Press Releases
[Press release] Record state spending plans for dodgy Czech road projects slammed by Bankwatch
(September 21, 2009)
 Spending plans for Czech road projects are more than curious - motorway bridging over a chapel in Rehlovice village at the D8 motorway. |
The Czech government's approval last week of the highest ever state budget for transport infrastructure, involving the country's borrowing of loans from the European Investment Bank (EIB), has been criticised by Bankwatch member group Hnuti DUHA (Czech Friends of the Earth) for potentially giving the green light to a number of poorly conceived road construction projects that are suffering from endemic over-pricing and corrupt practices.
The Czech government approved CZK 96 billion (EUR 3.8bn) for 2010 under the State Transport Infrastructure Fund. A current EIB loan for Czech transport for the years 2008-2011 of CZK 34 billion (EUR 1.35bn) may be extended until 2015, with an additional CZK 25 billion (EUR 1 billion) to be negotiated next year. [1]
Pavel Pribyl, of Hnuti DUHA and Bankwatch's Transport coordinator, said: "The Czech Ministry of Transport has once again managed to fill its boots in spite of an alarming lack of planning in Czech transport infrastructure. There continues to be a complete lack of clarity on construction plans, with no analyses available about the transport, social and economic benefits of the proposed projects.
"Outside the ministry, we remain in the dark about which construction projects are a priority and for what reason. Hundreds of millions of euros of EU taxpayers money from the EIB and the EU Funds are on the line for a range of projects that make little economic or environmental sense. Infrastructure projects can stimulate an economy hit by recession, but not at any cost." [2]
The economic dubiousness of infrastructure spending in the Czech Republic has also been raised in recent public pronoucements by the country's National Economic Council of the Government (NERV).
In a chapter on 'Corruption and Public Tenders', a recent NERV report stated:
"In the Czech Republic, for example, the disproportionate costs of construction financed from public budgets compared with other European countries, including the most advanced countries, has been discussed for years ... The price comparison between infrastructure construction and housing construction is, in Austria, more or less 1:1. In the Czech Republic this ratio is closer to 1:1.62 – which means that Czech infrastructure is about 62% more expensive compared to the price levels in housing construction." [3]
Pavel Pribyl commented: "That we are throwing money away on unplanned construction is nothing new, even if a growing number of bodies ranging from NERV, the Supreme Audit Office and the Finance ministry are now acknowledging that the supposed costs involved are curiously inflated.
"In a time of recession the Czech government cannot cower before the construction lobby and spend funds on such environmentally and socially unwarranted projects. We expect clear signals from the European Commission and the European Investment Bank that they will not tolerate such chaotic planning, and that European money will only go for transport projects that are well conceived and that respect EU environmental law."
The Czech government approved CZK 96 billion (EUR 3.8bn) for 2010 under the State Transport Infrastructure Fund. A current EIB loan for Czech transport for the years 2008-2011 of CZK 34 billion (EUR 1.35bn) may be extended until 2015, with an additional CZK 25 billion (EUR 1 billion) to be negotiated next year. [1]
Pavel Pribyl, of Hnuti DUHA and Bankwatch's Transport coordinator, said: "The Czech Ministry of Transport has once again managed to fill its boots in spite of an alarming lack of planning in Czech transport infrastructure. There continues to be a complete lack of clarity on construction plans, with no analyses available about the transport, social and economic benefits of the proposed projects.
"Outside the ministry, we remain in the dark about which construction projects are a priority and for what reason. Hundreds of millions of euros of EU taxpayers money from the EIB and the EU Funds are on the line for a range of projects that make little economic or environmental sense. Infrastructure projects can stimulate an economy hit by recession, but not at any cost." [2]
The economic dubiousness of infrastructure spending in the Czech Republic has also been raised in recent public pronoucements by the country's National Economic Council of the Government (NERV).
In a chapter on 'Corruption and Public Tenders', a recent NERV report stated:
"In the Czech Republic, for example, the disproportionate costs of construction financed from public budgets compared with other European countries, including the most advanced countries, has been discussed for years ... The price comparison between infrastructure construction and housing construction is, in Austria, more or less 1:1. In the Czech Republic this ratio is closer to 1:1.62 – which means that Czech infrastructure is about 62% more expensive compared to the price levels in housing construction." [3]
Pavel Pribyl commented: "That we are throwing money away on unplanned construction is nothing new, even if a growing number of bodies ranging from NERV, the Supreme Audit Office and the Finance ministry are now acknowledging that the supposed costs involved are curiously inflated.
"In a time of recession the Czech government cannot cower before the construction lobby and spend funds on such environmentally and socially unwarranted projects. We expect clear signals from the European Commission and the European Investment Bank that they will not tolerate such chaotic planning, and that European money will only go for transport projects that are well conceived and that respect EU environmental law."
For more information
Pavel Pribyl
Hnuti DUHA-CEE Bankwatch Network
Tel: 603 207 249
Email: pavel.pribyl AT hnutiduha.cz
Notes for editors
[1] More background available at the Prague Daily Monitor website.
[2] Among the projects in line for financing is the R52 project seeking to connect the Czech Republic's second city Brno with Vienna. Serious question marks hang over the planned motorway's economic and environmental viability.
The D8 motorway - now set to cost over EUR 600 milion - is an another of the Czech Republic’s long-term most controversial motorway projects. In spite of numerous deficiencies in designing and proceedings proved, the construction is proceeding with the help of an EIB loan. There are also attempts underway to channel European cohesion funding into the project.
To date there have been 14 law suits filed against the D8 motorway, with more under preparation. Among these are seven law suits against the construction permits. So far civic initiatives have not lost any one of these suits.
[3] The NERV report is available for download (in Czech) here.
CEE Bankwatch Network gratefully acknowledges EU funding support.