Prague, Czech Republic – October 2, 2023 – Datarun, a prominent data analysis company, has released a comprehensive report warning of substantial financial losses in the Czech Republic due to sluggish digitalization, with a particular focus on the construction management sector. The report estimates annual losses of a staggering seven billion Czech korunas, painting a grim picture of the nation’s digitalization progress.

In its damning assessment, Datarun highlights a lackluster response from government officials and the Ministry for Regional Development (MMR), accusing them of concentrating on PR and marketing campaigns rather than tangible action. Promised improvements in construction permit acquisition have failed to materialize, exacerbating the inefficiencies in the construction sector.

The digitalization project for construction management is currently plagued by setbacks. The MMR’s cancellation of long-awaited public tenders led to intervention by the Office for the Protection of Economic Competition (ÚOHS), which reinstated the tenders. Unfortunately, a subsequent tender, “Digitalization of Construction Management” (DSŘ), was fraught with errors in its documentation, leading to yet another cancellation by ÚOHS.

One of the most alarming aspects of the report is the potential loss of European funds earmarked for digitalization, which could amount to millions of korunas. Datarun’s analysis suggests that the MMR has already abandoned hopes of securing these funds, jeopardizing the nation’s digitalization efforts.

Responsibility for digitalization projects in the Czech Republic lies with Petr Fiala (ODS) and Minister Ivan Bartoš (Pirates). Despite high expectations for a breakthrough in 2023, no development or programming work has commenced, leaving the nation’s builders and citizens in limbo.

Successful digitalization of construction management could significantly expedite the process, potentially reducing it by two years. This prospect would be welcome news for a sector notorious for its lengthy and cumbersome approval procedures, as evidenced by the Czech Republic’s dismal ranking of 157th out of 190 countries in the World Bank’s Doing Business report in 2020.

The report paints a bleak picture of the construction landscape, where residential and infrastructure projects’ permitting process can stretch to a grueling ten years. In contrast, the World Bank recommends that building authorities assess requests within 60 days, with a maximum extension to 90 days for complex situations. Delays often stem from the need to await opinions from multiple bodies, which are not factored into these timelines.

Investors and developers, when choosing where to allocate their resources in Central Europe, may favor countries like Germany or Poland, where construction permit timelines are much more predictable and streamlined. In the Czech Republic, the uncertainty and years-long wait for permits increase costs and deter potential investments.

The report’s findings emphasize the urgent need for a concerted effort to accelerate digitalization in the construction management sector to mitigate financial losses, improve efficiency, and attract investment to the Czech Republic.

Article by Prague Forum