Developers cannot draw EU funds for the regeneration of brownfields

Prague - According to the Union of Small and Medium Enterprises of the Czech Republic (SME), developer companies will not be able to regenerate so-called brownfields, such as abandoned industrial areas, with the help of funds from the European Union. This will jeopardize the utilization of 14 billion crowns designated for entrepreneurial real estate projects and the elimination of old ecological burdens in the coming years, the union claims, referring to a decision by the European Commission. However, according to the Ministry of Industry and Trade (MPO), funds from European sources can still be utilized by companies that will regenerate these sites and then conduct business there.
    "This is a concerning message not only for developers and the general public but also for cities and municipalities that lack sufficient capacity and finances. This is a problem that affects all of us and we encounter it at every turn, whether in a small municipality or a larger city,” stated SME Chairman David Šeich in a press release sent to ČTK today.
    According to Šeich, it was anticipated that developers would be able to submit applications for the regeneration of old and unused industrial or other sites to the Real Estate program during the years 2007 to 2013, which would compensate for additional costs associated with investments in the reconstruction and revitalization of old and neglected sites.
    The program was intended to motivate developers specifically for this type of project, so they would not focus solely on the construction of new properties. "The representatives of the European Commission advocated the cancellation of this possibility,” said Šeich, who pointed out that such restrictions do not apply to other EU member states.
    MPO spokesman Tomáš Bartovský confirmed today that developer companies will not be able to draw funds for the regeneration of brownfields, as stipulated by the European Commission. The MPO accepted its decision, as further negotiations would, according to Bartovský, prolong the approval of the entire operational program. "The Real Estate program remains open to entrepreneurs who wish to regenerate brownfields and subsequently utilize them for their business,” Bartovský told ČTK.
    For the years 2007 to 2013, the Czech Republic has approximately 14 billion crowns available according to SME for projects related to entrepreneurial properties and the remediation of old ecological burdens. "If developer entrepreneurial entities cannot apply for subsidies, the Czech Republic risks unutilized or inefficient drawdown of subsidy funds. It is hard to assume and expect that municipalities and regions will be able to independently implement extensive projects worth the stated budgets,” SME warned. However, according to Bartovský, this measure should not adversely affect the expenditure of funds from the Real Estate program or the regeneration of domestic brownfields.
    A brownfield is a land or property that is not effectively utilized, is neglected, and in many cases contaminated. The property cannot be utilized without revitalization, which often entails costs in the order of tens to hundreds of millions of crowns. According to experts, there are approximately 12,000 hectares of such brownfields in the Czech Republic, many of which have significant investment potential due to their advantageous locations or established infrastructure.
    "By excluding private investors from the group of potential subsidy recipients, we lose the opportunity to return effective use to many affected locations, thus risking that they will remain potential threats to the environment and human health,” SME asserts, noting that a large number of strategically located areas, including city centers, will remain abandoned and unused despite the fact that their significance for society and the economies of cities and municipalities could be restored with a financial injection.
    In recent years, the state has financially supported the regeneration of unused industrial, agricultural, military, or mining sites. With state financial support, 2,959 hectares of industrial zones have been created in the Czech Republic since 1998, which includes 530 hectares of regenerated brownfields.