Corruption watchdog sounds alarm over fast track Prague metro JV decision

Visualisation: Metroprojekt -

An anti-corruption watchdog has accused Prague city council leaders of rushing into a multi-billion crown joint venture connected with a new metro line without public discussion and explanations of what is involved. Transparency International warns that in the wake of previous big budget city scandals, it could another case of act in haste and regret at leisure.

Visualisation: Metroprojekt -
The Czech branch of anti-corruption campaigner and good government promoter Transparency International called a hasty press conference to sound the alarm about a massive joint venture to develop metro stations and the surrounding land on the proposed D metro line.

The D line heads from the centre of Prague into the city’s southern suburbs from the existing Pankrác station to the outer suburb of Písnice with links to existing central stations. The new lines will total around 11 kilometres and be a significant addition to the capital’s transport network.

But one aspect of the metro extension plans – a joint venture to develop eight of the 10 planned stations and the surrounding land has come under Transparency’s scrutiny. The announcement of the joint venture deal with Czech- based group Penta Investments – in which Penta has a decisive 51 percent stake - was made in February.

The structuring of the competition which Penta won was strange, with one of the main factors the rate of interest it would charge on the initial investment into the joint venture. And many other questions were also raised about the joint venture’s scope, development, and what each side would bring to the table and take away from it.

But Transparency hoped that these questions and others would be answered during political debate about the deal. It was astonished then to learn that there will be no open debate with the deal set to be cleared by the city council’s wholly owned transport company on Wednesday. David Ondráčka is transparency’s director:

ʺIt is not very clear who will and what will be included into the deal financially, about the land and other stuff. The public oversight is highly problematic. It seems that the public will have no say about what projects will be built and whether urban planning aspects will be taken into account.ʺ

David Ondráčka,  photo: Karolína Koubová
City council leaders justified bringing in a private company saying it would speed up the metro construction and urban development associated with the new line. Work on the line should start in 2019.

But the anti-corruption group questions why the rush and bypassing of all debate. David Ondráčka again:

ʺIn total, it’s a project worth 60 billion Czech crowns which will take the next 15 to 20 years. We don’t see the reason for rushing now without public and expert debate. We think the city council should allow the local assembly to discuss it once or two times and answer all the questions and question marks which are very serious at the moment.ʺ

The city’s transport company has put the value of the work to be undertaken by the joint venture at 6.5 billion crowns. Transparency questions though who will have long term ownership of the land and projects developed and the many sister companies likely to be spawned by the joint venture.