Czech Republic Infrastructure Report Q3 2008

The Czech Republic has a modern and reliable infrastructure. Since joining the European Union (EU), the country's infrastructure has been developing to bring it in line with European standards. The high level of infrastructure means that the country is able to compete with a number of other European nations especially those in eastern Europe for the investment from companies wanting to diversify their asset portfolio's into emerging markets or to relocate their operations to a nation, which offers cheaper labour and property, whilst still promising a secure and reliable infrastructure.

The country has a transport infrastructure which is mainly geared toward the road and railways sectors, as these areas have to deal with the most demand. The freight sector is particularly road reliant. With 73.1% of the total freight transported in the Czech Republic carried by road. This is expected to climb to 74.7% by 2012, meaning that the country will have to continue to invest into its motorway network to ensure the quick and reliable transit of imports and exports. Major ongoing projects in the sector include upgrades to the country's road network and projects on the D47 motorway to link it with Poland.

Power supply infrastructure meets the demand requirements of the nation. In 2008 BMI estimates that electricity consumption will reach 73.8twh, whilst generation capacity will be 86.8 twh. Demand is expected to increase to 78twh by the end of the forecast period, but generation will continue to meet it with 94twh expected to be produced in 2012. This allows the Czech Republic to boast a secure and reliable power sector, which can use its generation surplus for export. Major ongoing projects within the Czech Republic's power sphere this quarter include, expansion in the gas sector and investment into renewables, especially wind power.

The construction industry looks set to continue its growth. In 2008 we are estimating that the industry will be worth US$12.83bn and expect it to increase to US$17.99bn in 2012. The industry's is gradually increasing its percentage chunk in the Czech Republic's GDP, with its percentage share of GDP expected to grow from 6.49% in 2008 to 7.43% in 2012. These increases have been fuelled on by such projects as new power station construction and renovations to the country's motorway sector that are ongoing in the country's construction sphere this quarter.

Major European power, construction and engineering companies, as well as infrastructure developers are active in the Czech Republic and are complimented by a number of local companies. Firms with current projects and operations in the nation include EZ, now a major power utility in Europe, which still monopolises its native country's power sector and the Swedish-based Skanska, which is winning highprofile projects in the Czech motorway construction sphere.

BMI believes that the Czech Republic's infrastructure will offer the country the opportunity to develop its economy through the growth of local industry and business and will also encourage foreign investors, who wish to finance operations within the emerging markets of eastern Europe and will be drawn to a country which offers a modern transport sector, a reliable power supply, a secure political atmosphere and a stable business environment.