For example, in Zvolen in the Central Bohemian Region, the local club is building a new playground with an artificial surface. He received a four million subsidy for the project from the Ministry of Education. The remaining amount – 1.6 million crowns – is promised by the municipality. The management of Zvole also acquired a plot of land on the square, where a new municipal office should be established.
Mayor Miroslav Stoklasa calculated that the municipality lost 1.4 million crowns in tax revenues for May and June. Zvole plans to release the money for the playground later this year, and the construction of the office will not start until next year.
In Veltrusy in the Mělník region, they have several plans for construction. For example, the cultural hall is to be transformed into a modern medical office for children and adults. But even here, they expect to have to wait for some projects from next year. The current ones pay mainly from savings. Like other municipalities, they are now waiting for a contribution to compensate them for the outage.
“The compensation bonus changes from 1,200 per capita to 1,250, so that we don’t send 1,200 and then fifty, we’ll wait for Senate approval and the president’s signature,” Schiller explains, adding that she considers it realistic to complete the whole process by early August.
“This is an amount that was concluded by a compromise, it means nothing to small municipalities, it seems superfluous to large municipalities,” states Communist Chairman Vojtech Filip.
According to the first deputy chairman of the ODS, Zbyněk Stanjura, the money should have come to the municipalities. “I firmly believe that they will send it to them in the coming days and that they will not wait until August,” he comments. Ondřej Veselý, vice-chairman of the coalition of the CSSD, also appeals for the fastest possible delivery of funds: . “
In total, over 13 billion crowns will be distributed among the municipalities from the state budget, and they can use this money at their discretion.
Regions do not need to have money for bus transport, the Austrian emphasizes
Similarly, some regions are demanding compensation for the fall in tax revenues – specifically the amount of 500 crowns per person. The same proposal is also being prepared by senators. Otherwise, in some regions they are talking about cuts and part of the opposition has the same concerns. “It’s also about the basic expenses. Some regions will really get into trouble so that they can, for example, demand bus transport, “points out the head of STAN, Vít Rakušan.
“If someone can kick-start the economy, it is the regions and municipalities that have projects ready,” believes Pirate Chairman Ivan Bartoš, adding that the state cannot implement large projects in a hurry.
However, the administrator of the state coffers is against the one-off contribution. He argues that the regions will receive money for, among other things, road repairs, social programs or rewards for health professionals. “I think thanks to the compensation bonus, they get much more than the outage meant,” says Schiller.
While some regions would like to see the contribution, their association as a whole does not have such a requirement and does not even plan to cover it.
The construction industry is in decline, the lack of public procurement will endanger mainly small companies
Lower budgets of regions and municipalities due to the coronavirus crisis will also be reflected in public construction contracts. Analysts expect their decline by more than a fifth. The year before, their volume exceeded sixty billion crowns.
This could be especially problematic for small construction companies. According to the data of the Ministry of Industry, these are the most frequently applied for contracts of municipalities and regions. There are currently almost 180,000 of them in the Czech Republic; according to estimates, up to a third of them could disappear due to lack of work.
Due to the lack of funds, municipalities could postpone, in particular, road repairs or planned minor constructions and reconstructions. The construction industry is already experiencing a slowdown in the Czech Republic. In April, it fell by more than four and a half percent year on year, in May the decline was even more pronounced and the sector lost 7.6 percent.
The biggest drop in orders should manifest itself in about a year, when the current ones run out. It is for this period that the company Stavby RUFA from South Moravia, for example, has contracted work. Half of the orders are for municipalities. “We mostly do reconstructions of existing buildings or we focus a lot on communications,” says Zdeněk Růžička, the company’s director. In the event of a failure of public procurement, the company would have to focus more on the private ones, but even those are not certain at the moment.
“If this crisis is nationwide or worldwide, even private investors will not have enough money. There may be restrictions on production, construction and layoffs, “says Růžička. According to analysts, such a decline in the construction sector would endanger the work of tens of thousands of people.