Press released

Prague, March 9, 2011 – The report of the Supreme Audit Office, stating that the building of the National Technical Library in Dejvice is overpriced, is incorrect and confusing in some parts. Furthermore, this report was seriously misinterpreted by the media, as some facts were referred to out of context. Sekyra Group hereby corrects the statements included in the report.

Funding

The Supreme Audit Office report states that the building wasn’t funded, as usually, by the traditional public tender, but using a strategic partner, which allegedly increased the price compared to the original plan inappropriately. The private partner of the project was a member company of the Sekyra Group. The way of funding, i.e. loan from the private business for a 7-year period without any provision, was unique at the time, and yet very effective in the end. To be specific, the total financial costs, included costs needed for the required bank warranty, are 3.386 % p.a. at the 7-year rate fixation! During the construction, the rate 4.37 % p.a. was applied, and in the period from the handover till final payment the rate was 2.02 % p.a. We believe that the funding terms are highly competitive, that is, the best available at the banking market.

Price of the building

The Supreme Audit Office report states that the building costs increased by 30 %; however, the media quote this figure out of context. Even the report states that this doesn’t refer to the real increase of costs during the building process but to the increase compared to the preliminary budgets made in 2000 and 2003. The reasons were: the VAT increase by 14%, which Sekyra Group paid in full; the fact that the original estimation was made using the price levels of 2000; and the fact that the parking lot moved from the separate above-ground building to the underground. All these increases occurred before the private partner entered the project. Since the private partner, i.e. Sekyra Group, joined the project, no costs increased whatsoever and the contract was fulfilled in time. The price of the building didn’t increase, even though some parts are of better quality that originally planned, and thus more expensive (for example, the tempered glass panes on the façade that weren’t required initially but proved necessary for the functionality of the building, cost about 17 million more; the price of the heavy-current engineering increased by 13 million). These differences weren’t charged by Sekyra Group and the Group effectively bore the costs alone, which we consider unique.

In the report, the Supreme Audit Office compares unit costs for the Justice Complex in Brno with the unit costs for the building of the National Technical Library. We believe that the library is a very specific project as the public building and also for its high demands for storage areas and operational accessibility to the big book fund. Therefore, such a comparison isn’t appropriate. In addition, the order for the library included the funding and project preparation.

The library building is exceptional – for example, it sports the unique bearing structure made of prestressed concrete, so the pillar span could be as long as 15m. The library was highly awarded for its effective power-saving design, and became the reference project of the Czech Green Building Council. Also the architecture of the building is unique. We are ready to present full documentation for an independent technical audit to prove that the building isn’t overcharged, and that the funds were used effectively in order to achieve the highest possible quality and process effectiveness, to minimize future costs.

Furniture price

The Supreme Audit Office report points at the ineffectiveness in the purchase of the free inventory of the building; specifically it quotes the price of the reading desk for 24 people for 449,288 Czk, the reading desk for 6 people for 31,956 Czk, and the reading chair for 8,233 Czk.

In fact, these items aren’t overpriced. They are part of the inventory of the public part, and the requirements for the inventory of public facilities with such frequent use are specific. The basic requirements include the renowned producer who guarantees to maintain the product line for at least 10 years, and 10-year warranty period during which the damaged inventory will be replaced by new pieces. The dimensions of the quoted desk for 449,288 Czk are 11.2 x 1.8m, the warranty period is 10 years as desired, it can comfortably accommodate 24 people, is fully equipped with the power and PC networks and there are only two pieces in the whole building. Out of approximately 8,000 items of the inventory, only 79 cost over 100,000 Czk. These items include, almost exclusively, large reading, distribution or reception desks, and all prices are VAT included.

There was an independent tender for the supply of furniture, the conditions and results of which we are ready to submit for an independent audit.

Extended building time

The building time was by no means extended compared to the terms of contract between the National Technical Library and Sekyra Group. The Supreme Audit Office points out the extension of the realization period before Sekyra Group joined the project; this was mainly caused by the long assessment of the investment plan and also by the time necessary for the project preparation and obtaining of required authorizations. Since Sekyra Group joined the project the schedule was kept, including lap periods. Immediately after Sekyra Group’s accession, the preparation of the building and the related records began, and the construction itself started within three weeks, to be completed, in fact, before the agreed deadline.

Statement of Sekyra Group

For Sekyra Group, the building was the reference project in terms of PPP funding (PPP = Public Private Partnership, which, among other benefits, doesn’t increase the national debt). That’s why we really kept an eye on the effective funding and success of this investment project that has been so far highly appreciated by experts as well as general public. Thus, the aforementioned misinterpretations don’t only damage the reputation of this very project but also the concept of tried-and-true, functional cooperation between public and private businesses – PPP projects.

The building won several expert awards, proving that both design and realization meet the highest esthetic and technical standards. The building is well-designed to reduce the operational costs, may they refer to power consumption or maintenance and repairs.

For the full Supreme Audit Office report, visit http://www.nku.cz/cz/media/nku-zkontroloval-penezni-prostredky-urcene-na-vystavbu-nove-budovy-narodni-technicke-knihovny-v-praze-6--dejvicich-id5557/.

Press report from the National Technical Library here: http://www.techlib.cz/cs/82-pro-media

For further information please contact:

Jana Strádalová

PR Consultant

PLEON Impact

Konviktská 24, 110 00 Praha 1, Czech Republic

tel.: +420 222 540 147-8,  fax: +420 222 540 836

mob.: +420 602 485 222

e-mail: jana.stradalova@pleon-impact.cz

www.pleon-impact.cz