Prague - Companies in the Czech Republic obtained public contracts worth Kc237.3bn in total last year, a drop of 10.5 percent compared with the year 2012 and the lowest value in the past three years, an analysis released by company CEEC Research has shown.
Ruce. Podání ruky. Podání rukou. Potřesení rukou. Obchodní kontrakt. Manažer. Ilustrační foto. ČTK C3574 Michael Rosenfeld
The analysis is based on the latest data in the Czech information system of public procurement.
The value of public procurement was Kc30.4bn higher in 2011 and Kc28bn higher in 2012 compared with last year's value, CEEC Research head Jiri Vacek said.
In contrast, the number of public contracts awarded to companies rose by 39.8 percent year-on-year to a record 15,438 last year.
The number of awarded contracts increased in all the categories of public sector organisations because the scope of the contracts widened significantly after the public procurement law was amended with effect as of April 2012.
The limit on below-threshold contracts, that is contracts below a certain value, for the supplies of goods and services dropped from Kc2m excluding VAT to Kc1m and the limit on below-threshold contracts for construction work dropped from Kc6m excluding VAT to Kc3m after the amendment.
The value of awarded contracts increased only in the category of ministries and other national institutions, the analysis showed.
"Overall, organisations mostly awarded a higher number of contracts but the financial value of the contracts was lower," Vacek said.
Among the most active public sector contracting authorities in terms of the number of contracts were regional and municipal authorities which accounted for 43 percent of contracts.
These investors include regional governments, municipalities, local authorities and road maintenance companies, for example.
One-third or contracts were awarded by other entities such as fuel distributor CEPRO, power grid operator CEPS or rail operator Ceske drahy, as well as by schools, hospitals, church institutions and various associations.
This segment accounted for more than a half (53 percent) of the value of public procurement last year and was the biggest public sector investor in terms of financial value.
The difference between the expected price of a public contract and the final price increased markedly last year. The final prices of contracts were up to one-quarter lower on average than was the price expected by investors. In 2012 the difference was 16 percent.
Another problem was the fact that public sector authorities cancelled a large part of tenders they had already declared.
They abolished about 14 percent of the volume of declared tenders worth Kc47.4bn last year compared with 22 percent (Kc68.3bn) in 2012.