The new ETI building was never built. After years, all that remained were costs and consequences amounting to tens of millions of crowns
PRESS RELEASE ON AUDIT NO 23/28 – 25 AUGUST 2025
In 2014, the Electrotechnical Testing Institute (ETI) began preparations for the construction of a new building, even though it did not have secured financing for the project – it relied on a subsidy, the conditions for which it did not meet. It continued with the preparations despite the tense financial situation until the project was finally halted in 2020, even before construction began. The result was an uneconomical and ineffective expenditure of CZK 17.9 million on preparations and tens of millions more in costs associated with dealing with the consequences of the unrealised project. The failure of control mechanisms on the part of the company and the Ministry of Industry and Trade (MoIT) contributed significantly to the misconduct. The findings are based on an audit focused on the activities of the ETI, the Technical and Test Institute for Construction Prague, and the MoIT as their founder.
The ETI began preparing the project in 2014. Its goal was to demolish the old testing building and construct a new building with specialised laboratories. The estimated costs were expected to exceed CZK 420 million. The company originally planned to cover most of the costs through a subsidy from the Research, Development and Education operational programme, but in mid-2016 it discovered that it did not meet the conditions for obtaining it. Although the company did not have sufficient resources, the management decided to continue with the preparations and adapted the project for a different subsidy title. However, the ETI did not meet the conditions in this case either, as it did not have a valid building permit. From 2018 to June 2020, when the project was finally halted, the company spent CZK 17.9 million on project preparation. However, this money did not yield any results, and according to the Supreme Audit Office (SAO), it was therefore spent in an uneconomical and ineffective manner.
Of the entire ETI project, only the partial demolition of the old building was carried out, at a cost of CZK 8.8 million. However, this intervention necessitated measures to ensure the stability of the neighbouring property. The company has already paid more than CZK 29 million for the related work and will have to spend at least another CZK 31 million.
According to the SAO, it should have been clear by the end of 2016 at the latest that the project was not feasible due to its high financial cost, the financial situation of the ETI, and the failure to obtain a subsidy.
The project was supposed to provide sufficient space and enable the company's development, but in reality, the opposite happened. Not only were the new premises not built, but the whole situation placed a financial burden on the institute, which severely limited its further development. At one point, the situation was so serious that the ETI management considered setting up an overdraft facility to pay employees' salaries.
The failure of control mechanisms contributed significantly to the project continuing despite the obvious lack of resources and high risk of an unfavourable outcome. The MoIT, as the founder of the company, knew about the intention from the very beginning, yet failed to intervene at crucial moments. The ETI Supervisory Board approved the preparation without analysing the impact on the company's finances or verifying the realistic financing options. At the same time, between 2019 and 2023, the MoIT did not make use of its legal option to carry out its own audits in state-owned companies and relied solely on the activities of the supervisory boards. In this respect, the MoIT did not properly fulfil its obligations as founder.
From the perspective of the SAO, both audited state-owned companies fulfil the purpose for which they were established—they provide professional services in the field of testing, inspection, and certification. However, it turned out that the ETI owns a company that has not been active since its establishment in 2014. The costs of its establishment and administration amounted to CZK 179,000.
Communication Department
Supreme Audit Office