Could you tell
us in a nutshell what are your main priorities
and functions as Deputy Minister?
At the Ministry of Industry and Trade I am
responsible for issues of raw materials, energy
and of metallurgy. I consider as my main priorities
the update of our national energy strategy,
gradual opening of energy markets, gradual
phase-out of mining activities, consolidation
of our steel industry and maintaining the
social peace in our energy and steel industries.
CEZ, the national energy producer produces
up to 60% of the total of the country. In
the European Union, companies owning more
than 30% of the market often spark debates
from competition agencies. How will you deal
with that situation once you are in the European
Union?
First let me tell you about the position of
CEZ. It is correct that it has the major share
of the market in the Czech Republic. But if
we compare it with other European producers,
it is not as big as they say. I also have
the actual numbers of the specific European
producers and, for example, the position of
the French producers is definitely much stronger.
We believe in unified European market. In
this space CEZ will belong to the minor market
players.
As far as opening of our power market is concerned,
I would like to remind our Energy Act No.
458/2000 Coll., which was adopted in 2000
a was entered in force in 2001. It indicates
the time table for liberalizing our energy
markets. We have started opening the market
gradually this year and we should have it
completely open by January 2006.
The market of gas is a little bit different.
There we have to catch up a lot just like
any other European country and we will have
to amend some laws to be able to open it by
the planned year of 2007.
There is an increased foreign interest
to enter the Czech Republic´s electricity
distribution market. How will you encourage
them?
It depends primarily on the companies interested
and on the conditions of their offer. The
new Energy Act is based on the same principles
as the European energy legislation, the main
principle being that it is the customer who
should profit of the competition among the
market players. Our market has little barriers
for importers. It is mainly because the imports
license can be obtained automatically.
There are already a lot of foreign companies
in the market investing into several distribution
companies. Could you tell your point of view,
on how the market benefits from it?
As I have already told you, the liberalization
process in EU countries has already proved
that open market was able to set the lowest
competitive price for customers. If foreign
companies come and offer cheap electricity
of high quality, they will be able to assert
themselves on our market.
In recent years the production of such
traditionally strong industries, like the
steel industry has been decreasing. What are
the plans of the Czech government to keep
this very strong part of the economy going?
The situation is more complicated with the
steel industry because it follows a sinusoid
curve. It is also within the European context
a "sensitive industry branch". However,
the steel industry is being submitted to a
complicated restructuring which keeps on being
discussed with the European Commission. Twelve
years ago, the average production was about
10 million tones every year. Currently, it
is about 6 million tones. It is true that
the major part is exported abroad and due
to the lack of assortment we also import quite
a lot, but we think that the figure of 6 million
will be preserved for a long time.
What are the specifics of the heavy industry?
How are you promoting it abroad, for example?
The Czech steel industry was developed in
the former Czechoslovakia. Within the former
planned economies and strategies, it was decided
that metal plates for cars would be produced
in Slovakia in Koice. These components
have the highest value added and we do not
produce them here, we have to import them.
We have a very strong motorcar industry, especially
koda company in Mladá Boleslav,
which is also one of the main importers from
Slovakia. We also had a very important company
Poldi Kladno, but unfortunately due to the
privatisation and some mistakes in the management,
this company does not exist anymore on the
market. It could therefore be interesting
for the foreign companies to know what we
are missing on our market. |
Mining is also a strong aspect of the economy.
What do you think will happen there?
The mining industry is very important industrial
sector in the Czech Republic, especially the
mining of hard coal and of lignite. We are
still mining uranium, but this activity is
going to be finished in about two years, so
I am not going to talk about it. I will only
talk about coal. We mine about 50 million
tones of lignite every year and 15 million
tones of hard coal. Lignite is used mainly
in the power plants and if the production
of electricity in the Czech Republic will
be able to compete, the mining industry will
also flourish. We think that after the opening
of the second block of the nuclear power plant
in Temelin, the mining of lignite will decrease
to about 45 million. There are three companies
that are mining lignite. One of them is fully
privatised and the other two companies have
majority state ownership. We do not expect
any changes with the adoption of new legislation
because, as in the rest of Europe, it is a
local issue. With regards to the privatisation
of the other two companies, we are preparing
the update of our national strategy in energy,
and then we will decide whether they will
remain in the hands of the State or be privatised.
The mining of hard coal is a much more serious
issue. We do not think that the mining of
hard coal is a regional issue, this is a truly
global issue. With regard to hard coal mining,
it is worth mentioning the Czech Republic,
and especially Poland, and to some extent
also several EU countries. To take the example
of Germany, it produces 30 million tones and
imports 30 million tones. It is similar in
the other European countries I mentioned before.
Only two countries export coal, and these
are Poland and the Czech Republic. The Czech
and Polish legislation will have to accept
rules stated by the European Council. We do
not have problems with this because we do
not subsidize coal mining as they do, for
example, in Germany. We do have problems with
Polish hard coal. They mine 100 million tones
each year, consume 70 million tones, and are
able to export 30 million tones. This is where
we see the danger - in the competition with
Polish coal, especially since it subsidized.
The conditions of coal mining and also other
economic conditions in Poland are different
of those in our country. In the Czech Republic,
hard coal is not much used in the power plants,
but is rather used for the production of coke
for metallurgy.
Once you enter into the EU there are going
to be lots of companies coming directly into
the Czech market. Where do you see the most
interesting possibilities for the French companies
in the energy market?
I think, the Czech Republic is a good place
for energy business. For example, we have
had a very close co-operation with France
in nuclear research. There are also possibilities
in machinery industries, because we plan to
establish energy parks, etc.
Once the Czech Republic enters the EU,
how competitive, do you think, the Czech Republic's
energy sector will be?
I think the energy sector is able to compete
already now and the same applies to the year
2004. The Czech gas works have been purchased
by a German company, and so we believe there
will not be any problems in the future. The
current owner is a guarantee that we can be
compared to similar gas companies in Europe.
In addition to that, the fact that there are
about 30 billions of cubic meters of gas running
to Western European markets through the Czech
pipelines, can only in the future improve
the position of the Czech Republic, in my
opinion. Also, the Czech market has the advantage
of having diversified sources. We are able
to import gas from Russia as well as from
Norway. The situation is similar with crude
oil; we also have diversified sources, we
take part of our imports from Russia, and
the other part runs through the Ingolstadt-Kralupy
pipeline. In short, as far as gas is concerned,
there is no problem, and I think the same
can be said about the electric energy. I have
two reasons for that. The prices for electric
energy are comparable with the average EU
prices. The other reason is that we already
export quite big amounts (12 to 14 TW/h this
year) of power to Western Europe, among others
to Germany. It is important to say here that
the power industry is one of the best branches
in the Czech Republic. The Czech energy sector
is comparable with EU countries both in technical
and in qualitative parameters of supplied
electricity. We are part of the UCTE system,
and the nuclear power plant Dukovany belongs
in many parameters to the top ten power stations
in the world (as evaluated by the WANO).
How would you address our readers regarding
the possibilities they can find here in the
Czech Republic?
The Czech Republic is a standard country with
a long cultural tradition. Many visitors of
Prague and of the Czech Republic have already
convinced themselves about it. Also the representatives
of French companies resident in our country
can produce a lot of information supporting
this statement.
In general, the Czech Republic is a good place
to live in and to do business in. We shall
be happy to greet all French entrepreneurs
who wish to invest their money and their skills
in our economy. |