Current Affairs Amazon rejection could cost future investments, says industry leader

02-04-2014 15:32 | Jan Richter

The US online retailer Amazon has dropped plans to build a large distribution centre outside Brno. The firm’s head of European operations, Tim Collins, told Czech TV on Wednesday the firm did not feel welcome in Brno whose councillors repeatedly voted against the project due to issues with the city’s zoning plan. Amazon was going to invest 2.7 billion crowns in the location, creating around 1,500 jobs. The firm is continuing with plans to build another distribution centre outside Prague. I spoke to Radek Špicar, vice president of the Czech Confederation of Industry, who says Amazon’s decision could hurt the country’ reputation with foreign investors.

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Photo: CTKPhoto: CTK “If it’s their final decision, it’s very unfortunate because at the moment, we have the highest unemployment in history and losing so many jobs would not be the best of news right now.”

Brno council voted against the plan but the South Moravian region made its own offer to Amazon – where do you think the problem was?

“Well, it’s difficult to judge because I was not taking part been in the negotiations. But these projects usually need an investor who is patient because we are not in China and these permits take a long time to obtain.

“But at the same time, they also require willingness of the other side, of the country where the investment is supposed to take place; they need to invite and welcome the investor, and do something to attract the investment. I don’t know what the biggest problem was but apparently, the willingness and readiness of the municipality was an issue. That’s without any doubt.”

Radek Špicar, photo: Matěj PálkaRadek Špicar, photo: Matěj Pálka Do you think that the government could and should have done more to secure the investment?

“I don’t think the government is to blame. The involvement of Industry and Trade Minister Mládek, comments by President Zeman, the personal involvement by Prime Minister Sobotka should be enough. It’s not always the case that these big players are supporting and putting so much time and energy into one project. So I think they have done a lot, maybe more than they had to. But unfortunately, it was not up to them.”

Could Amazon’s decision hurt the Czech Republic’s reputation with international investors?

“Actually, I think it can, for very simple reasons. We are now in a situation when the Czech Republic is losing, to a certain extent, its attractiveness in the eyes of foreign investors, for a number of reasons.

Photo: CTKPhoto: CTK “One of them is the high prices of energy. It’s also known it’s not easy to invest here because of human resources, that is, skilled labour force is not always available everywhere. The high taxation of high-earners is a big issue, and our immigration policy is not working in a proper way.

“So there are many reasons why the Czech Republic is not attracting as many investors as it should, and the fact Amazon might decide not invest in the Czech Republic, will certainly not persuade others to do same. It will rather encourage them to look elsewhere.”

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