing to secure sufficient interest from potential shop-owners.

Rail operator boss Dušan Mes said in February that Slovenske železnice had met all of its obligations and that in case of annulment, the operator would get compensation amounting to the equivalent of a new train and bus station. Mes said the sum was valued at between EUR 20m and EUR 30m.