New town hall for Prague 7 to ‘bankrupt’ district

The Christian Democrat (KDU-ČSL) chairman for the Prague 7 district says the tender process related to the construction of a new Town Hall, agreed by councilors from the Civic Democrats (ODS), Social Democrats (ČSSD) and Communists (KSČM) parties, was “irregular” and the “overpriced” project will bankrupt the town council.

“At a [projected] cost of nearly Kč 1 billion, the new Town Hall project for Prague 7 is overpriced. It will be something like the Sazka arena was for Sazka,’’ KDU-ČSL’s Jan Čižinský said in a statement, alluding to the construction of the stadium that led the betting firm to bankruptcy.

Prague 7’s lease on the office space for which it now pays Kč 10 million per year, or roughly three percent of its annual budget of Kč 334 million, expires in 2012. Čižinský charges that the ODS, ČSSD and KSČM representatives on the council have pushed for a “tender without fixed criteria” and at the same time rejected bids without clear justification.

As Czech Position reported earlier, the Prague 7 district has been searching for a new location for its Town Hall for over 17 years. In the latest round, the district failed to spell out its exact needs (type of building it needed, lay out, required access to forms of transport, etc.) and left the decision in the hands of Cautor Consulting, a firm with no directly relevant experience or expertise, which got the contract without a tender. ‘The only two proposals examined in depth were those of the Argentinean Star for Kč 762 mln and the Mercury Tower building for Kč 845 mln.’

Of the eleven offers that Prague 7 received, two were short-listed: PPF Real Estate’s Argentinská hvězda (Argentine Star) project and the Mercury Tower project, which is 90 percent owned by the Austrian company REWO with the remained held by the Cyprus-based company Miracle Diamond.

“The only two proposals examined in depth were those of the Argentinean Star for Kč 762 million and the Mercury Tower building for Kč 845 million,” Čižinský complained, adding that only if the city district was buying the land under the building would it be a solid investment, but “that is not happening.”

Neither does the district have the money, he said. “Even if Prague 7 uses all of the resources from the privatization of municipally owned housing stock and sells all its land holdings, it would not be enough to pay for half [of the new Town Hall],” the KDU-ČSL district leader said. “The loan will be for some Kč 1 billion and take 20 or even 30 years to pay off.”

Councilors are finally set to choose an option this coming Monday (Dec. 5) with the moving date set for 2015. KDU-ČSL is not currently represented in the lower house of the Czech parliament, but has won seats at the municipal and regional level.

See related article: Prague’s biggest real estate tender could fail again