Gov't OKs proposal to raise EGAP funds by CZK 280bn

Prague, March 6 (CTK) - The Czech government Wednesday adopted a Finance Ministry proposal to raise funds of the state-run Czech Export Guarantee and Insurance Company (EGAP) by Kc10bn to Kc280bn, Finance Minister Miroslav Kalousek said after the cabinet meeting.

The government also approved a change to the state budget law. Budget revenues and expenditures will not change, however, said Kalousek. The measure was taken in connection with a promising investment in Iraq, he added.

Representatives of EGAP and the Industry and Finance Ministries are near signing a project to build a 980 megawatt Khormala power plant in Iraq. Czech companies would supply around 70 percent of the total value of the project, which represents $500m (around Kc9.8bn). Around 2,000 jobs would be created. The Czech Republic would cooperate on the project with Turkey.

The cabinet has put off talks on a change to the legislation providing for a legal entry of betting offices from the EU into the Czech market.

"I have asked for postponement until next week because neither Prime Minister Petr Necas (Civic Democrats, ODS) nor Mr Karel Schwarzenberg (Foreign Minister, TOP 09) were present at the government meeting," Kalousek told CTK.

"A political decision has to be made and the chairmen of the coalition parties should be present," Kalousek explained.

The Finance Ministry drafted the proposal in response to the EC criticism of the lottery law. The Commission considers the ban on running lottery business by foreign entities discriminatory. The legislation runs counter to European law, according to the EC.

A bill on mandatory labelling of ethyl alcohol was approved by the government in reaction to the methanol scandal which claimed lives of over 40 people in the Czech Republic since last September, a source familiar with the government meeting has said.

The bill aims to put limits on illegal trade in pure alcohol and prevent tax and customs duty evasion. It introduces, for instance, a new duty for all producers and distributors who label bottles of spirits with a stamp to make a deposit of Kc5m as one of conditions for their registration as alcohol dealers.

The government approved a draft amendment to Small Businesses Act, worked out by the Industry and Trade Ministry, which introduces licences for sale of spirits.

The Association of Trade and Tourism said the measure will not solve problems with the black market.

The bill seeks to make it easier to check companies trading in ethyl alcohol and spirits, to cut sales of untaxed and low-quality liquor and to improve protection of consumers and their health.

The cabinet also approved parameters of a tender for modernisation of around a 10 km section of a railway line from Prague's Bechovice to Uvaly, the government said on its website.

SZDC railway track management company put the project's value at Kc1.8bn, with the EU to contribute over Kc1bn. The speed will grow to 160 km per hour.

The project is a part of the first transit railway corridor from Prague via Decin to Germany and from Prague via Brno and Breclav to Austria.

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