A new administrative building of the main CEZ headquarters

A new administrative building of CEZ headquarters was awarded the title Building of the year 2002. This award is traditionally given to the investor, architect and major supplier of the construction, and ever since 1992, when the newly established ABF Foundation dispensed the first award, it has been regarded as the most significant prize awarded in the area of Czech architecture and construction art.

The award was presented by Mr Jiri Rusnok, the Czech Minister of Industry and Commerce, on the occasion of a construction fair For Arch, held on September 12 this year.

The jury, staffed by representatives of the Foundation for the Development of Architecture and Building Industry, the Stavitel (Builder) magazine, the Czech Ministry of Industry and Commerce and the Association of Czech Entrepreneurs in the Building Industry, appreciated the highly sophisticated building with an impressive economical system of energy consumption, with regard to the resulting well-balanced and decent appearance. The headquarters of CEZ, a. s. uses both passive and active means aimed at reducing the energy consumption, and has been the first building in the Czech Republic to use night cooling system and natural aeration, thus complementing mechanical ventilation and replacing energy-consuming air-conditioning systems.

The investor of the building was a developer company AB Michle, a daughter company of CEZ. The construction of the building, along with the interior equipment, was realised for 3% less funds than were the planned costs.

The overall investment into the construction amounted to approx. 630 million CZK (of which 420 million CZK took the shape of an increase of basic capital and 210 million CZK was realised in the form of a contribution reinforcing the basic capital); with this funding, the building was completed within the contractual deadlines (the entire building process was carried out between November 2000 and February 2002. The building was subsequently bought by the CEZ company for 930 million CZK, after which CEZ reduced its equity share in the AB Michle company by 210 million CZK (i.e. the above-mentioned contribution reinforcing the basic capital). The remaining 420 million CZK is currently deposited on cash credit accounts of the AB Michle company, ready to be used for the planned construction of the second building in the immediate vicinity of the first one. The second building will be used for commercial purposes or for the purposes of CEZ, a. s., and its possibly also for the purposes of the potential strategic partner of the company.

The way in which the CEZ Corporation acted in the process of constructing the building were in perfect harmony with the current legislation. All the decisions and steps taken by the company Board of Directors were analysed in both economic and legal terms and were communicated to the company Supervisory Board (which discussed this topic more than 6 times). Last but not least, the subject was also discussed on this year's general assembly of the CEZ, a. s., which made the decision to change the company headquarters.

The new administration building in Duhova street is three times smaller than the original company headquarters, which, along with the utilisation of modern technology, establishes appropriate conditions for cutting the running costs of the company. Another substantial savings were achieved by considerable reduction of hundreds of copy machines, refrigerators, faxes etc., which disappeared with the introduction of the new large offices. This helped to reduce the consumption of paper almost by half.

The original building in Jungmannova street still remains the property of CEZ, a. s.. The offers which the company has received so far, exceeded both the acquisition cost of the new building and the residual value of the original complex, but in spite of this they did not reach the level which would substantiate the sale of the complex (with all due care of a good company controller).

It is obvious that the fact that about 400 CEZ employees have to move from the old CEZ administration building to the new large offices, which help establish conditions for better communication and increase efficiency of the company, creates both positive and negative responses. The strategy of questioning the acquisition of the new building and invoking issues related to the construction process, is a fine catch both for backward-looking and inflexible people, but also provides a golden opportunity for all opponents of the planned merger between CEZ and the distribution companies.

10. 10. 2002