Prague fails to secure billion-crown EU subsidy for water treatment plant

Prague, Jan 26 (CTK) - A meeting between representatives of the Czech Environment Ministry and the European Commission showed yesterday that Prague will not get a EU subsidy of billions of crowns for the reconstruction of a water treatment plant, Prague councillor Radek Lohynsky told CTK.

It has turned out that Prague has no chance to get the money, Lohynsky said.

He said the key problem is the fact that Prague previously signed a contract with a water management company for a period that is too long. Without the shortening of the validity of the contract, the subsidy application cannot be even accepted by Brussels.

Lohynsky said it has been known from the start of the project that the contract is a problem.

Prague signed a water management contract with Veolia that will expire in 2028.

"The fears that we have been feeling more and more intensively have been confirmed. We did our best in the past year to prevent the failure of the ten-year effort to win the subsidy," Prague Mayor Bohuslav Svoboda (Civic Democrats, ODS) said.

Svoboda said a new solution needs to be prepared.

But a Prague City Hall spokewoman said afterwards that the Czech capital will further negotiate about the subsidy.

The Environment Ministry is to discuss the issue with Prague's representatives on February 1.

The costs of the reconstruction of the Prague water treatment plant will exceed 11 billion crowns. Prague wanted to receive up to 5.9 billion crowns from the Environment operational programme.

Without the subsidy, Prague has three possibilities. First, it may pay the water treatment plant by itself, but it does not have enough money for it. Second, it may revise the reconstruction project to make it cheaper. And third, it may scrap the project and pay fines for letting out dirty water.

Last year, a public tender for the plant's reconstruction was won by a group of four companies. The contract was conditioned by the granting of the EU subsidy, however.

The Environment Ministry announced that it would end talks on controversial projects applying for EU subsidies so that it may offer the subsidies to other projects that would have higher chances to succeed.

The money available to the Czech Republic within the Environment programme needs to be drawn and used by 2016.

($1=19.597 crowns)