MPO wants to have a new administrative building constructed

Prague - The Ministry of Industry and Trade wants to have a new administrative complex built in Prague, which it will exchange for its 13 buildings located in the capital. This was stated today by Minister of Industry and Trade Martin Říman, according to whom the government should discuss the project by the end of May next year, and if approved, approximately 1,100 employees of the Ministry could be relocated to the new headquarters in 2011.
According to Říman, the contract will include not only the construction of a new building but also its operation. The Ministry plans to conclude a 30-year contract with the winner of a tender it aims to announce at the turn of 2009 and 2010. Thus, the Ministry will eliminate the risks associated with the construction and management of the new building. Additionally, the strategic partner is expected to pay the state the difference between the value of the 13 buildings it acquires and the value of the new administrative building. "It would be ideal if the balance were as high as possible in favor of the state. Our idea is that it should be positive. However, this will not be the only criterion," stated Říman.
According to him, the new administrative building will be two-thirds smaller than the spaces currently occupied by organizations under the Ministry. "The complex, with a total area of 25,000 square meters, will accommodate 1,100 workers. However, we also have a precise idea of the number of offices, meeting rooms, conference halls, parking spaces, and other details that we must know for the preparation of the concession agreement," added Říman.
According to Říman, the state will save thanks to the exchange of the 13 buildings for the new administrative headquarters. "The investment we will not have to make because of the project means a one-time saving of a quarter of a billion crowns. We will save at least 100 million crowns annually on operational costs. These savings will also be achieved, among other things, through the restructuring of our subordinate organizations, in which we will cancel 120 jobs," said Říman. For example, annual operating costs for the center will, according to the Ministry, be on average 20 million crowns lower than the current cost of operating the 13 buildings where state institutions are located.
The Ministry initially considered exchanging the 13 buildings for an already constructed administrative center. However, according to Říman, this tender would lack purpose, as there are currently very few suitable buildings in Prague. Ultimately, the Ministry opted for a project where the construction and operation of the central building for its officials will be entrusted to a private investor. According to Říman, current legislation does not allow for a classic exchange of these properties in similar cases.
Among the alternatives considered was the sale of the 13 buildings and leasing an administrative center. However, the Ministry abandoned this idea, as it would not be as economically advantageous for the state as collaborating with a private investor, according to Říman. "I personally cannot imagine how I would explain the fact that the state is disposing of 13 buildings in the center of Prague and receiving nothing in return, only a lease for 20 or 30 years. The state must receive some value for these 13 buildings," he stated.
Employees of the Czech Trade Inspection, CzechInvest, the Industrial Property Office, and the Assay Office are expected to move into the new building. A significant criticism, reported by Hospodářské noviny, came from government legislators regarding the Ministry. The Ministry adjusted its proposal, but reportedly, the changes did not address the main issues. These revolve around the fact that the Industrial Property Office, the Administration of State Material Reserves, and the Czech Mining Authority are independent and autonomous from the Ministry according to their statutes. According to the paper, this bureaucratic hurdle means that the Ministry cannot sell the buildings.
However, Říman asserts that the government can transfer the right to manage the assets of these three organizations to the Ministry. The second option is that the statutory representatives of the nine organizations whose property is involved in the real estate transaction will sign under the contract with the selected investor.