Business News

Supreme Audit Office, photo: Tomáš Adamec

In this week’s Business News: spending watchdog slams cash flows at export insurer; car unions threaten strike; state rail company announces bigger losses; Czech distrust of digital investments; and fuels company seeks revenues boost from Germany.

Supreme Audit Office puts spotlight on problematic EGAP payments

Supreme Audit Office,  photo: Tomáš Adamec
A damning report on Finance Ministry supervision of state export insurance company EGAP has been released by spending watchdog, the Supreme Audit Office. The office found that the ministry agreed to provide the insurer a billion extra crowns in 2011 and again in 2012 to meet its obligations. In reality, the insurer had 2 billion crowns more than it needed on its books in 2011 and 5 billion more a year later and did not need the extra cash at all. The watchdog complained that it had not been able to shed light on all the insurer’s accounting.

Car unions say strike threat aimed at bringing bosses to negotiating table

Photo: Archive of TPCA
Unions at Hyundai’s Czech car plant at Nošovice have issued a strike warning following the failure to hammer out a new collective agreement for this year. The manufacturer says unions are seeking an average 9.5 percent rise in wages while their offer comes to around 5.5 percent, which is already above the rises agreed this year by Škoda Auto and the TPCA joint venture. Union leaders argue that the strike warning is partly aimed at bringing bosses to the negotiating table.

State rail company sees losses deepen in 2013

Photo: European Commission
The losses of state rail passenger and goods company České Dráhy deepened last year to 1.95 billion crowns compared with 1.6 billion crowns a year earlier. Losses were deepened by the weaker crown, the company said. The freight daughter company bounced back from several years of losses with a profit of just over 500 million crowns in spite of business still being depressed. Transport of heavy goods by rail, such a building materials, has been hit by the long-term contraction of the construction sector.

Czech companies slow to recognize digital opportunities

Photo: ČT24
Czech and Slovak companies have much more limited plans to take advantage of the latest developments in digital and IT technology within their businesses and for customers than their peers in Europe and the rest of the world, according to a report by consultancy company PricewaterhouseCoopers. For example, only 13 percent of Czech and Slovak firms intend to invest in the next three to five years in mobile technology systems to serve customers compared with 34 percent in the rest of Europe. Internet security is also a much lower priority locally. Part of the problem appears to be that previous IT investments frequently fell below expectations in terms of costs, time overruns and the final performance.

State fuels company eyes German contracts to boost earnings

State fuels distribution company Čepro is in some respects going back to its roots by seeking to store petrol and diesel for German companies. The company has been given the government go ahead to make use of its spare storage capacity to earn extra revenue with Germany the obvious candidate for the first contracts. Čepro’s origins go back to the Second World War and the creation of company with a unique distribution network to supply fuel to the German army.