Budget cuts threaten road projects

The Transportation Ministry is petitioning the government to include infrastructure projects in the state budget drafted this fall, saying that if an additional 23 billion Kč ($1.2 billion) is not secured in the new budget, hundreds of transport construction projects will have to be curtailed.

The ministry has enacted a crisis plan to deal with the funding deficit in the form of cost-saving measures during implementation of construction projects, but the plan may not be enough, according to Transportation Minister Gustáv Slamečka.

At a June 26 press conference, Slamečka said the approved expenditure framework for the government's 2010 budget, together with a revenue drop caused by the economic crisis, points to a shortfall in financing the construction of transport infrastructure to the tune of 23 billion Kč. The shortfall should affect approximately 2,100 kilometers (1,300 miles) of roadways, of which 1,100 kilometers are currently in operation and 150 kilometers worth are under construction, plus a number of bridges and tunnels.

Slamečka noted the ministry has funding from other sources that needs to be matched by state funding for certain projects to move forward.

"The ministry receives money from the EU and from the state," he said. "We have no problems with EU-funded projects, but we're coming into problems with state-funded projects because of the negative impact of the financial crisis."

Further funding unlikely

Despite such entreaties, Finance Minister Eduard Janota has repeatedly stated that the Transportation Ministry should not expect additional funds.

"The State Fund for Transport Infrastructure should have about 88.5 billion Kč at its disposal next year, which is the largest volume in its history," said Radek Ležatka, spokesman for the Finance Ministry. "Further negotiations will surely be handled, but an additional rise in funds is not very likely."

Slamečka outlined three major consequences the country would face if the Transportation Ministry is not able to secure the required funding.

Approximately 40 long-term projects that are under way, including several highways and city bypasses in Plzeň, České Budějovice, Ústí Nad Labem and Brno, will have to be shelved. About 10 planned projects yet to begin will be postponed indefinitely, including bypasses in Javorník and Dubí. Finally, about 140 projects in various stages of development will need to be indefinitely postponed as well, including several key highways around Prague and in northern and eastern parts of the Czech Republic.

A statement issued by the ministry outlines the open-ended nature of the situation, but shows that the ministry remains confident the government will find a solution.

"Such restrictions on the motorway network are unaffordable for the [Transportation Ministry], which will therefore continue to look for resources, which could increase the current expenditure frameworks," the statement said.

Slamečka says that, while the ministry's coffers are full at the moment, they won't be for long. The purpose of the press conference, he said, was to call national attention to the situation before it is too late.

"Our funding concerns are preliminary, but serious enough to discuss in order to show the government the possible consequences," he said. "We have enough money for this year, but the situation will later become critical."

The aforementioned ministry crisis plan seeks savings in current construction projects. The plan calls for changes in laws designating how land is purchased for projects and a revaluation of the way roads are designed. Rethinking both legal and aesthetic aspects of transport construction projects - the gradient of roads, for example - will allow the ministry to save money in all stages of construction. Such changes may affect the comfort of driving on the roads but not safety, Slamečka said.

Also at the press conference was Alfred Brunclík, general director of the Road and Motorways Directorate of the Czech Republic. Brunclík stressed that a lack of funds is a new situation for the Transportation Ministry, but that there are possible solutions.

"After years of growth, we're now in a situation where we must look for investments," he said. "It will be a long process, but we are only in the first phase."

The European Regional Development Fund and the Cohesion Fund are major EU sources of cash for infrastructure projects. The Czech Republic is set to receive 30 million euros in funding between 2007 and 2013, 26 percent of which is earmarked for transportation projects, including motorways and railway lines. According to Dennis Abbott, spokesman for EU Regional Policy Commissioner Danuta Hübner, the Czech Republic receives the highest aid intensity per capita in the EU.

"The main objective of the Structural and Cohesion Funds in the Czech Republic is to transform the country's socio-economic environment in line with the principles of sustainable development and to make the Czech Republic an attractive location for investment in order to attain the economic level of EU countries," he said.

Throughout the press conference, Slamečka emphasized a degree of understanding between the ministry and the government, but stressed the necessity of finding a solution soon. The ministry's official statement echoed these sentiments.

"Due to the financial situation, the state is in a moment of debate on the [funding] issue and will find a solution which will benefit the building of transport infrastructure not only during the economic crisis, but also afterward."

Stephan Delbos can be reached at
sdelbos@praguepost.com