Blanka to cost billions more

Already beset with delays and the scene of multiple accidents, the Blanka tunnel project will cost 10 billion Kč ($567.5 million) more than first estimated, a spike amounting to 20 percent of the city's annual budget.

Speaking on Czech Television Feb. 7, Prague Mayor Bohuslav Svoboda (Civic Democrats, ODS) said, "According to the progress of the builder's demands, the price for realizing the Blanka tunnel is growing."

Late last year, the project was estimated to cost 25.7 billion Kč, but new estimates have that figure rising by more than one-third to about 37.1 billion Kč. The added costs include 1 billion Kč for new technology, 3.5 billion Kč for inflation and 5 billion Kč in added construction costs. At issue seems to be a contract that gives great leeway for the builders to raise the price as they deem necessary.

The firm working on the project, Metrostav, strongly denies that any cost overruns are its fault.

"The office holders of the magistrate of Prague are responsible for the fact that the construction of the complex of tunnels under Prague Blanka will go up in price," a statement from the company says.

Another Metrostav project, a bridge in Prague-Troja, has seen its price tag grow from 400 million Kč to 1.1 billion Kč.

"All the construction [projects] were ordered by the city," Metrostav spokesman František Polák said of the Blanka project. "We insist that what was agreed to by the magistrate department of the [city] was billed correctly."

The Blanka Tunnel is slated to be a part of the inner ring road system that circles central Prague and is set to be more than 6,000 meters long. The tunnel has collapsed three times since 2008, the latest of which was in July 2010. After that incident, Metrostav took responsibility, and the city sought 10 million Kč in compensation for "the damage caused to the good name of Prague," City Hall spokesman Jiří Wolf said at the time.

The mistakes and cost overruns associated with the project are widely considered a part of a larger pattern in the previous City Hall administration led by Mayor Pavel Bém (ODS). Among the other questionable projects was the 100 million Kč of city money spent on an ill-fated bid to host the 2016 Olympics, with financing continuing two years after Prague was eliminated as a candidate city, as well as the OpenCard project, in which a May 2010 study found more than 43 million Kč unaccounted for.

In recent days, Svoboda has pointed the finger at Bém's administration, and Metrostav agrees.

"The chief of this project was Jiří Toman, who is leaving City Hall under the mayor's pressure," Polák said.

Toman declined comment. Bém says problems began after Svoboda took office.

And while Svoboda stops short of using the word "corruption" when talking about the increased price tag, he did say, "This shows how necessary Prapor [a newly created anti-corruption advisory body] is, because if we had considered in these contracts - as a good economist has to - a final budget, the contracts would have be different."

"If the contracts were done at the beginning with consideration of all possible circumstances, I would find it crucial that the winning price is also the final price," he added.

Svoboda says the city will seek to renegotiate with Metrostav. He insists he learned of the increased costs in late January, but some question whether the spike was intentionally kept secret until after the October 2010 election, in which ODS regained control of City Hall.

Benjamin Cunningham can be reached at
bcunningham@praguepost.com