Blanka case: Prague did not reach an agreement with Metrostav, the dispute goes to court
Metrostav did not agree with the Prague City Council to solve the problems associated with the construction of the Blanka tunnel. The company will take the case to court, where it will want to get the invoice paid out to about 2.1 billion crowns.
However, Prague insists that Metrostav does not interrupt the construction of Blanka. She did not say how she wanted to achieve this. At the same time, I still don’t know how to legally pay the company’s debt. The construction was announced last week by the company.
“Unfortunately, no agreement was reached, and therefore both parties agreed that Metrostav is requesting reimbursement of the invoiced work at the arbitration court, in summary proceedings,” said Polák. He noted that negotiations with the management of the municipality in order to find a satisfactory way out.
Problems with paying the invoice for overtime appeared a few months ago and Prague’s debt gradually climbed to more than 2.1 billion crowns. Metrostav therefore announced last Wednesdaythat construction will stop on December 7. The city management then responded by announcing that the contract with the company was invalid from the beginning. The city says it has the money to build it, but doesn’t know how to pay it legally. According to Polák, therefore, Prague wants to extend the subject matter of the dispute by assessing the validity of the contract between the city and the company.
According to the municipality, the only possible solution is to complete, take over and pay for the construction. He wants to achieve this regardless of whether the contract with Metrostav is valid or invalid. How he wants to achieve this, but the city did not say. “We continue to hope that Metrostav will meet the capital of Prague and will not stop working,” the statement said. It is still unclear whether the company will actually stop building the tunnel next Saturday.
At today’s meeting, representatives of the company and the city reiterated earlier views. While Prague continues to question the validity of the contract, including its amendments, according to the construction company, they are valid and are considered to be the valid contractual basis of the entire legal relationship. According to the current management of Prague, in 2006 and 2007 the council approved only the construction contractor, but only the contract. According to some legal interpretations, therefore, contracts and amendments may be invalid, and the city therefore claims that it cannot pay the money.
Prague justifies the invalidity of the contract by the fact that they were not part of the board’s resolution and were not discussed by the council. The contracts were signed in the era of the expressor Pavel Bém (ODS). The construction of the Troja Bridge is also problematic, which is part of a complex of buildings. Most do not have a proper contract. In addition, the original price of half a billion has increased to an estimated 1.2 billion crowns.
Visualization of the Blanka tunnel
There are other problems with the construction. According to reports from the municipal control department, for example, the amounts in the list of documents for individual constructions submitted by the accounting department and the amounts maintained by the city investor’s departments do not match. The difference in amounts for the construction part is up to 400 million. “Due to these discrepancies, the accounting may prove to be incorrect, incomplete, inconclusive, incomprehensible and confusing,” reads the material of the Department of Control Activities, which is available to ČTK.
The Blanka tunnel was originally supposed to be put into operation in 2011, but the deadline was postponed to spring 2014. The price of construction work and technology was to be around 26 billion crowns, but now there is talk of an increase of more than ten billion. Prague estimates the annual cost of stopping and conserving the building at 1.6 billion crowns.
The construction of the Blanka tunnel was approved by Prague in the late 1990s |
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Mid 90s – Prague decided between three variants of the northwestern part of the city’s ring road under the names Dana, Hana and Blanka. In the end, the last mentioned version was given priority, the route of which leads from large parts below Stromovka. |
June 2001 – The cost of building the northwestern part of the inner ring road of Prague was estimated at 16 billion crowns. |
September 2003 – The city has considered involving private investors in financing the construction of the Blanka complex as part of a public-private partnership. In this context, Councilor Radovan Steiner estimated the construction costs at more than 20 billion. |
December 2004 – Refined cost estimate for the north-western part of the circuit by 22 billion |
September 26, 2006 – Prague councilors selected the winners of the tender for the construction of Blanka. It became Metrostav, which offered a price of 21.2 billion crowns with VAT. Another roughly three billion was to cost technology or track possible home movements. The construction work was to be completed in 2011. |
June 2007 – At Letná, the workers started preparatory work before digging the tunnels, and work had been done in Troja since the spring. |
May 20, 2008 – The soil in Prague’s Stromovka collapsed due to the construction of a tunnel, a similar accident occurred in the park five months later. The last tunnel under construction collapsed in July 2010, at the Ministry of Culture in Prague 6. |
June 19, 2008 – The then mayor Pavel Bém (ODS) said that he would work 50 hours in favor of the Auto * Mat association if the complex Blanka costs more than 25.7 billion crowns. Activists at the time estimated that the price would be about 15 billion higher. |
November 2009 – The company IDS, which manages the construction of Blanka for the city, admitted that the construction of the entire complex is 13 months late. The opening date was to be December 2012. |
January 12, 2010 – The first tube of the tunnel was completely pierced; the last excavation ended in July 2011. |
February 11, 2010 – Metrostav informed that the change in the amount of VAT will increase the Blanka complex by about 700 million crowns. |
February 2011 – The new mayor Bohuslav Svoboda, who came to the head of the municipality after the elections in the autumn of 2010, stated that Blanka will become more expensive by about ten billion crowns. Increase to 37 billion eligibility of additionally added part of the construction (five billion), more expensive technology (billion) or inflationary valorisation (3.5 billion). |
August 9, 2011 – Deputy Mayor Karel Březina (ČSSD) said that the tunnel should start operating in the first half of 2014 (later the date of May 1, 2014 appeared). The reason for the postponement was the financial difficulties of the city. |
October 2011 – The management of Prague announced that it had negotiated a reduction in construction costs, but the city would still pay at least 36 billion crowns for the tunnel. According to Březina, savings were found in suppliers and in the requirements of, for example, city districts. |
May 2012 – The city stopped paying Metrostav invoices for Blanka. The reason was a significant increase in price and fears of the city management from a possible conflict with the Public Procurement Act. |
December 2012 – Prague councilors approved the categorization of the invoice for Blanka, so we wanted to deal with growing debts. They divided the invoices into three groups according to the severity of the problem; by this summer, Prague had paid out about half a billion crowns to Metrostav. |
September 17, 2013 – There has been information that councilors’ decisions on categorization are being scrutinized by forensic scientists. |
November 20, 2013 – Metrostav announced that it will suspend the construction of Blanka on December 7, because the municipality already owes it over 2.1 billion crowns. Mayor Tomáš Hudeček (TOP 09) then stated that, according to the city management, the contract with Metrostav was invalid from the beginning, as it was never negotiated by either the council or the council. |
November 29, 2013 – Metrostav did not agree with the Prague City Council on resolving the problems associated with the construction of Blanka. The company will take the case to court, where it will want to get the invoice paid out to about 2.1 billion crowns. |