Business briefs

Domestic defence contractors want a piece of the NATO pie; The Cabinet agrees a comprehensive plan for promoting economic growth; Additional $60 million earmarked in support of Hyundai car plant project; DHL Solutions to oversee Lego Group toy maker's new European distribution centre outside Prague; New Agriculture Minister named following scandal at Czech Land Fund

Domestic defence contractors want a piece of the NATO pie

Domestic firms have failed to gain any major defence contracts since the Czech Republic joined the NATO military alliance seven years ago. The business daily Hospodarske noviny reports that among the handful of Czech firms to win a lucrative contract abroad is Montservis Praha, which won a tender to build a gas pipeline at the American military base in Aviano, Italy. The Czech Defence Industry Association is proposing a new section be established in the NATO Industrial Advisory Group that would be liaise with contractors from new NATO member countries.

The Cabinet agrees a comprehensive plan for promoting economic growth

The Cabinet this week approved a strategic plan for promoting economic growth through the year 2013. It calls for large investments into the research and development, infrastructure, and the educational system and includes some 270 proposals. The deputy prime minister for the economy, Martin Jahn, said that if implemented, the plan could help the Czech Republic reach an annual growth rate of 6 percent, nearly 2 percent above the rate forecast by the Czech National Bank and the European Commission.

Additional $60 million earmarked in support of Hyundai car plant project

The Cabinet this week also agreed to a proposal by Industry and Trade Minister Milan Urban to allocate an additional 1.5 billion crowns, or some 60 million US dollars, for the repair and construction of industrial zones and infrastructure near Ostrava, the proposed site of a new 1.2 billion dollar Hyundai car plant. The Czech government had already earmarked over 150 million US dollars in support of the Hyundai investment, which has become a focal point for political debate over the Czech Republic's system of incentives. The main opposition Civic Democratic Party are calling for a major reduction in incentives packages for attracting foreign investment.

DHL Solutions to oversee Lego Group toy maker's new European distribution centre outside Prague

The Danish toy maker Lego Group has announced its new European distribution centre will be built in the town of Jirny, near Prague. Lego, which makes a wide range of interlocking plastic building blocks and other toys, said the centre will begin full operations in 2007 and employ some 200 people. The logistics company DHL Solutions will oversee operations. Lego has announced this summer that it would close five European distribution centres as well as a factory in Switzerland, due to rising labour costs.

New Agriculture Minister named following scandal at Czech Land Fund

Jan Mladek and Prime Minister Jiri Paroubek, photo: CTK

And finally, outgoing Agriculture Minister Petr Zgarba resigned this week over allegations of widespread corruption at a state body under his control. He denies any personal wrongdoing. Board members of the he Czech Land Fund, which manages state-owned real estate, are thought to have passed on inside information to land speculators and sold property at well below the market rate. Social Democrat MP Jan Mladek replaces Zgarba as Agriculture Minister.