12 more transport projects stopped

Transport Minister Vít Bárta is trying a more direct tactic after asking construction companies for discounts and delayed payment plans in a bid to slash costs. On Aug. 14, Bárta announced his decision to suspend 12 highway projects already under way and stop preparations of three other planned projects, in addition to 15 rail projects he had already canceled Aug. 9.

Four of the newly halted projects were in late stages of construction: Three were primary roads in northern Moravia, and one was a primary road in northern Bohemia. The ministry will not halt any motorway projects already under construction. Instead, current motorway projects have had their deadlines extended, including the D8 motorway to Ústí nad Labem and the D47 motorway near Bohumín in north Moravia.

However, the decisions may land the ministry in court with companies that are shocked to find their contracts suddenly canceled. Bulldozers drove off four primary roads that were in the middle of being constructed, Bárta said at a press conference Aug. 13.

Earlier in the week, on Aug. 9, the minister halted all railway construction projects that were financed by SŽDC, a track maintenance company. At a press conference following that decision, Bárta said the reason was that the building companies had failed to come up with acceptable price cuts for the state.

The State Fund for Transport Infrastructure, under the ministry, must cut 3.6 billion Kč ($186.3 million) from its budget this year. In 2011, the ministry will deal with a 35 percent cut to its budget. The ministry originally had a "black list" of 51 road projects that were under threat of being halted.

Bárta came into office denouncing overpriced contracts and vowed to readjust contracts with building companies to significantly reduce the cost to the state. But that move has proved difficult, and instead the ministry must altogether cancel some of its costlier projects.

"With the current dramatic situation regarding the state budget, many projects need to be stopped. My first strategic step for starting to save is that only those who come and offer large enough cuts will build," Bárta said Aug. 1.

Projects currently under construction are valued at 200 billion Kč, 120 billion Kč of which has already been invested by the state. The ministry did not specify the amount of money being saved by the recent cancellations and postponements.

After Bárta's first announcements in August, the chairman of the Road Contractors Association in Prague, Petr Čížek, told the Czech News Agency the ministry's decision was a mistake that wouldn't save money in the long term.

"There are contracts, and they cannot be rescinded by one side without a reason," he said.

Claire Compton can be reached at
ccompton@praguepost.com