The financial aid for recreational navigation is lagging. Projects were delayed, burdened by frequent changes and increased costs.
Press release on audit No 21/03 – 28 March 2022
The Supreme Audit Office (SAO) examined the financial aid for recreational navigation between the years 2014 and 2021. The auditors focused on the Ministry of Transport (MoT), which was responsible for managing funds for recreational navigation and which approved projects eligible for aid. The auditors also examined the Waterways Directorate of the Czech Republic (WDCR) and the state enterprise Povodí Vltavy (i.e., Moldau River Basin), which were responsible for specific projects. The SAO examined a sample of 13 projects worth more than CZK 5.1 billion. The audit revealed that the Ministry of Transport did not have an effective system of managing funds and approved under-prepared projects that were delayed and often accompanied by a large number of changes, which led to increased costs. Furthermore, the MoT did not follow the agreed schedule according to which funds were to be allocated first to the most important projects with the greatest benefits. The MoT failed to evaluate the true benefits of the projects. The SAO also found a possible breach of budgetary discipline amounting to almost CZK 86 million.
An example of an insufficiently prepared project approved by the Ministry of Transport was the completion of the Vltava waterway between the towns of Hněvkovice and Týn nad Vltavou. The WDCR prepared the project, at an expected cost of CZK 294 million, on the basis of imprecise supporting documents. The construction was to be completed in 2014, but due to the large number of changes during the construction process, the project was not completed until 2017. This situation led to a decrease in the share of European subsidies used to finance the project from 85% to 45%.
Moreover, the benefits of this project are limited due to the fact that the MoT approves projects on an individual basis as opposed to approving them in the context of comprehensive transport solutions. In this case, the delay in addressing Vltava’s navigability under the Kořensko lock chamber and the failure to start works to heighten the bridge in Týn nad Vltavou illustrate the limited benefits of the projects. The two aforementioned projects are related – their completion is necessary for the navigability of the entire section.
Delays and cost increases can also be illustrated by the project for the construction of a ship hoist facility on the water dam Orlík which has not been launched yet. The estimated costs have increased from CZK 360 million to almost CZK 2 billion, that is more than five times, since the start of the project in 2008. At the same time, the construction of a ship hoist facility on the water dam Orlík together with a ship hoist facility on the Slapy Reservoir is a prerequisite for completing the navigability of the entire length of the river Moldau for recreational navigation.
The audit also revealed that the system for allocating responsibilities between the WDCR and the state-owned river basin enterprises is both complicated and difficult to coordinate in practice. This led to some constructions being postponed — for example, the modernisation of the Litoměřice port facility had already been approved by the MoT in 2010, but the start of this modernisation was delayed by the WDCR until 2021 because the construction was not prepared in terms of property law.
The SAO also identified problems in public procurement. In 2013, the WDCR concluded a contract for the construction of a berth for passenger water transport in the Lower Elbe for approximately CZK 74 million. However, the WDCR submitted to the auditors incomplete documents — without properly completed information, signatures and so on. The WDCR explained that it was unable to provide any other documents. However, in doing so, it breached the Public Procurement Act and the SAO considered this to be a suspected breach of budgetary discipline.
A breach of the Public Procurement Act and the resulting suspected breach of budgetary discipline were identified by the SAO also in the case of another project amounting to more than CZK 11 million.
Communication Department
Supreme Audit Office