Transport ministry turns to China for cheaper roadworks

The Czech Republic wants to save money on road construction, and China is looking to break through to European construction markets. It seems an ideal match to Transport Minister Vít Bárta, whose ministry is the one hardest hit by budget cuts amid numerous ongoing projects. But Czech construction companies are, needless to say, not enthusiastic. Christian Falvey has more.

The Ministry of Transport needs to fill a 10.6 billion crown hole in its budget for 2011; it is the largest cut of all of the 14 ministries. But at the same time there are major road works underway all over the country. And though Czech construction companies have offered numerous concessions in order to be able to remain at work, the Transport Ministry continues to weigh its options, even the ones that are further afield, as minister Vít Bárta told Czech Television at the weekend.

“I will be meeting with the Chinese ambassador on Thursday of this week to consult with him about taking the first steps to invite Chinese companies to the Czech Republic. I’m quite convinced that if Chinese companies built just five kilometres of highway in the Czech Republic it would have a strong developmental impact on the behaviour of all of the other players on the market.”

Vít Bárta, photo:
The other players on the market however are fed up after a year of bad news. As things now stand, record lows await them next year, with only 22 kilometres of new highway to open, they will have only a third of this year’s investment, they fear even greater unemployment, and they say that the Chinese can offer lower prices only because they are subsidised by a communist government. Václav Matyáš is the president of the Association of Building Entrepreneurs.

“Seeing as how construction has slumped by nearly 60 billion in the last 10 months compared with last year and there are between 30 and 40 thousand unemployed, this truly does not seem like a reasonable idea to us.”

Looking to China for cheap work was perhaps inevitable given the recent experience of Poland. In a first for the EU, zealously free-market Poland hired the state-owned China Oversees Engineering Group last year to construct 50 kilometres of road – at a staggering 60% of the price. The decision saved Polish taxpayers millions, but was dogged by concerns over underpaid Asians being brought in to do the work that unemployed Poles were desperate for.

For the time being, talk of contracts with China is just talk. But the current mantra of Czech politics is clear and points in only one direction: it is not create jobs wherever possible, but save money wherever possible.