Czechia Strengthening Position In Urals

06.11.2009 — Analysis

The Czech Republic is developing new spheres of cooperation with the Urals regions. The collaboration may start in the sphere of medicine in addition to such traditional sectors as machine building, metallurgy, and energy. Miroslav Kalous, the Deputy Minister for Regional Development of the Czech Republic, spoke about new projects on the Urals-Czech horizon in an interview to RusBusinessNews.

- Mr Kalous, the possibility of a Czech company supplying medical equipment to the Urals is being currently discussed. What sort of equipment is it and how good a future is in this sector for both parties? 

- PROTON THERAPY CENTER CZECH presented its project for the establishment of Joint Proton Therapy Centre in Prague, the construction is planned to be completed in 2010. The proton therapy at the moment is successfully used for the treatment of certain oncological diseases, including ophthalmic tumours. Compared to other types of radiation treatment, this one has fundamental advantages – the beam of protons can be aimed directly at the tumour, thus leaving healthy tissues unharmed. This treatment method will become commonplace in about 10 years time. As far as I know at the moment it is used only in China, Germany, France, Sweden, and the US.

During the negotiations held in Ekaterinburg the Czech company offered its services in the supply of proton radiation equipment to the Sverdlovsk Oblast Oncology Centre. I would like to point out that this is not Czech equipment, it is made in Belgium. According to experts this technology may become a good addition to the tumour treatment methods the Centre already has.  

- If the deal does go ahead, the finance will be provided by the Czech Export Bank, will it not?  

- It is expected that, like in the situation with metallurgic and machine building projects, the financial issues will be resolved with the participation of the Czech Export Bank. It has to be stressed that this meeting is just a first step which will be followed by the lengthy procedure of consultations and the comprehensive examination of the new project. The loan from CEB will only be issued after it is insured by the Czech state owned insurance company EGAP. Of course, the proton radiation equipment will not come cheap...  

- Can you tell us the approximate cost of the equipment?

- I wouldn't like to talk about the price just yet. My experience taught me that once a particular sum is known, everybody starts thinking about where and how to find the money. This kind of talks slows down the implementation of any project.

- The Czech Export Bank has already taken on the obligation to issue syndicated loans for the implementation of investment projects in the Sverdlovsk Oblast up to the sum of two billion Euro with the repayment period of 10 years. Are the promises being kept?  

- The financing is ongoing, some of the projects are already being implemented, and others are in the preparation stage. Each project is carefully checked from the point of view of economic viability. This kind of prudence would help avoiding problems for both the Czech and the Urals parties. Moreover, in order to be able to use Czech Export Bank's loans one important condition must be complied with – no less than 50% of equipment involved in the investment project has to be purchased from Czech companies. In all other respects Russian investors are free to do as they please. This scheme proved very effective during the crisis. It is impossible to overcome financial instability just with the exchange of commodities; the methods to counteract it are the implementation of new technologies and creation of new jobs.

Czech investments will not remain unmatched, Russian companies are also moving into our market. The Ural Mining and Metallurgical Company bought 51% of shares in the aircraft building plant Aircraft Industries a.s. in Czechia. Czech machine building plants have also been attracting Russians’ attention. These all are examples of healthy collaboration on the basis of economy. The Russian President Dmitry Medvedev has recently met with the Czech President Vaclav Klaus. During the talks they confirmed the openness of the energy sector of the Czech Republic. This means that Russian companies can take part in tenders held by energy companies in our country.  

- This year the cooperation of the Sverdlovsk Oblast and Czechia has been clouded by the delay in payment of the billion worth credit issued by CEB to Uralvagonzavod (Urals Railway Car Plant) for the purchase of ALTA equipment. Has this situation been resolved? 

- All problems with Uralvagonzavod have been resolved in a timely manner, thanks to the efforts of all parties. I have to stress the positive role the Sverdlovsk Oblast’s leaders have played. There are no serious controversial issues outstanding at the moment. Time will tell how the situation is going to develop in the future.  

- Due to the very active development of the bilateral connections do Czech banks consider coming to the Urals? 

- Key Czech banks do already have representations in Moscow. And, as far as I know, they do take part in the projects of financing exports. We have to take into account, however, that unlike the Czech Export Bank these are private companies so they are under no obligation to inform the State of their activities. So far we have not heard anything of intentions of Czech financial institutes to come to the Urals. 

- What other spheres are in the plans for the Urals-Czech cooperation? 

- There are many spheres for the Czech-Urals cooperation. If we begin with the generally important ones, these are machine building, metallurgy, energy sector, and glass making. Transport sector also has a future, in particular the renovation of trams and locomotives. The Czech Skoda plant is a well known manufacturer of such vehicles, it can offer services in their modernization. An interesting project is planned for the services sector - STOMIX, a Czech company, offers home and office heating solutions.

The offers from Metrostav may also be interesting for Urals people. This is the company that constructed the underground system in the Czech Republic. Of course, this may be not that urgent for Ekaterinburg, but the company is looking for various types of cooperation in other Urals regions as well, for instance in the Chelyabinsk and Omsk Oblasts. There may be some new projects within the framework of the implementation of the Memorandum between the Sverdlovsk Oblast and the Plzen Region signed in May 2009.

The most recent news in the sphere of our cooperation is the energy project, the construction of new generation capacities at the Novosverdlovskaya HPP. Czechia’s PSG-International a.s. jointly with TGK-9 (Territorial Generating Company №10) are planning the construction and the start up of a combined cycle unit. The planned power output will amount to 250 MW. If all is well the construction will start before the next summer, each megawatt will cost about a million Euro and the total amount of investment will reach about 250 million Euro.

On the whole the field for the Urals-Czech cooperation is vast, it includes all spheres of life; It seems to me, however, that both the Urals and Czech parties must not spread themselves too thin, especially in the conditions of financial crisis, all the planned projects should be implemented without undue rush.  

- The opening of the CzechTourism office in the Urals has been discussed for quite some time now, what is being done in this respect?  

- Thank you for asking me this. My current visit, as well as the presentation of the medical equipment, pursued another goal – to prepare for the opening of the representative office of the Czech State Tourist Agency CzechTourism in Ekaterinburg; we have found an appropriate office space. The future director of CzechTourism is already in the Urals capital and is working on current issues. The representation itself will start working in the beginning of next year. The key goal of the office will be the support of the "tourist air" between the Urals and the Czech Republic. 

It is necessary to pint out that opening of the new CzechTourism office is happening at the same time as Malev discontinues running the Ekaterinburg-Budapest flights. The Czech Republic still retains a stable interest amongst Urals tourists. In 2008 the Consulate General of the Czech Republic in Ekaterinburg issued about 26 thousand visas, a reduction by about a third is predicted for this year which is not surprising at the time of crisis. These predictions might have to be corrected by the forthcoming Christmas holidays, during this time we always see a high influx of tourists.