In five years, the state has not paid out any subsidies on the high-speed Internet. Broadband Internet coverage increased only thanks to investments from entrepreneurs.
Press release to audit No 19/15 – 1 June 2020
The Supreme Audit Office (SAO) scrutinised subsidies for the high-speed Internet connection between 2015 and 2019. The Ministry of Industry and Trade (MoIT) planned to pay out subsidies from EU funds amounting to CZK 13.8 billion. By 2023, it wanted to secure a high speed Internet connection for 77% of households. But as early as 2018, thanks to investments from entrepreneurs, 90% of households had been covered without the state aid. The Czech Republic is above the European average in this regard. Moreover, the MoIT has not paid any subsidies in almost five years due to a poorly and insufficiently prepared state aid scheme. Half of the planned funds was thus shifted to other operational programmes.
The MoIT launched the first call for applications from the High-Speed Internet programme in March 2017, two years after the programme was approved. The announcement of the call for applications was delayed mainly due to the fact that the Czech Republic did not have the National Plan for the Development of Next Generation Networks ready by 2016. However, this was a precondition of the European Commission for receiving aid. It took two years to prepare the plan and it was accompanied by a dispute between the MoIT and the Ministry of the Interior on the provision of subsidies.
At the time of the announcement of the first call, however, household coverage by high speed Internet was close to the target of 77% originally set, thanks to investments from entrepreneurs. The interest in subsidies was low. Only three interested parties applied for the subsidy. Based on the recommendation of the European Commission, the MoIT could not allocate subsidies to these applicants. The MoIT did not respect the condition that aid had to be directed only to areas where there was no coverage and where entrepreneurs did not intend to build networks in the next three years. The MoIT had obsolete data when preparing the call, so it did not single out areas of the Czech Republic, which already had the high-speed Internet coverage.
The MoIT announced the second call for grant applications in February 2019, almost two years after the first call. The Ministry had prepared the call better than the first one. Forty candidates submitted their applications for state aid which exceeded the sum of CZK 1 billion allocated for this call by 11%. Most of the applications were submitted by one company. At the time of the SAO audit, the applications were being assessed and the MoIT did not issue any decisions on granting aid.
The MoIT did not pay out any subsidies on high-speed Internet even after five years. With the agreement of the European Commission, almost half of the CZK 13.8 billion earmarked for this programme was transferred by the MoIT to the Integrated Regional Operational Programme and to the operational programme Environment.