Auditing operation No. 04/25
Development of transport infrastructure in cohesion regions Central Moravia and Moravia-Silesia
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2003 under No. 03/25. The auditing operation was managed and the audit conclusion drawn up by Mr. Petr Skála, Member of the SAO.
The aim of the audit was to review whether the audited bodies warrant conditions for expedient and economical dealing with financial resources for the construction of the motorway D47 and the high-speed road R48. The audited period covered the years 2003 to 2004, as well as previous periods and following months in certain cases of relevant connections.
The audited bodies were the Ministry of Transport (hereinafter referred to as “MT”), the Ministry for Regional Development, the Ministry of Industry and Trade, the State Fund of Transport Infrastructure and the Road and Motorway Directorate of the Czech Republic (hereinafter referred to as “RMD”) and within its framework the Head Office, the Division Brno, and the Administration Ostrava.
The development of the main traffic network of regions indicates a considerable lack of conceptual preparedness. The main reason of this situation is that the state administration did not create conditions for decision-making process in the area of the main transport network development in order to ensure as high corporate economic return of paid-in capital as possible. It appeared particularly when the state representatives strove to finance D47 in co-operation with the private sector. In the case of the project B.O.T. D47, they did not learned hard way from similar project of D5. Negotiating the B.O.T. D47*) project, they neglected to ensure an equal position for themselves and they started to respect the advisors’ statements not until the threat of high sanctions for the Czech Republic came into consideration. The state representatives left all initiative for the D47 building negotiation in co-operation with the private sector to a professional committee without authority, and thereby almost eliminating the MT’s influence on the final result.
Changes in prioritising between R48 and D47 manifested themselves in financial resources provision. The R48 has no fixed framework of financing despite the EU participates on its funding. By contrast the D47 with a worse territorial readiness has available the right financing scheme but the budget funds could not have been all used in 2004 for the real situation of preparedness.
Negotiating the preparation and the construction of the regions’ main traffic network, the RMD did not prefer economical attitude. The RMD negotiation has been showing an endeavour to exhaust dispensable resources. They failed to prepare the D47 and R48 constructions to build them as quickly and effectively as could have been possible. However, the RMD position has been getting more difficult by administrative problems, of which dealing with has been beyond the RMD competence, in particular in procedures of urban and territorial planning.
Auditors brought the evidences that the MT preparing and constructing the main traffic network of regions did not put together all basic conditions needed for high effectiveness and economy of public resources spending. This state has persisted since the Czech Republic came to existence. The SAO recommends changes in the hitherto system of deciding on traffic network acquisitions in such a way to regularly execute objective decision making procedures in order to limit subjective, incidental and intuitive decisions on multibillion sized acquisitions.
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*) Note: PPP – B.O.T. means such a financing of large projects or services where a private sector organization covers investment and executes or operates for payments from the state or another public body activities, which normally should be financed, executed or operated by the public sector (Public – Private – Partnerships). B.O.T. (Build – Operate – Transfer) is one of the PPP forms, in which a private body builds up a certain project from its own resources, operates it for payments from users, and subsequently after the negotiated period transfers it to the public sector, e.g. road, motorway, tunnel, prison, nursing home, canteen, etc.