SAO audited funds provided to Czech Railways to settle the loss emerging from the public service commitment in the public passenger transport service
Press Release – July 1, 2010
From September 2009 to March 2010, auditors from the Supreme Audit Office (SAO) scrutinized state budget funds amounting to CZK 11.5 milliard, which had been provided by Ministry of Transport for the public service passenger transport service within the period from 2007 to 2009. Auditors also aimed at the systems of providing and utilization of the state budget funds amounting CZK 3 milliard, which the Ministry provided in 2009 to settle the loss emerging from the public service commitment in the public passenger railway transport service.
“In comparison with previous audits, some improvements have occurred, namely in defining the public transportation needs, transparent presenting of the loss, and lowering difference between the loss presented by the Czech Railways and the amount of compensation. On the other hand, auditors found recurrent errors that had influenced the expediency and efficiency of the provided funds’ utilization“, said president of the SAO František Dohnal.
The Ministry kept ordering progressive transport services but it did not have a positive effect on the quantity of passengers or earnings. Within the audited period, the loss emerging from the public service commitment thus increased by 15 %. The only provider of the transport services was Czech Railways as the Ministry did not invite tenders to compete for any of the transport lines. The only two attempts for such competitions ended up in unfair practices.
“In spite of the fact that the legislature for the public transport services and their settlements had been constantly changing, the Ministry contracted Czech Railways without a competition to provide the public passenger transport service in the period 2010–2019 and fixed the existing system for the future. The Ministry negotiated for repurchasing the rail vehicles from Czech Railways, but such a condition would eliminate future competitions’ applicants, which could be competing for up to 75 % of agreed services”, said Dohnal.
In reaction against the 25 % growth of the loss in public transport the Ministry increased the endowments. In 2009, the Ministry provided funds for regional public passenger transport services, which should have been ordered and settled by regional authorities. In comparison with 2006, amounts of endowments from the state budget increased by CZK 4.4 milliard.
“The Ministry failed to check the accuracy of presentations of the loss that had emerged from the public service commitment in the public passenger transport service. Such a conclusion was stated in the previous SAO auditing operation No. 06/07 as well“, said Dohnal.
The auditing operation was included into 2009 Audit Plan of the SAO under No. 09/23. Jiří Adámek, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Bc. Radka Burketová
Press Speaker
Supreme Audit Office