European Anti-Fraud Office launches investigation into Czech grid operator ČEPS projects

The European Anti-Fraud Office (OLAF) has launched an investigation into projects to modernise the Czech electricity grid that were previously carried out by ČEPS. The state-owned company used hundreds of millions of crowns in European subsidies for them. The website Neovlivní.cz drew attention to the matter, reporting that the Brussels-based office suspects fraud. ČEPS spokesperson Hana Klímová confirmed to ČTK that OLAF will inspect projects involving European funding at the company’s headquarters in March. She said ČEPS would not comment on the investigation.

ČEPS informed the Ministry of Finance about the planned inspection in recent days, after the ministry was notified by OLAF of the investigation. Klímová confirmed that the inquiry would concern projects funded under the Operational Programme Enterprise and Innovation for Competitiveness (OP PIK). Projects were financed from European funds under this programme during the 2014 to 2020 programming period.

"According to information from the Ministry of Finance, an inspection will take place at the company’s headquarters on 12 March, and ČEPS is prepared to provide maximum cooperation. Given the ongoing inquiry, ČEPS will not provide any further information at this time," ČEPS spokesperson Klímová told ČTK today.

According to Neovlivní.cz, ČEPS has already been asked to prepare for the March inspection. Investigators will want to see documents relating to individual projects, such as project documentation, records of purchases of goods and services, and others.

OLAF investigates matters involving fraud, corruption and other criminal offences related to EU expenditure. It does not have the powers of criminal law enforcement authorities and therefore cannot bring prosecutions, but it issues recommendations. Czech public prosecutor Petr Klement took over as head of the office in February this year.

ČEPS is the sole operator of the transmission system in Czechia. It maintains, renews and develops 45 substations with 82 transformers, as well as very-high- and extra-high-voltage transmission lines with a total length of approximately 6,000 kilometres. The state owns 100% of the company’s shares through the Ministry of Industry and Trade. The company increased its net profit to a record CZK 7.18 billion the year before last. Total revenues, meanwhile, fell by 8.6% to CZK 29.4 billion due to lower electricity prices.