Business News
Czech producer prices grow, so does industrial output. Committee recommends selling Severoceske Doly coalmine to Czech-Slovak investment bank J&T. Czech president signs 2004 budget. Former telecoms monopoly sues market regulator over tariffs.
Producer prices up, industrial output grows
Meanwhile, Czech industrial output grew by 5.2 percent year-on-year in October, level with September's figure. Economists had expected a slightly faster, 5.4 percent rise.
Privatisation committee recommends J&T in coal-mine sell-off
A Czech steering committee has recommended that the government agrees to sell a majority stake in the Severoceske Doly brown coal mine to Czech-Slovak investment bank J&T. According to unofficial reports, the business plans of all the bidders were comparable but J&T had submitted the highest bid of around 6.8 billion crowns ($261 million) for a 55.4 percent stake in Severoceske Doly. A smaller coalmine, Sokolovska Uhelna, could be sold to Sokolovska Tezebni, which was established for this purpose by the mining company's management. Some media reported that Sokolovska Tezebni, the sole bidder, was offering around two billion crowns for a majority stake in the mine. The cabinet is expected to make the final decision on the sale early in January.
Czech president signs 2004 budget with 115-billion deficit
Czech president Vaclav Klaus signed the 2004 state budget which sees a deficit of 115 billion crowns on revenues of 754 billion. The 2004 state budget is built on several reform steps approved by parliament earlier this year, including expenditure cuts, social reforms and tax hikes.
Chutzpah: former monopoly Czech Telecom sues market regulator
The dominant Czech telephone operator Czech Telecom is suing the Czech Telecommunications Office for losses suffered due to stiff price regulation and large investment ordered by the market regulator in the past. The former monopoly operator said it was required by law to invest massive amounts of money into its infrastructure for the so-called universal service but was unable to raise enough in revenue to cover the costs due to regulated tariffs.
The state-controlled former monopoly has been lobbying for a hike in a basket of 2004 regulated prices but the regulator insists that prices for most of Telecom's services should fall when adjusted for VAT changes taking place next year. Cesky Telecom has warned it could post a loss due to the write-off of part of its network this year if the regulator does not allow it to raise prices. Cesky Telecom posted its lowest nine-month profit in seven years due to weak fixed-line revenue on client outflow to rivals entering the liberalised telephony market or to mobile services.
