Future of massive clean-up tender uncertain

The future of the Czech Republic’s largest public tender is uncertain after the Finance Ministry revealed that three firms had bid between 57 and 65 billion crowns to remove environmental damage inherited from the communist regime. Prime Minster Petr Nečas, as well as several other cabinet ministers are increasingly receptive to arguments by the project’s critics who warned the tender might become the country’s “largest single corrupt deal”.

The Finance Ministry on Tuesday opened the envelopes with bids by three firms competing for what might be the biggest tender ever handed out in the Czech Republic.

The Czech government in 2008 announced the tender for removing environmental damage and threats which originated during the communist regime in more than 500 sites around the country.

The lowest bid of 56.8 billion crowns, or nearly 3.2 billion US dollars came from the Czech branch of the Danish firm Marius Pedersen Engineering; the company Geosan Group asked for 57.8 billion crowns while Environmental Services, part of the Slovak financial group J&T asked for 65.5 billion.

Zdeněk Zajíček
The Finance Ministry, which is organizing the tender, will now review the bids before passing them onto the government which is expected to reach a final decision on the project in October. Deputy finance minister Zdeněk Zajíček.

“The government will also receive two audits which will lay out experts’ opinions about how much the tender should cost. The government will therefore have relevant information about the costs to be able to decide.”

But the bids disappointed Prime Minister Petr Nečas who said in a statement on Tuesday he had increasing doubts about the whole project. The eco-tender has also been criticized by the junior coalition Public Affairs party. On the other hand, the deal has strong backing from Finance Minister Miroslav Kalousek and his TOP 09 party.

Photo: CTK
The project has also been criticized by a number of NGOs; the Czech branch of Transparency International even said it might become the largest single corrupt deal in the country. Critics point out that no one really knows the real costs of removing the environmental hazards.

When polluted factory premises, wastes dumps, plots of lands and other property were privatized in the early 1990s, the state provided guarantees to their new owners of 115 billion crowns that these risks will be removed. But as Radim Bureš from Transparency International points out, the actual cost of removing them might be much lower.

Radim Bureš
“We are dealing with entirely fictitious figures by not differentiating between the actual costs and the state guarantees for the removal of the environmental risks. These are estimated at around 115 billion crowns; on the other hand, the Environment Ministry estimated the actual cost at between 26 and 33 billion. So you see it’s not a couple of million crowns we are talking about but rather tens of billions of crowns.”

Critics say the cabinet would do best if it scrapped the whole deal entirely and parcelled it up into individual clean up projects. The government is expected to reach a final decision on the project next month. But commentators note that its struggle to reach a decision on the controversial clean-up tender might further destabilise the already shaky coalition.