Ministry to pay Israeli investor for canceled D47 highway project

Transport Minister Milan Simonovsky announced that the ministry would financially compensate Housing & Construction (H&C) for its participation in the D47 highway project by the end of July. The government has been seeking a way to solve its dispute with the Israel-based company, which was awarded a contract for building the highway by the government of ex-Prime Minister Milos Zeman. The government canceled the contract in March. So far, only a 2-kilometer (1.25-mile) stretch of the highway close to Ostrava, north Moravia, has been built. A subcontractor for H&C, ODS-Dopravni stavby, did that construction. The cost of that section is 140 million Kc ($5 million). That amount has not been paid, and ODS has halted its construction work. A Transport Ministry proposal called for clearing that initial payment to ODS once the existing contract between the government and H&C is transferred to ODS. The government rejected the proposal at its meeting July 9. After that first installment is paid, the government plans to sign a new contract for building the D47 with ODS. The construction would continue two weeks after transferring the existing contract with H&C. Meanwhile, the government July 9 paid H&C 620 million Kc in compensation for its preliminary work on the highway. However, the government did not reach agreement on compensation for future tax liabilities connected to the payment. Talks on the issue are continuing.