Business News

Photo: CTK

In Business news this week: the Czech Republic is counting the costs of the flash floods hitting northern Moravia; the Czech Nation Bank keeps its key interest rate unchanged; a new runways at Prague’s Ruzyně Airport promises around 17,000 jobs; energy giant ČEZ is going to build a new gas-fired power plant; and the Investor of the Year awards are handed out.

Czechs count flood costs

Photo: CTK
The Czech Republic has begun counting the costs of the flash floods that hit parts of northern Moravia on Wednesday and Thursday. Damages to motorways and other roads have been estimated at roughly one billion crowns, or over 54 million US dollars. Another 380 million crowns, or more than 20.5 million US dollars, is the initial bill for damages to the rail network. Costs of damages to power and phone lines have been put at over ten million crowns. The flash floods, which unexpectedly hit the region of North Moravia on Wednesday night, killed 11 people, and are the third most deadly floods in recent Czech history.

ČNB leaves interest rates unchanged

Czech National Bank,  photo: Štěpánka Budková
The Bank Board of the Czech National Bank unexpectedly decided on Thursday to keep the key interest rate at 1.50 percent, the lowest ever level in the Czech Republic. At a meeting of the board on Thursday, four central bankers voted for keeping the rate unchanged and one was for their cutting by a quarter point, CNB governor Zdeněk Tůma said. The board decided to wait for a new forecast and a meeting in August. Mr Tůma said a bigger-than-expected fall in economic activity in the Czech Republic and abroad posed a risk to further economic development. Analysts say a rate cut can be expected at the end of summer but they warn at the same time that central bankers might fear such a step because of the strength of the crown and inflation developments

New airport runway to bring 17,000 jobs

Photo: CTK
The construction of a new runway at Prague’s Ruzyně Airport should create some 17,000 new jobs, a new study says. The runway, which should be built between 2012 and 2013, is also expected to decrease Czech unemployment by 0.3 percent, and raise Czech GDP by 126 billion crowns, or more than 6.8 billion US dollars, by the end of 2020. The management of Ruzyně Airport says a new runway is needed due to the increasing number of travellers; in 2008, the airport dispatched more than 12.6 million passengers. Environmental activists are protesting the plans.

ČEZ to build new gas-steam power plant

Photo: Štěpánka Budková
The energy giant ČEZ is going to invest some 20 billion crowns, or over one billion US dollars, in the construction of a new gas-fired power plant in Počerady in northern Bohemia. ČEZ signed a contract on Thursday with the firm Škoda Praha Invest that will build the new power plant. It is expected to be finished by 2013 and should supply 841 kilowatts to the grid. Gas for the new power plant will be supplied by the RWE Group, whose management signed a 15-year supply deal starting in 2013.

Investor of the Year Award for 2008 goes to IVAX, IBM and CPN

The annual Investor of the Year Award, organized by the Czech government’s Czechinvest Agency, has been awarded to the pharmaceutical group IVAX, the IT giant IBM and the Czech biotech firm CPN. The awards were handed out on Tuesday by Prime Minister Jan Fischer. In 2008, the volume of foreign investment in the Czech Republic dropped by 41 billion crowns to 30 billion, or more than 1.6 billion US dollars. For the first time, however, investors put more money into research and science than manufacturing.