During this election period, Prague managed surpluses and low debt | Politics | News | Prague Gossip
In this election period, Prague managed billion dollar surpluses every year and at the same time paid off debt, for example last year it paid off the first of two bonds of the European Investment Bank of five billion crowns. The city representatives also recently approved that Prague will be able to take out another loan of up to 22.76 billion crowns for the construction of metro D.
The surplus was almost 16 billion last year
In 2019, the city’s economy ended with a surplus of 13.83 billion crowns, in 2020 it was 8.9 billion and last year it was 15.99 billion crowns. Higher surpluses were also caused by not using up all the money intended for investments. This is a common phenomenon in the case of the administration of the municipality and the Prague city districts, given, for example, the postponement of projects due to their longer permitting.
The budgets of the current city management compiled a summary of the first year of 2019, when the representatives approved a plan with revenues of 59.18 and will spend 77.57 billion crowns. In 2020, the approved budget included revenues and expenses of 83.8 billion crowns, and last year both items amounted to 87.8 billion crowns. The budget approved for this year includes revenues and expenditures of 92.6 billion crowns. Approved budgets are adjusted during the year on the basis of economic development.
Last year, the city paid back five billion
In recent years, the city has been reducing its debt, which reached 18.48 billion crowns as of December 31, 2020. Last year, the city paid off one of the two five-billion European Investment Bank bonds, the other is due next year. According to the municipality’s earlier information, the city’s indebtedness has been decreasing since 2014, the city’s biggest start was paid off in 2016, when Prague spent 9.5 billion crowns as a one-time payment for the so-called debt service.
The biggest investment that the city started in this election period is the construction of the new metro line D. It started in the second half of April this year with the construction of the section from Pankrác to Olbrachtová street. It is supposed to cost 14.5 billion crowns. Finally, the section will connect to Nové Dvory, and the last section will be the section to Písnice. The costs should be 52.09 billion crowns when inflation is taken into account.
The loan for the subway construction will be repaid over forty years
Precisely because of the construction of the subway, the city negotiated another loan framework with the European Investment Bank of 22.76 billion crowns, which was approved by the representatives at their meeting in June. The capital will be able to postpone installments for eight years and repay the principal for up to 40 years. He will be able to take out the loan in crowns or euros, and if he chooses euros, the interest will be set at less than two percent.
In the past, the city also borrowed from the EIB, which has the task of supporting important development projects in the countries of the European Union, for the extension of route A from Dejvická to Motola and route C from Nádraží Holešovice station, first to Ládví and later to Letňany.
At the same time, the city management wants to continue to negotiate with the state on co-financing large infrastructural constructions, which was not successful in the current election period. Of the large investments in the metropolis, the state finances only the outer circuit, which falls under the highway network. In the future, the city will thus have to find money for a number of large projects, in addition to metro D, for example for the completion of the unfinished inner ring road and other transport structures or the planned new philharmonic hall on Vltava.