Minister says PPP or delayed payment project could build Czech motorway stretch

Czech Transport Minister says PPP and delayed financing projects are in the running to bulid stretch of D3 motorway

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Czech Transport Minister Pavel Dobeš (Public Affairs, VV) says a Public Private Partnership (PPP) deal is being looked at as a way of financing a stretch of the long planned and promised motorway without having an immediate impact on stretched government budgets.

Dobeš said a stretch of the D3 motorway linking the capital Prague and south Bohemian city of České Budějovice and onwards to the Czech-Austrian border could be subject to a PPP project. At the moment, it is one alternative with the other being a delayed payment project with talks over this possibility continuing with the Ministry of Finance, Dobeš said at a news conference on Friday.

PPP projects have been talked about more than a decade in the Czech Republic with strong initial support for the concept of getting private companies on board to build infrastructure and then charge the state or users later from the main political parties.

But early hopes for such projects failed to bear fruit, with a number of projects initiated by the government and then scrapped at the last moment. The latest such example was the cancellation of a PPP project to build an extension and new facilities at Prague Střešovice’s military hospital with around Kč 187 million lost as a result of penalty payments and wasted preparations.

Faced with tightened budgets, especially for infrastructure projects, the transport minister has talked up the idea of PPP projects stepping into the breach. A damning report from a British House of Commons treasury committee and National Audit Office report last year has, however, attacked the effectiveness of PPP projects in times of crisis, pointing out, for example, that loan finance for private companies has become up to a third more expensive. Top managers at the principle Czech spending watchdog, the Supreme Audit Office (NKÚ) have also been cautious about the PPP concept.

Dobeš gave his update on the prospect of the D3 PPP project in a joint news conference with Ministry of Industry and Trade Martin Kuba (Civic Democrat, ODS). Kuba talked up the need to build two new nuclear reactors at state-controlled power company ČEZ’s Temelín site in South Bohemia, saying that nuclear produced power was a stable, safe and strategic source of power for the Czech Republic.

Improved road communications with a view to the heavy traffic generated by the nuclear expansion project have been one of the demands of local politicians and business leaders.