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Czech report
by Euro Reporter
2013-12-31 12:55:02
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One man's novel way to fight government corruption

Like many of his law-abiding compatriots, Petr Sourek resents how corruption rewards cheating and is a drag on economic growth. But unlike others he decided to try and profit—legally—from the Czech Republic’s sleazy intersection of business and politics. In 2011 he created Corrupt Tour, a company that offers a series of sightseeing tours that highlight, and mock, some of Prague’s most outrageous corruption scandals in the post-communist era. “We wanted to reverse the usual order of things,” he says. “Corruption basically feeds on business so we decided to start a business that feeds on corruption.” The 38-year-old Sourek studied philosophy and the classics (Latin and Greek) at university. Something of a dabbler, he ticks off a litany of work—freelance writer, lecturer, translator and art director among them. Rather than a straight-forward (and depressing) recitation of crimes, alleged crimes and tallies of stolen public funds—all of which have been previously reported in the local media—Sourek created various themes for his different tours in order to bring some levity to the presentations. One tour takes visitors to the palatial villas of well-connected businessmen at the centre of recent scandals—and then to the plain, simple homes these businessmen lived in before forming their connections. (Despite a seemingly endless parade of corruption scandals since the fall of communism 24 years ago, almost no one has been convicted of a crime.) Another tour takes visitors to construction sites where taxpayers' money seems to vanish into air; or, in the case of the Blanka Tunnel, underground. The sprawling tunnel—well over three miles long—was supposed to be finished last year at a cost of 26 billion crowns ($1.3 billion). But the project is $500 million over budget, and, recently, ground to a halt by a new city government that is balking at paying the cost overruns. Police are now investigating whether the whole contract should be declared invalid. Yet another tour highlights allegations of corruption and graft said to permeate Prague's hospitals.

The Czech Republic ranked 54 out of 176 nations in Transparency International's Corruption Perception Index for 2012, with nearly 90 percent of adults viewing corruption as “problem number one” according to Radim Bures, an analyst at Transparency International, citing poll results. The ranking leaves the Czechs far behind most of Western Europe, and even Eastern European neighbours such as Estonia, Poland and Hungary. Experts estimate that corruption costs the Czech economy 100 billion crowns ($5 billion) per year—a considerable sum for a country of 10.5 million people. The tour I went on was in Czech, so almost everyone was Czech (though there was also a Canadian guy). At the first stop on a Crony Safari–where the guide deploys an ornithology motif—nearly two dozen tourists stood in front of a drab, prefabricated, apartment block, the kind that became ubiquitous during communism. The guide tells his fellow “bird-watchers” that one of Prague's “crows” has a secondary nest here, and that his primary nesting place in Prague is unknown, though rumoured to be palatial. This particular crow is Ivo Rittig, one of a handful of influence-peddlers, aka lobbyists; the local media have dubbed “the Godfathers.” Rittig allegedly made his fortune by winning a contract to provide a ticketing system for Prague's public transit system, the main way people get around a city of cobblestoned lanes. According to allegations (for which he has not, as yet, been charged), Rittig makes money—less than a penny—on every transit ticket sold. Minutes later the tour bus trundles past a hidden address—unseen from the road—that is the official place of business for more than 500 firms. Eventually, the bus stopped before a huge three-story building that looks like a glass-panelled office block but is, in fact, a single family home belonging to another one of Prague's so-called Godfathers: Roman Janousek.

Janousek is currently on trial for attempted murder in a hit-and-run case dating back to March 2012. He was allegedly driving his Porsche Cayenne with an elevated blood-alcohol level when he ran over a Vietnamese woman and sped away. He could get nine years in prison. The incident occurred just days after one of the country's top newspapers published spectacular details of wire-tapped phone conversations, allegedly between Janousek and then Mayor Pavel Bem, which seemed to illustrate Janousek's undue influence over various city matters, such as land deals and public tenders. So far, however, neither he nor Bem are facing any fraud-related charges. Usually those who gained their wealth through suspect means keep a low profile in the community, but even before the hit-and-run incident Janousek had already made a name for himself as a bad neighbour. The Corrupt Tour visitors heard titillating details of how Janousek somehow managed to build his hulking villa on a plot of land that was zoned for open space; how the top floors offer a breath-taking view of the city (a view that was once enjoyed by the inhabitants of the more modest home behind his); and how Janousek (who has also been dubbed Voldemort, the evil character in the Harry Potter series) reportedly attempted to placate his enraged neighbours by offering them a flat-screened TV.


Another car company sets up

The Czech Republic has become well known as a key centre for automotive manufacturing with Hyundai, Citroen, Peugeot, Toyota and of course, Škoda, all producing cars here. Indeed, when adjusted for population, the Czech Republic is the second biggest car-producing nation in the world, behind only Slovakia. The strength of the county’s automotive sector has led large numbers of suppliers to set up in the country – and that group has just seen a new addition to its ranks. The commercial property agency Jones Lang LaSalle has announced that L&L Products has become a tenant of Business Park Rudná, which is located on the western edge of Prague and describes itself as one of the largest logistics parks in the Czech Republic. According to a statement from Jones Lang LaSalle, L&L will be leasing 5,000 square meters “with the potential for growth” and will be making non-woven materials for the automotive industry.

“We are happy to welcome a pure manufacturer in Business Park Rudná, as these buildings were originally designed for higher value added operations such as L&L Products,” Milan Korbelář, associate director, industrial agency at Jones Lang LaSalle, said in a statement. The Czech Republic has developed into an important manufacturing hub for global carmakers in part because of its good transport links, with the country’s central location within hours of major Western European markets a key attraction. Low labour costs are also an important factor, with average wages in the Czech Republic, and Slovakia too, being significantly lower than in Western Europe. Hyundai’s Czech plant is in Nošovice near Ostrava, where production began in 2008. The facility employs about 3,500 people and completes around 1,300 cars a day, with models such as the popular i30 manufactured there. PSA Peugeot Citroën and Toyota began production in 2005 at their jointly run plant in Kolín, with the site having a capacity of around 300,000 vehicles a year. The plant is run by a joint venture, Toyota Peugeot Citroën Automobile Czech (TPCA), and makes three models that are closely related to one another: the Peugeot 107, the Citroën C1 and the Toyota Aygo. New versions of these three cars are due for release next year, with motoring media having printed spyshots showing the prototypes of the updated cars.

Škoda has plants in its home town of Mladá Boleslav and in Kvasiny that actually assemble vehicles, along with a factory at Vrchlabí that produces automatic transmissions for the parent company, Volkswagen Group. L&L Products is not the first car-related company to take premises at Business Park Rudná. It was announced two years ago that Toyota Material Handing CZ would be extending its lease for 5,200 square meters at the park. The company has its Czech headquarters, warehouse and showroom there. Business Park Rudná, which is owned by Heitman global property fund, saw the completion of its first warehouses in 1997 and since then the centre has expanded to 20 halls with a total of 150,000 square meters of industrial premises. Other tenants include Albatross Media, a Czech publishing house, which has warehousing for books and Sportisimo, a sports retail chain, which has been a tenant in the park since 2006.


Czech Republic calls not to boycott Sochi Olympics

The government of the Czech Republic believes sport and politics do not mix and rejects calls to boycott the 22nd Winter Olympics, to be held in Sochi on the Russian coast of the Black Sea. Prime Minister Jiri Rusnok spoke about this in Prague Sunday. He said boycotting international sporting events is counterproductive and usually makes matters worse.

Czech President Milos Zeman has already announced his plans to attend the opening VIP reception in Sochi and watch the Games for two days to support his country’s national team.


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