Clarifying information about the situation at SŽDC presented by some information media


PRAGUE, 23rd February 2012 – Thursday´s issue of Journal E15 (23rd February 2012) included an article about the Railway Infrastructure Administrations (SŽDC), state organization presenting incomplete information and statements which might have been the product of misunderstanding on the side of the Ministry of Transport. Therefore SŽDC considers it important to clarify this situation. SŽDC is obliged to follow valid legal regulations, not any points of view or assumptions. Since we take it for wrong to fuel this by media targeted pressure towards SŽDC, we refuse to comment on further progress of those media issues, with the exception of the following information.

SŽDC proceeds in line with the rules of procedure – the minutes of the Management Board signed by the verifier and the chairman of the Management Board are obligatory

Pursuant to § 29 art. 2 Act No.77/2002, on Czech Railways, joint-stock company and the Railway Infrastructure Administration, state organization, the rules of procedure of the Management Board lay down details on the sessions and discussions of the Management Board. Article 5 of the rules of procedure specifies that the Management Board takes decisions within its resolutions. The resolution dealing with the amendment to authorities to sign for SŽDC has not been delivered to statutory representatives or the organization yet. Article 6 of the rules of procedure also specifies that the board meetings and adopted resolutions are noted in the minutes that are signed by the chairman of the Management Board (or when absent by an authorized member) and by one verifier. The minutes and the resolutions are sent to all members of the Management Board and relevant parties. SŽDC has not received the minutes and the resolution dated 9.2.2012. When signing the resolution, SŽDC proceeds in compliance with the Act on Public Contracts in line with a valid abstract of the trade register. The trade register specifies that the Deputy Director General acts and signs in full extent on behalf of the organization during the absence of the Director General, namely in an order specified in the trade register. Any other way of signing would result in allowing applicants´ suggestions on reviewing beneficiary´s acts by the Office for the Protection of Competition, say due to formal aspects. Immediately after receiving the written resolution of the Management Board, SŽDC sends a draft modification of the entries in the trade register to the Municipal Court in Prague. The resolution will be enclosed with the draft and filed in the collection of instruments at the registration court.

Within the Transport resort, SŽDC has the most transparent system related to awarding and implementing public tenders

The bids with all the big competitive tendering are assessed by an evaluation committee made up of representatives of the State Fund for Transport Infrastructure, the Ministry of Transport CR and others, which guarantees the independence of the evaluation committee in relation to the beneficiary of the public tender. Below you can find provable information (including legal justifications) on three competitive tendering cases for construction contractors which we believe were not presented unbiased by media.

„Modernization of the line Ševětín Veselí nad Lužnicí – 2nd part, Horusice Veselí"

The bidder was excluded pursuant to § 60 Act on Public contracts, for he failed to prove his qualification pre-requisites – namely the qualification of the supplier or the person who guarantees the qualification eligibility since he failed to submit:

1.         a copy of the certificate as amended by Regulation No. 50/1978 Coll., on Qualification in electrical engineering, as amended, to the extent pursuant to § 8 for personnel controlling tasks performed by suppliers and pursuant to § 9 for personnel performing revisions and

2.         a copy of the document on the qualification in electrical engineering pursuant to provisions of § 8 and Annex No. 4 Regulation No. 100/1995 Coll., which defines terms for the operation, construction and production of specified technical equipment and their concretization (Code of specified technical equipment), as amended, for an expert with higher qualification, regarding the part of public contract fulfilment related to installation, repair, revision and testing of electrical equipment, whereas this qualification is necessary for the fulfilment of the public contract in line with special legal regulations and is unconditionally requested for the implementation of tasks related to specified operation sets. The excluded bidder waived his right to object to the decision on exclusion.

„Optimization of the line Lysá nad Labem – Prague Vysočany, 1st construction“

The bidder was excluded pursuant to § 77 Act on Public contracts due to an exceptionally low price of some operation sets and construction objects, discovered on the basis of a detailed analysis of items related to construction objects and operation sets at the level of unit prices comparing the prices of the excluded bidder with the common prices. The exceptionally low price of these operation sets and construction objects was not clarified by the bidder, not even when asked by the evaluation committee to clarify in writing this exceptionally low price for the parts of the bid which are essential for the amount of the bid price. The bidder did not submit any suggestion on reviewing beneficiary´s acts at the Office for the Protection of Competition.

„Reconstruction of railway station Stará Paka for remote security control“

The bidder was excluded pursuant to § 77 Act on Public contracts since he failed to meet tender conditions. His bid, not even after his written explanation, did not indicate that the bidder would be able to ensure the implementation of the relevant part of the construction related to signalling installation in order to provide adequate operational continuity between the newly installed signalling installation and the current one already in operation in respective track sections leading to railway station Stará Paka. Bidder´s objections to the tender conditions submitted to the beneficiary state in article IV. point 25 that his bid was not complete as it did not include an outsourcing contract for the supply of some parts of the signalling installation, which is why the beneficiary should exclude it. In this case, the bidder did not submit any suggestion on reviewing beneficiary´s acts at the Office for the Protection of Competition either.  

As far as these three constructions are concerned, SŽDC proceeded in compliance with valid legal regulations. SŽDC managed to decrease originally anticipated cost of most constructions, which allowed preparing other projects to be implemented. As an example we can mention the construction „Thoroughfare in Pilsen junction in the direction of III Railway Transit Corridor, where the originally anticipated cost was reduced by nearly CZK 1 billion.

The progress cannot be stopped, even the company AŽD operates in competitive and transparent environment (SŽDC´s statement on the position of AŽD Praha, spol. s r.o.)

SŽDC as the operator of state-owned rail and in compliance with the Railway Act and agreements of the European Community, and on the basis of the so-called Transformation Act 77/2002 has been managing and developing the state-owned railway infrastructure since 2003. An inseparable part of the railway infrastructure is the system of signalling and telecommunication equipment. Dominant position of AŽD Praha spol. s r. o. (established in 1993) has been determined apart from other things by the takeover of the widespread technologies of the telecommunication and signalling equipment from its predecessor – an independent company since 1971. We stress that there are also other suppliers of the signalling and telecommunication equipment who win within the scope of transparent competitive tendering. Direct competitors of AŽD Praha include e.g. Starmon, SignalBau, První SaZ Plzeň, ATE Cheb; foreign companies e.g. Siemens or Scheidt & Bachmann GmbH. Further system fragmentation within all the Czech Republic could lead to technical incompatibility as well as to enhanced risk of rail accidents.

Transparent system of backward confirmation of an unwarranted salary part – applied to Ing. Pavel Habarta, SŽDC´s Executive Director appointed by the Management Board.

Before Ing. Pavel Habarta was entrusted with the leadership of SŽDC, the confirmation of the unwarranted salary part had been conditioned by the fulfilment of SŽDC´s business and finance plan and by the fulfilment of a specific strategic task set by the Management Board. These criteria were not standardized in any way.

Ing. Pavel Habarta after being appointed to the leading position of the company by the Management Board towards the end of 2010 introduced (in cooperation with the Ministry of Transport) a fully new set of measurable and transparent indicators and unambiguous rules (KPI) by which the confirmation of an unwarranted salary part is conditioned.

The Management Board has postponed the discussions on this point until the next meeting in order to study the submitted extensive documents which are necessary for the assessment of KPI indicators.


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