The NKÚ criticizes the preparation of the construction of the Ústí judicial palace

Brno Justice Palace has become nearly 3 times more expensive

Ústí nad Labem - According to the Supreme Audit Office (NKÚ), the Ministry of Justice did not demonstrate the advantages of the so-called PPP project for the planned construction of the justice palace in Ústí nad Labem. NKÚ spokesperson Radka Burketová informed about this in a press release today. The project is supposed to ensure the construction and operation of the justice palace from private sources. The Ministry's stance is being investigated by ČTK.
According to Burketová, NKÚ has been monitoring the preparation of the project since 2003. The expected average payments from the state budget during the operation of the facility based on the concession contract, which would last for 23 years, are estimated by NKÚ to be around 410 million crowns per year. The payments include anticipated investment costs for the construction of the facility exceeding 1.7 billion crowns. By the time of the audit, the state had allegedly spent 48.9 million crowns on the preparation of the construction.
"The preparation for the construction of the justice facility has lasted for more than five years and has not yet been completed. The Ministry of Justice has not ensured its proper course, which may have negative impacts on the economy of the future construction and operation of the justice facility," claims NKÚ President František Dohnal in the press release.
According to him, the ministry did not prove the advantages of construction in the form of a PPP project. It was reportedly unable to provide supporting documents from which it would be possible to verify the correctness of determining the basic economic parameters, including the assessment of risks used in the financial analysis. He added that it also did not create prerequisites for effective management of the project team and control of the advisor's activities. According to NKÚ, the audit revealed that the ministry did not proceed transparently in the price adjustments of the contract with the advisor made in connection with changes to the subject of performance. It supposedly paid the advisor in full for activities that were not completed in full, and since August 2007 it interrupted his work on the preparation of the PPP project without concluding an agreement on further procedures or settling the contractual relationship in another way.
The Ministry of Justice's plan to build a new justice palace was approved by the government this spring. The Ústí justice palace is to accommodate around 600 employees from the regional and district courts, public prosecutor's office, and probation and mediation service. According to the approved plan, the building should rise between 2009 and 2012. The plan assumes that the investor would operate the facility for 25 years. Justice Minister Jiří Pospíšil said this spring that the ministry would pay 4.36 billion crowns for the building over this entire period, which is reportedly 401 million crowns less than if the construction were financed from the state budget.