Ministry of Transport and subordinate organizations have removed the deficiencies from the last audit, but the state has paid tens of millions more because of protracted problems

Press release on audit No. 17/32 – 30. 7. 2018

The Supreme Audit Office scrutinized the management of the Ministry of Transport (MoT) and its subordinate organizations of the Railway Inspectorate, the Rail Authority, and the Directorate of Waterways of the Czech Republic (DoW) between 2015 and 2017. Auditors focused mainly on the costs related to the activities of these organizations, for example legal and advisory services, material consumption or wages, and also how organizations administered the state property. They also examined how the MoT and the DoW had acted to remedy the deficiencies described by the SAO's previous audit in 20141. There were no serious shortcomings found in the audit, except for several problems that have been dragging on for many years. These concerned a disadvantageous contract, which meant a burden of more than ten million crowns extra for the state, and a protracted property settlement related to the location of a motorway.

In 2009, the Directorate of Waterways entered into an onerous contract with a private company to cover the costs associated with the operation of a siding on the Kolín - Nymburk railway line. Under this agreement, the company invoiced CZK 36 million which the DoW refused to pay although it did not have a relevant reason. The DoW lost subsequent litigation and because of fines, default interest, and court fees, it was obliged to pay a total of CZK 100 million.

Another example of mismanagement of funds concerns the protracted property settlement of land ownership on which the motorway in Prague - Slivenec was built. The process of the settlement had dragged on since 2000, and the state was only able to buy the land after long 17 years. During this time, the MoT had paid its owners for unjust enrichment of the state and court costs over CZK 47 million. If the property settlement had not lasted for so long, the state would have paid substantially less.

The auditors also verified how the MoT and the DoW had fulfilled their obligation to take corrective measures to address the shortcomings revealed by the SAO's previous audit. The audit showed that the audited organizations indeed had implemented these measures, for example, the Directorate of Waterways had managed to reduce operating costs, in some cases had also limited the use of external suppliers and, last but not least, it had moved from leased premises to the seat of the MoT.

Communication Department
Supreme Audit Office

1] SAO audit No. 13/33, see

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