Metrostav banned from projects with public funding

A regional court in Hradec Kralove has banned the construction company Metrostav from taking part in projects involving subsidies or state support for six years. It will also have to pay a fine of CZK 600,000 for its role in manipulating the budget of a project for the modernization of the Hotel Bohemia Chrudim. The court also sent a representative of the investor to prison for two years and fined him CZK 200,000. Together with Metrostav managers, the conspirators planned to misuse CZK 9 million of funds through a system of fraud that would include falsifying documentation in the daily construction log book. "The purpose of the illegal activities was to secure subsidized funds for other purposes, for example for the fitout of the hotel," said the state prosecutor Adam Borgula. The hotel's repairs were supposed to cost CZK 74 million, CZK 43 million of which was to be covered by subsidies. Work was halted however and a portion of the funds the investor had requested was never sent. The prosecutor said that the potential loss of public funds came to CZK 12.5 million. Metrostav has appealed the ruling.