The Prague Post Online: Business: Biz Week

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November 23rd, 2008

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CROWN Several exporters have begun using euros to pay their domestic suppliers, Hospodářské noviny (HN) reported July 1. Škoda Auto is planning to switch to euro payments to all of its suppliers soon. The firm’s CFO said Škoda lost 1 billion Kč ($64.8 million) in the first quarter of this year to the strong crown. The Association of Exporters said its companies have earned 80 billion Kč less this year than in 2007.

BUDGET The Cabinet has approved a draft budget for 2009 with a deficit of 38.1 billion Kč, Finance Minister Miroslav Kalousek told journalists June 27. Total expenditures should reach 1,053 billion Kč, setting the deficit at 1.5 percent of gross domestic product. Kalousek said the draft budget required “austerity measures” in all areas to account for the lower deficit.

RATES The Czech National Bank (ČNB) voted to keep interest rates at 3.75 percent June 26, with one board member voting for a 0.25 percentage point increase. Inflation continues to be contained, according to Zdeněk Tůma, the ČNB’s governor. Risks to the bank’s projections include further possible spikes in oil prices and accelerated growth of wages.

COAL Poland’s Environment Ministry has cleared the way for New World Resources (NWR) to reopen a coal mine in the country’s south, Reuters reported June 24. NWR, which owns the Czech coal miner OKD, plans to spend up to 800 million euros ($1.2 billion/19.2 billion Kč) developing the mine in Dębieńsko, where it expects to extract 4 million tons of coal annually.

REGIONS An analysis of regional development by Aktuálně.cz found that, after Central Bohemia, the area around Pardubice, east Bohemia, is the most prosperous in the country, the news server reported June 30. While wages are rising mildly, few parts of the country have seen an influx of population, housing construction and tourists like Pardubice. Moravia’s regions, despite the presence of Brno, were found to be “lagging behind.”

TENDER The Swedish construction company Skanska has won a 2.26 billion Kč contract from the Railway Infrastructure Administration, the company announced June 26. The project, which will see Skanska leading a consortium of two other local firms, focuses on upgrading a 30-kilometer section of railway between Prague and the German border to accommodate express trains.

BUBNY Orco Property Group is planning to construct a whole city district in Prague 7–Bubny at the cost of 72.4 billion Kč, HN reported June 25. The Bubny project is by far the largest in the country, with Orco planning to create 1.2 million square meters of real estate over the next 15 years, including apartment buildings, office space, shopping centers and a medical center.

RETURNED The government must return a 941.9 million Kč fine it imposed on 10 international engineering firms, a regional court in Brno, south Moravia, ruled June 25. The fine, which was the largest-ever imposed by the Anti-Monopoly Office, came on top of a European Commission fine of 750 million euros for the same offense.

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