EU to study Czech Hyundai aid project-watchdog

PRAGUE, Oct 23 (Reuters) - The Czech anti-monopoly watchdog (UOHS) said on Monday it considered government aid for Hyundai's <005380.KS> planned Czech factory was compliant with EU rules, but handed the issue to the European Commission for approval.

Hyundai is planning to spend 800 million to 1 billion euros ($1.01 billion to $1.26 billion) on a car factory near the eastern city of Ostrava, which will make 300,000 cars and 600,000 transmissions annually at full capacity in about 2010.

"UOHS considers the proposed aid to be compliant with European rules up to its maximum level for the given project and the region, that is 15 percent of total investment costs," UOHS said in a statement.

The planned aid includes tax breaks and training subsidies.

UOHS said the European Commission had been notified of the incentive package because it exceeded support granted under Czech law.

The watchdog body said the European Commission approval process could take from two to 18 months. ((Reporting by Jan Lopatka, editing by Sue Thomas; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474)) ($1=22.47 Czech Crown) ($1=.7931 Euro) ($1=.7931 Euro)

Keywords: AUTOS CZECH HYUNDAI