Czechs face rejection of EU water treatment support bids

Czech councils' rush to sign long-term water treatment contracts with private firms may cost them dear in terms of missed EU support

Politics & Policy|Energy & Green Biz
Chris Johnstone | 03.02.2012

European Union (EU) grants for water treatment plant projects put forward by 21 Czech councils, including a major project advanced by Prague City Council, have been rejected by Brussels the daily Mladá fronta Dnes reported Friday. Originally, EU support totaling Kč 10 billion for twice that number of treatment plants was under threat, the paper said.

Czech councils ran into problems trying to pump EU funds so that they could meet strict water quality standards because of grant rules specifying that support should be offered to predominantly publicly operated water treatment companies.

Many Czech water treatment operations, such as those in Prague, no longer fully fall under that category after town halls sealed long-term contracts with private companies to carry out the work. In the case of the Czech capital, the contract with French utility giant Veolia was for far too long, until 2028, and had been originally mired in controversy over the way it was landed and then extended. Competitors said Veolia was able to make an inflated bid for fulfilling the original contract on the understanding that a follow-up extension would follow. Rival companies had to bid without being given any hint of such an advantage.

Brussels offered Czech councils that curtailed the duration of water treatment contacts with private companies the chance of still qualifying for the substantial EU grants on offer. Those private contractors, of course, have had little reason to amend their lucrative deals with the full cost of the improvements in those areas now falling fully on local users in the form of higher charges.

Mladá fronta Dnes pointed out that the final list of councils failing to qualify has to be approved by the committee at the Ministry of Environment responsible for oversight of the plant improvement program. Changes in that final list are very unlikely, it added.

Prague obtained a derogation from the strict new EU water quality rules for all councils with populations of more than 2,000 inhabitants that came into force in 2011 but now faces a severe problem from the fact that it has not even begun to start construction of new treatment facilities. Heavy fines can be imposed for failing to meeting the EU demands. 

See related story: Prague fails to secure EU subsidies for water treatment plant 

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