Prague is likely to withdraw from the contract for the rental of the Exhibition Ground

Prague - The capital city is likely to terminate the lease agreement for the Exhibition Grounds, which it has with the company Incheba. City lawyers are currently preparing the notice of termination. If the city does not reach an agreement with Incheba in the coming weeks on an amendment that should guarantee the reconstruction of the fire-damaged Industrial Palace, the municipal council will discuss the proposal for termination in February. Milan Richter (ODS), a councilor, told ČTK.
    Prague drafted an amendment to the lease agreement for the Exhibition Grounds in November, according to which the destroyed wing of the Industrial Palace should be rebuilt by the end of September 2010. Incheba should finance it with funds from insurance. If the money obtained from the insurers for reconstruction is insufficient, Incheba would have to cover the remaining expenses from its own funds. Conversely, if the invested amount is less than the insurance payout, Incheba should transfer the remaining funds to Prague.
    The capital intended to finalize the amendment by December 9, but according to the city hall, the negotiations with Incheba are taking too long and do not seem to be nearing a conclusion.
    "I have asked the director of the commercial activities department to prepare an option for termination of the contract,” Richter stated. According to him, it will take two to three weeks for the lawyers to process the proposal. "If no agreement is reached by then, I will present the material to the council,” he added. According to Lidové noviny, Mayor Pavel Bém (ODS) and his first deputy Rudolf Blažek (ODS) would also support the termination of the contract. According to Richter, the city is also prepared for judicial resolution of the dispute.
    The city's initiative has surprised Incheba. "We have publicly declared several times and continue to declare our willingness and initiative to communicate with the city hall and agree on rational and mutually balanced conditions of cooperation,” said Incheba spokesman Radovan Ježovič to ČTK. He added that the statements of the councilors can be misleading, can harm Incheba, and create pressure.
    Due to the unsigned amendment, Prague has also postponed the transfer of the exhibition of paintings "The Slav Epic" from Moravský Krumlov to the Křižík Pavilion at the Exhibition Grounds. Alfons Mucha's works were supposed to be moved to the capital this spring, but it is now clear that they will remain at the Moravský Krumlov castle at least until the end of June.
    The contract with Incheba is reportedly unfavorable for the city; Richter previously claimed that it is nearly impossible to terminate. In exchange for a favorable rent of ten million crowns annually, Incheba committed in the contract to invest one billion crowns in the area by 2015. Part of this investment was supposed to have been made in previous years, but that did not happen.