Regional Operational Programme Nuts Ii Northeast for the Period 2007 - 2013

Liberec- Hradec-Králové- Pardubice- Region Region Region

REGIONAL OPERATIONAL PROGRAMME NUTS II NORTHEAST FOR THE PERIOD 2007 - 2013

November 7, 2007

Regional Operational Programme NUTS II Northeast

1 Introduction ...... 8 2 Methodical and Personnel Assurance of ROP “Northeast” Creation...... 9 3 Basic Documents and Legislation...... 10 3.1 Documents on European level ...... 10 3.2 Documents on National Level ...... 11 3.3 Documents on Regional Level ...... 12 3.4 Legislation Relevant for the ROP “Northeast” Creation ...... 14 4 Analysis of Economic and Social Situation ...... 16 4.1 General Characteristics...... 17 4.2 Development of Economy of the Region in Context of the Czech Republic and EU...... 21 4.3 Business and Knowledge Economy...... 25 4.4 Human Resources, Qualification and Education, Labour Market ...... 33 4.5 Tourism and culture...... 45 4.6 The living environment ...... 54 4.7 Traffic and technical infrastructure, housing ...... 60 4.8 Regional development and State administration...... 69 4.9 Evaluation of the existing supporting programmes ...... 73 4.10 SWOT analysis...... 76 5 Strategy ...... 84 5.1 Strategy resources ...... 84 5.2 Main characters of the strategy ...... 85 5.3 Strategy of the Northeast Cohesion Region...... 85 5.4 The issues tree ...... 91 5.5 Global target and specific targets of the ROP “Northeast”...... 92 5.6 Selected strategy...... 93 5.7 Relation of the ROP “Northeast” to superior programme documents ...... 100 5.8 Relation of the ROP “Northeast” priority axes to the strategic documents of regions within the Northeast Cohesion Region...... 104 5.9 Relation of the ROP priority axes to the Rural Development Programme ...... 105 5.10 Compliance of the ROP “Northeast” -based public interventions with regulations of the EC concerning structural funds and the Community target ...... 106 5.11 Reasons for public interventions within the NUTS II Northeast Region with respect to regions´ competencies...... 107 5.12 Absorption capacity of the region ...... 107 5.13 Horizontal matters ...... 107 5.14 Contribution of ROP Northeast to the realization of Strategies for Permanent Sustainability of Development...... 113 5.15 Contribution of the ROP “Northeast” towards the urban area...... 114 5.16 Partnership process...... 115 5.17 Cross financing...... 118 5.18 Possibilities of PPP in the ROP „Northeast“...... 119 5.19 ROP “Northeast“ cooperation with thematic operational programs ...... 120 6 Priority Axes and Areas of Intervention in ROP „Northeast“...... 125 6.1 Structure of the Priority Axes and Areas of Intervention in ROP „Northeast“ ...... 125 6.2 ERDF Financial Allocations to Each ROP “Northeast“ Priority Axis ...... 126 6.3 Priority Axis 1: Development of Transport Infrastructure ...... 127 6.4 Priority Axis 2: Development of Urban and Rural Areas ...... 140 6.5 Priority Axis 3: Tourism...... 158 6.6 Priority Axis 4: Development of Entrepreneurial Environment ...... 168 6.7 Priority Axis 5: Technical Assistance...... 179 7 Indicators for Monitoring and Evaluation...... 183 7.1 Context Indicators...... 185 7.2 Program indicators ...... 185

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7.3 Priority axis indicators...... 187 8 Implementation Part...... 191 8.1 Programme Implementation ...... 191 8.2 Project Selection System. Beneficiary Duties ...... 194 8.3 Financial Management ...... 196 8.4 Control System ...... 199 8.5 Monitoring...... 203 8.6 Programme Evaluation...... 208 8.7 Promotion ...... 217 9 ROP „Northeast“ Funding...... 221 10 Annexes...... 224 10.1 Annex No. 1: List of Cities by Areas of Intervention under Priority Axis 2 ...... 224 10.2 Annex No. 2: Indicative breakdown of the Community contribution by category in the ROP Nuts II Northeast ...... 225 10.3 Annex No. 3: A non-technical summary of the information given in the report on environmental conditions according to Annex l(j) of the Regulation 2001/42/ES...... 227

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List of Abbreviations

AFCOS Anti-Fraud Coordinating Structure AO Auditing body APZ Active Policy of Employment ARR Regional Development Agency CBA Cost-Benefit Analysis ČCCR Czech Tourist Authority CF Cohesion Fund CF Cohesion Fund CHJ Central Harmonizing Unit (MF) CHKO Nature reserve CRR Center for the Regional Development ČNB Czech National Bank ČOV or Waste Water Treatment Plant WWTP CR Tourism CR Czech Republic CSF Community Support Framework CSG Community Strategic Guidelines ČSÚ Czech Statistical Office CZK Czech Crown CZT Centralized Heat Supply EAFRD European Agricultural Fund for Rural Development EAO Economically active inhabitants EC European Commission EC European Communities EFF European Fisheries Fund EHS European Economic Community EIA Environmental Impact Assessment EO Inhabitant Equivalent ERDF European Regional Development Fund ESF European Social Fund EU European Union EUR Euro EUROSTA Statistical Office of the European Communities T EVVO Environmental Education, Training, and Further Education GC Global target GS Grant scheme HDP Gross domestic product ICT Information and communication technologies IDS Integrated transport system IOP Integrated operational programme IS Informational System

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KAP Communication action plan KD Combined Transport KHK The Hradec Králové-Region KOM A part of the title of the European Commission’s document (title of decree) LK The Liberec-Region MF Ministry of Finance MHD Municipal Mass Transport MK Ministry of Culture MLC Multimodal Logistic Center MMR Ministry for Regional Development MPO Ministry of Industry and Commerce MPSV Ministry of Labour and Social Affairs MSC2007 Monitoring System Central 2007 MŠMT Ministry of Education, Youth and Sport MSP Small and Medium-sized Enterprises MSSF Monitoring system of structural funds MV Monitoring Committee MZd Ministry of Health Mze Ministry of Agriculture MŽP Ministry of Environment NGE Net grant equivalent NNO Non-governmental non-profit organizations NOK National Body for Coordination NP National park NPR National Reform Programme (National Lisbon strategy) NRP National development plan NSRR National Strategic Reference Framework NUTS Nomenclature of Territorial Statistical Units (Nomenclature des Unités Territoriales Statistiques) NUTS II NUTS II Northeast (Liberec-Region, Hradec-Králové-Region, NE Pardubice-Region) OECD Organization for Economic Cooperation and Development OKEČ Industrial classification of economic activities OP Operational programme OP D Operational Programme Transport OP PI Operational Programme Industry and Innovation OP PP Operational Programme Industry and Enterprise OP LZZ Operational Programme for Human Resources and Employment OP VK Operational Programme Education for Competition OP ŽP Operational Programme Environment OPPI Operational programme Business and innovations OPVK Operational programme Education for competitiveness ORP Municipality with extended powers OSMS Department of Management of Monitoring Systems (MMR)

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OSN United Nations Organization PCO Payment and certification body PK The Pardubice-Region PO Priority area or axis PPP Public Private Partnership PPS Purchasing power parity PRV Rural Development Programme PZI Direct foreign investments ŘKV Managing and Coordinating Committee RLZ Human resources development ŘO Managing Authority ROP Regional operational programme RPS Community Support Framework RR Regional Council SC Specific target SEA Strategic Environmental Analysis SEZ Ecological Load Remedies SF Structural Funds SFDI State Fund of Transport Infrastructure SHR ČR Economic growth strategy of the Czech Republic SLBD Census of inhabitants and housing SOŠ Secondary Schools SOU Higher Technical School SOZS Community Strategic Guidelines SROP Joint Regional Operational Programme S-RR Regional Council Secretariat SRR ČR Strategy of regional development of the Czech Republic SŠ Secondary school SUR ČR Czech Republic’s sustainability strategy SFC2007 System for Fund Management in the European Community SWOT Analysis of strengths, weaknesses, opportunities and threats SZIF State Agricultural Intervention Fund TA Technical assistance TEN-T Trans-European Transport Network TIC Tourist Information Center TOP Operational Programme UIDP Urban Integrated Development Plan UNESCO Monuments UNESCO World Heritage List ÚRR Office of the Northeast Regional Council

ÚSES Territorial System of Ecological Stability VKP Important Landscape Elements VOŠ Higher Professional School VRR Committee of the Regional Council

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VŠ University VTP Scientific-technological and Technological Parks WTO World Trade Organization

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1 Introduction

Regional operational programme for the Northeast Cohesion Region is submitted by the Regional Council of Northeast Cohesion Region residing in Hradec Králové. The region consists of the Liberec- Region, Hradec – Králové-Region and the Pardubice-Region. The Regional Operational Programme Northeast Cohesion Region (ROP Northeast) is the program document determining the priority axis of the region for the program period of the European Union for years 2007 – 2013. The ROP “Northeast” is one of the whole system of the programme documents prepared by the Czech Republic (ČR) and its regions. The purpose of the program documents is to submit to the European Commission instruments, through which it will be possible to reach the goals of the European Union and its policy of the economic and social cohesion by drawing financial aid from the structural funds of the European Union. For the Northeast Cohesion Region and its operational programme the Target 1 -Convergence is relevant. ROP “Northeast” takes into consideration the conceptual basic materials of the regional level and first of all the main strategic and programme documents determining the general priorities of the development of the ČR and EU. Those documents are first of all the Community Strategic Guidelines (SOZS), National development plan of the Czech Republic (NRP) and the connected National Strategic Reference Framework (NSRR), specifying besides the definition of the main targets and priorities of ČR for the following program period the split of priority regions between the individual thematic/sector operational programmes and regional operational programmes. The National Strategic Reference Framework is subject to the approval of the European Commission and it is a certain connection between the European priorities stated in SOZS and national priorities of the cohesion policy specified in the operational programmes. ROP “Northeast” is consistent with other national strategic documents, i.e. Strategy of Sustainability (SUR ČR), Strategy of Economic Growth and regional strategies of development of individual regions of which Northeast Cohesion Region consists. ROP Northeast similarly like NSRR reflects completely the changes following from the different attitude to the European policy of the economic and social cohesion for years 2007 – 2013 and new ambitions ofČRas full-fledged EU member in the future program period. A part of the attitude of the originator in ROP Northeast creation became the experience from the current program period 2004 - 2006. ROP “Northeast” was elaborated in accordance with the principle of subsidiarity it is the instrument for achieving priorities of the National Strategic Reference Framework (NSRR). It concentrates on the solution of the main problems of Northeast Cohesion Region region and on the utilization of its potential, with accent on the balanced and harmonic development. The main liability for the contents has the Northeast Cohesion Region or its Regional Council (RR). The concentration of the ROP “Northeast” region in the form of defined priority axes is based on and is connected with the global target, strategic targets and priorities of the National Development Plan of the ČR (NRP) for the period 2007 - 2013. The focus of the ROP “Northeast” contents is formulated with regard to thematic focus of other operational programmes and application of the principle of subsidiary and the derived competence pre-conditions and disposition connected with the territory development. Creating the ROP “Northeast”, the principle of the comprehensive solution of problems following from the territorially – integrated attitude based on the knowledge of particular condition of Northeast Cohesion Region was applied.

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2 Methodical and Personnel Assurance of ROP “Northeast” Creation

The co-ordination of the creation of programme documents on the national level was provided by the Ministery for Regional Development (MMR), Section of Community Support Framework. Based on the Act. No. 248/2000 Col., of the support of regional development, the Steering and Co-ordination Committee (ŘKV) came into being, the task of which is the co-ordination of aid provided by the European Communities on the level of the state. ŘKV created the so-called Horizontal working group for programming 2007 - 2013, the task of which was the co-ordination of the preparation of Operational programmes, removal of duplicity and gaps of assurance of consistency between the operational and national level of programme documents. The procedure of ROP “Northeast” creation was based on the principle of partnership, achieved by the co-operation of a number of relevant regional partners. The core of the organizational structure was the ROP team consisting of employees of Regional Authorities who professionally concentrate on the regional development and of regional agencies of regions. The task of the team was the determination of the main directions and tasks in the whole procedure of document creation and providing information necessary for the good progress of work, the methodical and organizational control of the whole procedure of the programme elaboration and commenting individual stages of work. Additional important subjects were four working groups with thematic concentration given by the generally accepted priority axes of region development. These working groups consisted of employees of the Regional authorities, representatives of towns and municipalities of the region, Chambers of Commerce, non-profit sector and other social partners. The task of working groups was the active participation in the programme elaboration, comments to its individual stages and providing to originators professional opinions and information necessary for the progress of work associated with the problem of a particular priority axis. The ROP team and working groups were during the whole process of the ROP “Northeast” creation in close contact with the committees for the regional development of all the three regions, relevant sections of Regional authorities, councils and Regional assemblies of all three regions and Regional Council of Northeast Cohesion Region. The comments of individual working groups have been incorporated into the programming document, after having been discussed at the ROP team and the Regional Council Committee (VRR) meetings and either accepted or refused based upon their nature and content. All comments and the responses to them are available at the Regional Council Office of the Cohesion Region Northeast (URR) to be examined in the form of pages of Comments and Responses of the ROP “Northeast” working groups. ROP Northeast was elaborated in accordance with the Methodology for the preparation of programme documents for the period 2007 – 2013 of the section of Community Support Framework of the MMR. The main ROP “Northeast” elaborator was the Centre of European Projecting – Regional Development Agency of the Hradec-Králové-Region, which co-operated closely on the preparation with ARR – Agency of Regional Development of the Liberec-Region and Regional Development Agency of the Pardubice-Region.

The ROP “Northeast” programming document was made public during the entire time of program preparation on the web pages of ÚRR Northeast (www.rada-severovychod.cz) and were available for comment by the public at large. After discussion with partners, comments from the public were incorporated into the programming document and are archived at ÚRR Northeast.

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3 Basic Documents and Legislation

The evaluation of the regional specifics shall be performed in the context of current strategies and valid documents on the regional, national as well as European level. It is important that ROP “Northeast” is in accordance not only with the needs and priorities identified within Northeast Cohesion Region, but also with ČR and EU priorities. The starting points for the formulation of the strategy and priority axis of the Northeast Cohesion Region defined in ROP “Northeast” were evaluated especially in comparison with the following strategic documents on the level of: European Union − Cohesion Policy for the support of growth and jobs: Community Strategic Guidelines (SOZS) − Working paper for town development Czech Republic: − Strategy of sustainability of CR; − National Development Plan/National Strategic Reference Framework ofČR 2007 - 2013 − Strategy of regional development of CR − Strategy of economic growth ofČR2005 – 2013 − National program of reforms ofČR(National Lisbon Program 2005 – 2008) NUTS II Northeast Cohesion Programme − strategic and developmental programs on the level of regions, region of cohesion, towns etc.

3.1 Documents on European level a) Cohesion Politics for the support of growth and employment: Community Strategic Guidelines for economic social and territorial cohesion, 2007 - 20131 Comunity Strategic Guidelines for for economic social and territorial Cohesion policy (SOZS) were adopted by the Council on 6.10. 2006. The main goal of SOZS is to determine priorities of the Community, which will be supported in the framework of cohesion policy to support co-ordination with the Lisbon strategy, as defined in the integrated general principles for the growth and employment and their following implementation. The financial instruments for the implementation of cohesion policy are Structural Funds (ERDF and ESF) and Cohesion Fund (FS). With regard to the renewed Lisbon Strategy for Growth and Jobs, ROP “Northeast” co-financed through the cohesion policy concentrates first of all on the SOZS priority: “Increase of attractiveness of member states, regions and towns by improvement of their availability, by assuring the corresponding quality and level of services and preserving their potential in the field of environment“. b) Working paper of the European Commission (EC) “Cohesion Policy and cities: the urban contribution to growth and jobs in the regions” This working paper formulates recommendations to the more integrated and more strategic attitude to the solutions of town issues. The proposals are a part of the reform of cohesion policy planned by the European Commission for 2007 - 2013. The results of the public discussion of this working paper were one of bases for the formulation of the framework and future priorities for the programmes financed by EU in the 2007 – 2013 program period in the field of town and urban development. In the working paper 4 problem areas are defined, on which the attention in connection with the economic development and increase of quality of life in towns, which is one of the important themes for the

1 Council Regulation on Community Strategic Guidelines for Cohesion policy (2006/702/ES) of October 6, 2006.

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Regional operational programme, should concentrate. These problematic issues are: transport, availability and mobility, availability of services, physical environment and culture. Additional wider topics to be solved in connection with the development of towns are: support of innovations, business and economy of knowledge, creation of new job opportunities of higher quality, solution of disparities in towns, effective administration and management of town development and ways of financing of town renewal.

3.2 Documents on National Level a) Czech Republic’s Sustainability Strategy (SUR ČR) SUR ČR is the consensual framework for elaboration of materials of conceptual character and starting point for strategic deciding and planning in CR. The basic task of SUR ČR is to draw attention to existing and potential problems, which could endanger the transition of ČR to the sustainability and to initiate measures how to prevent these threats or at least to mitigate their impact and to solve as effective as possible their possible consequences in time. The central topic of strategy is the sustainability of the development, the base of which is achieving three basic targets2, i.e. 1. Social development, respecting the needs of all people, 2. Effective protection of environment and considerate utilization of natural sources and 3. Maintaining a high and stable level of economic growth and employment. Strategic targets and instruments of the strategy are elected in such a way that they could restrict the missing balance in mutual relationships between the economic, environmental and social pillar of sustainability. The target of public ROP “Northeast” interventions is to support the balanced development of all the parts of the region with the goal to reduce the existing regional disparities and to involve the region into the European structures. b) National Development Plan of ČR 2007–2013 (NRP) NRP base are basic strategic documents ofČRand EU, among others: Strategy of economic growth of CR, Convergence Program of CR, National Reform Program (National Lisbon Program 2005 -2008), Strategy of Regional Development, Strategy of Sustainability, Community Strategic Guidelines 2007- 2013 and Lisbon strategy. NRP describes setting the system of co-ordination of policy of economic and social cohesion and it specifies in detail the global target ofČRinto partial targets and priorities and defines the strategy to achieve these targets, including their involving into the structure of operational programmes. NRP provided particular starting points for NSRR elaboration. c) National Strategic Reference Framework (NSRR) NSRR is the political key document elaborated by the ČR– EU’ member state for the purpose of drawing financial aid from the structural funds of EU. NSRR is a document elaborated on the level of the EU’ member state, which is obligatorily r equired by the Council Regulation (EC) 1083/2006 of July 11, 2006 of general provisions of the European Fund for the Regional Development, European Social Fund and Cohesion Fund and of cancellation of the Regulation (EC) No. 1260/1999. NSRR is the first ČR document submitted to the European Commission after the approval by the CR’ government. In the next step, ROP “Northeast” is submitted, together with other operational programmes of CR. Through the implementation of the ROP Northeast targets and priority axes, the NSRR global target will be achieved. d) Strategy of CR’ Regional Development ČR (SRR ČR) SRR ČR contains goals, problematic issues and priorities to be tackled and achieved for the purpose of assuring the politics of regional development in the Czech Republic. This strategy connects the viewpoint of branches with the territorial aspects of a balanced regional development and territorial cohesion. It is the basic starting point for the creation of regional development programs and formulating regional attitudes and operational programmes. The strategy analysesČRspecifics and also respects EU priorities, is integrated into NRP/NSRR and its priorities are consistent with EU’ priorities for using structural funds. The prevailing part of the goals of the strategy will be implemented through operational programs specified in NSRR for the period 2007 – 2013. ROP “Northeast” is covering priorities of the strategy, which have regional dimensions and correspond to the

2 World Summit of Sustainability , Johannesburg 2002

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competences of regions, or to their possibility of better perceiving specifics of regions and opportunities for further development. e) Strategy of economic growth ofČR2005 – 2013 (SHR ČR) The target of SHR ČR is to bring the Czech Republic significantly nearer to the economic level of economically better developed countries of the European Union in an important way. Measured by the GDP indicator per one inhabitant, the country is able to reach EU average in 2003. SHR ČR concentrates on five priority spheres on which the competitiveness of the Czech economy is based. These are: Institutional Environment, Sources of Financing, Infrastructure, Development of Human Relationships and Research, Development and Innovations. ROP ”Northeast” takes into consideration especially those priority axis which the Northeast Cohesion Region may influence by its instruments/public intervention and competencies given by the legislation. f) National Reform Program ofČR(National Lisbon Program 2005 – 2008) The National Reform Program of ČR is a binding political document containing priorities and measures in the macro-economic and micro-economic region and policy of employment for the period 2005 - 2008. NRP concentrates on the key branches hindering the economic growth and competitiveness of CR. These are Entrepreneurial environment, Research and development, innovations, Sustainable utilization of sources, Modernization and development of transport and ICT networks, Flexibility of labour market, Taking hold at the labour market and Education. g) Policy of Regional Development of CR The politics of the regional development is the document approved by the government of CR- Resolution of No. 561 of May 17, 2006. This is the instrument of the regional planning, determining the requirements and the scope for the specification of tasks of the regional planning in the republic, cross-boarder and international context, especially with regard to the sustainability of the territory and determines the strategy and basic conditions for achieving these tasks. The policy of the regional development ofČRtakes into consideration the demands on the regional development, following for theČRfrom international contracts and membership in international organizations (UNO, OECD, European Council and European Union). It serves for the co-ordination of other branch conceptions, policy and strategies from the viewpoint of the sustainability of the territory.

3.3 Documents on Regional Level

The support of the regional development in theČRis implemented through strategic and program documents being elaborated on the level of the state, regions; program documents required by EU (for the utilization of sources of structural funds). The regional policy of the government is included in the program document Strategy of Regional Development of CR, which is a complete document on the national level without distinguishing partial economic policies of the government, in the scope of which the regional policy should be implemented. The strategy is specified in detail in the program documents, on the national level with the blanket influence on the territory of the state (sector development programs) and on the level of regions (regional development programs). The task of regions of Northeast Cohesion Region relies in the conceptional and executive activity of the local government bodies in the regional development. The bodies of regions represent the basic building unit of creation and implementation of regional development in CR, they co-ordinate the development of their territory, co-operate with the central administrative authorities of state administration and co-ordinate the interests of municipalities in matters of regional development. Strategic and program documents on the level of the region are: Strategy of region development – basic strategic document orientated on the development of the region in the longer time. Program of development of region territory (Program of region development) - tactical document, specifying strategic goals and development activities in the form of particular measures and project; it determines their bearers and determines the way of financing and implementation. The program of region development contains especially the analysis of the economic and social development of the region territory, characteristics of weak and strong points of its individual parts and the main directions of its development, determination of regions

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in the territory, the development of which shall be supported for the balanced development, together with stating the problem fields, on which the support shall be concentrated including the proposed measures, tasks and priorities. Further documents being elaborated are professional analyses concentrated on individual branches and subjects, which are important basic materials for defining regional strategies, or their goals and priorities. Programme documents on the level of Northeast Cohesion Region consists of: Regional Operational Programme – the tactical document elaborated on the level of the region, specifying the problem range of regional strategies, for which the co-financing from EU structural funds is required.

Among the main subjects of regional development on the regional level are: Bodies of Local government (Regional and Municipal Boards) Advisory and coordinating bodies (Regional Councils, Regional Coordinating Groups, thematically focused working groups) Development agencies with regional activities (Centre of European Projecting p.o. of the Hradec-Králové-Region, Agency of Regional Development, spol. s r.o. of the Liberec-Region, Regional Development Agency of the Pardubice-Region, CzechInvest etc.) Economic and Agrarian Chambers, associations, organizations of employees and employers, agencies Institutions of public sector (schools, medical and social facilities, cultural institutions a.o.), non-governmental non-profit organizations) Subjects of private sector

While elaborating the ROP “Northeast” the following documents representing initial basic materials were available, and based on them the elaborator formulated the strategy for achievement of goals and factual focus of public interventions of ROP Northeast:

the Liberec-Region Strategic documents Strategy of development of the Liberec-Region (updated 2006) Program of development of the Liberec-Region (updated 2006) Strategy of development of the Liberec-Region (2002) Program of development of the Liberec-Region (2004) Survey of further relevant documents and bases of the Liberec-Region: Analysis of business - entrepreneurial environment (2002) Strategy of sustainability of the Liberec-Region – working version (2005) A long-term intention of education and development of the educational system of the Liberec- Region (2003) Proposal of directions of development of social work and social services on the territory of the Liberec-Region (2002) Strategy of the development of the transport infrastructure of the Liberec-Region (2002) Analysis of the transport condition on the territory of the Liberec-Region (updated 2005) Program of development of tourism of the Liberec-Region (2003) Health service policy of the Liberec-Region (2002) Regional medical plan of the Liberec-Region (2003) Conception of protection of nature and landscape of the Liberec-Region ( 2004) Plan of waste treatment of the Liberec-Region (2004) the Hradec-Králové Region Strategic documents Strategy of development of the Hradec Králové-Region (1999) Strategy of development of the Hradec Králové-Region (updated 2005/2006) Program of development of the Hradec Králové-Region (2001) Program of development of the Hradec Králové-Region (updated 2003)

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Program of development of the Hradec Králové-Region (updated 2006) Survey of further relevant documents and bases of the Hradec-Králové-Region: Plan of development of water mains and sewerage of the Hradec-Králové Region (2004) Updated conception of environmental education (EVVO) of the Hradec-Králové-Region (2004) Conception of bike-transport of the Hradec-Králové-Region (2003) Rural development programme transformed for the conditions of the Hradec-Králové-Region (2004) Analysis of social situation of social services of the Hradec-Králové Region – Conception of social work and social services of the Hradec-Králové-Region (2001) Organization and financing the public mass transport of persons in the Hradec-Králové-Region (2003) Long-term intention of education and development of educational system of the Hradec-Králové- Region (2003) Conception of development of tourism (2002) Conception of protection of nature and landscape of the Hradec-Králové-Region ( 2004) Plan of waste treatment of the Hradec-Králové-Region (2004) the Pardubice-Region Strategic documents Strategy of development of the Pardubice-Region (1999) Program of development of the Pardubice-Region (2001) Program of development of the Pardubice-Region (updated 2003) Program of development of the Pardubice-Region (updated 2005/2006) Survey of further relevant documents and bases of the Pardubice-Region: Conception of activity of the Pardubice-Region in: development of human resources, life-long learning and employment in 2005-2008 (2004) Long-term intention of education and development of educational system of the Pardubice- Region (2003) Health services plan of the Pardubice-Region (2003) Health 21“ in conditions of the Pardubice-Region (2006) Analysis and conception of social services in 2004-2008 (2004) Territorial energetic conception of the Pardubice-Region (2004) Plan of development of water mains and sewerage of the Pardubice-Region (2004) Conception of EVVO of the Pardubice-Region (2003) Conception of nature protection of the Pardubice-Region (2004) Program of development of tourism in the tourist region of East Bohemia (2003) Conception of agricultural policy and rural development of the Pardubice-Region (2003) Plan of waste treatment of the Pardubice-Region (2004)

Priority axes and priority spheres proposed in the scope of updating of all the strategic documents have the factual connection to priority axes and spheres formulated in NSRR.

3.4 Legislation Relevant for the ROP “Northeast” Creation

ROP “Northeast” was prepared in accordance with the following EU documents: Regulation (EC) No. 1080/2006 of the European Parliament and Council of 5.7. 2006 of the European Regional Development Fund and repealing the Regulation (EC) No. 1783/1999; Regulation (EC) No. 1080/2006 of the European Parliament and Council of 5.7. 2006 of the European Social Fund and repealing the Regulation (EC) No.1784/1999; Council Regulation (EC) 1083/2006 of 11.7. 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and Cohesion Fund and repealing Regulation (EC) No. 1260/1999; Commission Regulation (EC) No 1828/2006 of 8.12. 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund

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(hereinafter the “General Regulation”) and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund; Council Decision of 6.10. 2006 on Community strategic guidelines on cohesion (2006/702/ES) ROP “Northeast” takes into consideration the following legislative documents of the Czech Republic: Act No. 248/2000 Col., of the support of regional development, in wording as amended, Act No.129/2000 Col., of regions, in wording as amended; Act No.47/2002 Col., of the support of small and middle-sized business, in wording as amended; Act No.114/1992 Col. of protection of nature and countryside, in wording as amended; Act No.218/2000 Col., of budget regulations, in wording as amended; Act No.250/2000 Col., of budget regulations of regional budgets, in wording as amended; Act No. 320/2001 Col., of financial control, in wording as amended; Act No.420/2004 Col., of review of economy of regional self-governing units, in wording as amended; Resolution ofČRgovernment No. 235/1998 of principles of regional policy of government (in topical version) Resolution ofČRgovernment No. 40/1999 of assuring the preparation for utilization of structural funds and Cohesion Fund of the European Union; Resolution ofČRgovernment No. 245/2005 to progress of preparation of the Czech Republic for drawing financial means from structural funds and from the Cohesion Fund of European Union in 2007 - 2013; Resolution of ČRgovernment No. 470/2001 to the draft of National Development Plan (updated version); Resolution of ČRgovernment No. 1242/2004 to the draft of Czech Republic’s Sustainability Strategy; Resolution of ČRgovernment No. 984/2005 to the draft of Economic Growth Strategy of the Czech Republic; Resolution of ČRgovernment No. 730/1998 of Rural Development Programme; Act No.185/2001 Col., of waste and change of some other Acts, in wording as amended. Act No.100/2001 Col., of evaluation of influences on the environment and of the change of some associated Acts (Act of Evaluation of Influences). Directive No. 457/2001 Col, of professional competency and modification of some other issues connected with evaluating influences on the environment.

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4 Analysis of Economic and Social Situation

The socio-economic analysis of Northeast Cohesion Region represents the basic material describing and analyzing the main development trends in the region, in all its main parts. A part of the analysis is the specification of the main problematic regions, their causes and their expected future development and possible impact on the development and competitiveness of the region. The analysis is based on the already elaborated strategically or thematically focused conceptual documents elaborated by all the regions of which Northeast Cohesion Region consists, as well as on other basic materials, having been evaluated by experts for the purpose of the following focus of the strategy aiming at achieving determined goals of the programme. The socio-economic analysis of the region is split in several main chapters specifying the position of the region within the CR, as well as within EU. In the scope of individual region parts, the analysis identifies the main negative factors and tendencies having the principal influence on the present and first of all future total position and competitiveness of the region not only in EU, but also in the world context.

The Northeast Cohesion Region is situated in the Central Europe; within the Czech Republic’s territory, the neighbouring regions are: NUTS II North-West, Central Bohemia, South-East and Central Moravia, in the North, it borders on the Federal Republic of Germany and in the East on Poland.

Picture No 1: Location of Northeast Cohesion Region

Source: GIS

The following summarizing table No 1 states the basic features of Northeast Cohesion Region, and the comparison of the stated indicators with the average for the Czech Republic and the EU 27 countries. For the comparison, first of all the main macro-economic indicators were utilized proving the contemporary state in the Northeast Region.

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Table No 1: Basic comparison of NUTS II Northeast with CZ and EU Indicator (unit, year) NUTS II Czech European Northeast Republic Union (EU-27) Population count (in thousands, 2004) 1479 10,207 489,671 Population density (persons/km2, 2004) 120.7 132.1 116.0 GDP per capita in PPP (EU27=100, 2004) 63.7 75.2 100 GDP growth (%; 1995 – 2004) 1.5 2.2 2.3 EAO employment share in the primary sector 4.0 4.0 6.2 (%; 2005) of the total EAO figure EAO employment share in the secondary 46.6 39.5 27.7 sector (%; 2005) of the total EAO figure EAO employment share in the tertiary sector 49.4 56.5 66.1 (%; 2005) of the total EAO figure Unemployment rate (%, 2005) 5.6 7.9 9.0 Source: 3rd Report on Economic and Social Cohesion

It follows from the stated table that Northeast Cohesion Region as well as its individual parts is deeply under the average level of the EU from the viewpoint of the total efficiency of economy.

4.1 General Characteristics

4.1.A Basic Characterization of the Region

The Northeast Cohesion Region is situated mainly along the northern to northeastern of the border of Bohemia with Germany and with Poland and the southern part of the Pardubice-Region stretches far into the middle highlands part of the Czech Republic. The urban centres of all three regions are located within 100 km from the capital of Prague. Northeast Cohesion Region takes with its total area of 12 439, 6 km2 15.8% of theČR area and on its territory in total 1 488 168 inhabitants lived as on 1.1. 2007 according to Czech Statistical Office (ČSÚ), which represents 14.5% population of the whole CR. The average population density of Northeast Region is by approximately 10 % lower than in theČRand as on January 1, 2005 it was 120,7 inhabitants per km2. The share of the town inhabitants is 68. 5%, i.e. approx. 2% less than the average of the CR. An unemploymnet rate (proprotion of persons with single or main job in a group of 15-64 year old) as on January 1, 2006 reached 65.6%. The morphology of region terrain is very manifold with the high vertical segmentation – from the lowest places of the lowland Polabská nížina with the altitude in the range of 200 – 300 m, to the mountainous Northern to Eastern border mountain strip (Lužické hory, Jizerské hory, Krkonoše with the highest mountain of the Czech Republic, Sněžka – the altitude of 1602 m, and Orlické hory). The continental type of climate prevails. The warmest, mildly dry region with the mild winter is the lowland Polabská nížina. The hilly to mountainous part of the region is characterized by the less favourable climate with colder winter and higher intensity of precipitation. The most important water flow is the Labe river. The Northeast Cohesion Region may be characterized as agricultural-industrial region with developed services and tourism. Characteristic is the long-term tradition of some industrial branches – machinery, textile production, food industry, building industry, chemical and electrical industry especially in the Pardubice-Region, glass industry and jewellery production in the Liberec-Region, production of music instruments in the Hradec-Králové-Region. The centre of industrial base is concentrated in big towns and their surroundings. Also the agglomerated regions of Hradecko- Pardubicko-Chrudimsko and Liberecko-Jablonecko have a strong economic position. In comparison with it, there are economically weak regions (Frýdlantsko, Moravskotřebovsko) in Northeast Cohesion Region. The economic development of the region is limited by bad transport connection of some parts of the territory (absence of highways and highway-type streets, railway connection of not good quality).

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The intensive agricultural production has a long tradition in the region, based on the existence of favourable conditions for the agricultural primary production associated with processing industry. It is developed first of all in the lowland of Polabská nížina, one of most fertile places of the CR. After 1989 the privatization and restructuring of economic base resulted in slump of agricultural and industrial production. In comparison with it, the importance of the sector of services started to increase more rapidly. The small and medium-sized business develops. The inflow of foreign investments is considerable. Very favourable is the total export effectiveness of the Northeast Region per one inhabitant (3.-5. place amongČRregions). More than 80% of the export goes to EU-25 countries. The regional GDP NUTS II Northeast per 1 inhabitant in PPS achieved the value of 59.9% of the level EU-25 (average inČRincluding Prague was 70.5%) in 2004. In relation to theČRthe Northeast Cohesion Region moves around 84% GDP per 1 inhabitant. The average wage in the Northeast Region represented 86.6% of the average wage inČRin 2006. The average rate of the unemployment moves under theČRaverage in the long term horizon, however, it is differentiated regionally. Gradually, the employment in the tertiary sector increases, the employment in primary sector is typical of rural district. The rich natural and cultural diversity of the region, many landscape types, attractiveness of natural localities and quality environment are good pre-conditions for the development of tourism. Attractive are first of all the areas with high natural potential (Krkonoše, Český ráj, Orlické hory, Jizerské hory), with a rich cultural heritage and sights and areas with spas. The rich and manifold natural potential represents a good foundation for the development of new forms of tourism (agro tourism, ecotourism, bike-tourism etc.). The tourism in the Northeast Region with its dynamic development influences the development of associated services and contributes to the creation of new jobs. The Northeast Cohesion Region is one of most visited regions within the CR.

4.1.A.1 Administrative Division of Region NUTS II Northeast unit consists of three autonomous regions – Hradec Králové, Liberec and Pardubice, corresponding to NUTS III level. Moreover, every region is divided to municipalities with the extended powers (ORP); there are 15 in the Hradec-Králové Region and 15 in the Pardubice- Region and 10 in the Liberec-Region. The region is divided territorially in 1 116 independent municipalities of which 111 have the statute of the town.

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Picture No 2: Administrative division of Northeast Cohesion Region – source: GIS (Legend: Centre of Regions, Centres of districts, ORP, borders of NUTS 2, borders of regions, borders of districts)

4.1.B Analysis of Settlement Structure

Within Northeast Cohesion Region there are two important urban areas of nation-wide importance. The Hradecko-pardubicko agglomeration has two main centres – Hradec Králové and Pardubice, which are functionally connected with smaller centres (Pardubice with Chrudim, Hradec Králové with Jaroměř) and represent the basic urbanization axis of East Bohemia. The Liberecko-jablonecko- agglomeration is dominating and it creates the highly urbanized space of the Northeastern part of the CR. The partial urbanized spaces exist in the background of former district towns having the function of regional centres of the settlement. As for the size structure of municipalities, there is a considerably higher share of smaller municipalities and smaller share of big cities in comparison withČRaverage. The number of inhabitants living in smallest municipalities exceeds the average republic value. The higher share of inhabitants living in smaller municipalities is within Northeast Region typical first of all for the traditional agricultural regions, regions of foothills and Eastern part of the region. The settlement structure of Northeast Cohesion Region shows the signs of disintegrated and non- homogeneous structure of settlement and unequal density of settlement. For the comprehensive analytic evaluation of the settlement structure of the Northeast Region the split to administrative ORP regions exists, which differentiates internally the cohesion region to smaller territorial units. Their determination, size as well as internal structure is very different and in many times it does not correspond to real internal connections in the territory. For ORP units, the sequence depending on the value of phenomenon occurrence was determined and the lowest sum of these values indicates the region with established lowest heterogeneity of settlement.

For the summarizing evaluation of seat structure, the following indicators were applied: Population density (number of inhabitants/km2 territory) Average size of municipality (number of municipalities/km2 of territory)

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Share of the number of municipalities up to 999 inhabitants (%) Share of inhabitants in the municipalities up to 999 inhabitants (%)

Table No 2: Indicators of seat structure for NUTS II Northeast regions Share of Population municipalities Share of inhab. density in Average size of up to 999 in municipalities Territory inhab./km2 municipality inhabit. in % up to 999 in % the Hradec-Králové- Region 115,1 83,0 23,4 115,1 the Pardubice-Region 111,9 83,6 26,6 111,9 the Liberec-Region 135,2 73,5 15,5 135,2 NUTS II Northeast 119,0 81,4 22,2 119,0 Czech Republic 129,5 78,7 17,2 129,5 Source of data: ČSÚ2007

By the evaluation of correlating factors, the regions with at most disintegrated settlement structure are identified. The least urbanized region is the Pardubice-Region, whilst the Liberec-Region is among the most urbanized regions withinČR(together with Ústí-Region and Moravian-Silesian-Region). For the Liberec-Region the less disintegrated settlement structure with a higher share of municipalities above 5000 inhabitants is characteristic. The region is dominated by the important liberecko-jablonecko- agglomeration with adjoining districts of ORP Tanvald, Železný Brod, Turnov. For the Pardubice- Region the higher share of small municipalities up to 999 inhabitants is typical. The settlement disintegration is visible within the Pardubice-Region mainly in the South and East of the region. These are hilly to mountainous and less economically developed regions. The population density in these regions is above average. The dominant region with the least disintegrated settlement structure is the district of Pardubice, being a part of hradecko-pardubicko-agglomeration with a high economic potential, well-developed industry and very favourable conditions for intensive agriculture. The Hradec-Králové-Region shows as for settlement structure the higher extent of heterogeneity and disintegration in the South-Eastern (Rychnovsko, Dobruška), mainly mountainous parts of the region and in the Western part of the region (Novobydžovsko, Hořice and Jičín) characterized by intensive agriculture. It may be stated in the total Northeast Cohesion Region that the most heterogeneous and disintegrated settlement structure is in the Pardubice-Region. The Liberec-Region is, on the contrary, one of the most urbanized. The differentiation in the territorial administrative districts of lower grade is significant. The heterogeneity of settlement structure can be seen at most in the South-East part of the territory, in the Central Western part and peripherally lying districts of Frýdlant and Broumov. More favourable is the settlement structure in agglomerated regions and in the Northern half of NUTS II Northeast territory; here, this fact is influenced especially by the lower share of municipalities up to 999 inhabitants and share of inhabitants living in smaller municipalities.

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Picture No 2: Analysis of Settlement Structure of the Northeast Cohesion Region pursuant ORP

Source of data: ČSÚ Legend: Borders of regions Evaluation of settlement structure Minimum disintegration Less disintegration Average disintegration Higher disintegration Maximum disintegrated

4.2 Development of Economy of the Region in Context of the Czech Republic and EU

4.2.A Macro-economic Analysis of the Region

After the economic drop and problems with external balance the Czech economy shows in the second half of the 90s of the 20th century the stabile economic growth associated with a number of positive trends. These are mainly the stabilization of the price level, continuing restructuring of economy, increase of work productivity and decrease of the deficit of business balance. Negative trends may be seen in the field of the growing deficit of public budgets, endangering the stability of economy as the basic pre-condition for the gradual economic convergence ofČRto EU.

4.2.A.1 Gross Domestic Product The NUTS II Northeast Region is, as for GDP per inhabitant, among the normally developed regions of the CR. The development of GDP in permanent prices showed in the last years (1996 – 2004) the similar dynamics as other regions of the state. In 1999 – 2005, the average inter-annual growth by 2.4%3 was registered in the Liberec-Region, by 2.9% in the Hradec-Králové-Region and by 2.8% in the Pardubice-Region in a whole NUTSII region Northeast 2.7% (it was 3.2% for the whole CR). In 2004 (2005), the growth of GDP in constant prices by 8.3% was registered in the Liberec-Region, by 6,7% in the Hradec-Králové-Region and 5,4% in the Pardubice-Region, in the whole NUTSII region Northeast 6.7% . The growth of 6.4% was indicated for the whole ČR in 2005 (the data are not at disposal for 2005). The economic cycle of the region does not show considerable differences in comparison with the values stated for the whole CR. Whilst the limit inter-annual growth values in regions of the wholeČRare 8.7% on average, the limit values stated by individual regions of NUTS II Northeast-Region are 2.9% on average. This finding may be considered for a strong feature of the region, as there are no considerable deviations connected very often with a high share of one or two completely dominant industrial branches, having a long-term influence on the region economy.

3 All data concerning GDP growth are based on CSO sources

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As for the amount of GDP per inhabitant, the region is amongČRnormally developed regions; its share is in the long-term horizon 80 – 90% ofČRaverage. The situation in individual regions is very different, e.g. in 2005 – 80% ofČRaverage was achieved in the Liberec-Region, 89.4% in the Hradec-Králové- Region and 82.5% in the Pardubice-Region. A different economic level is of a long-term character, however, it is impossible to speak about a higher or lower economic prosperity of individual regions. Similar disparities may be found also in other regions of CR. The process of economic convergence of the region to EU-25-average shows a stabile rapidity since 2000. GDP per inhabitant of the region achieved 14 595 EUR in purchasing power parity4 in 2005, which corresponds to 62.1 % of EU-25 level (average ofČRwithout Prague is 73.7%). In the last five years, the region approached to EU average only by 3.8 percent points (the whole ČR by 7.6 percent points). Latest data are not at disposal. In the following period 2007 - 2010 it is generally supposed that the current dynamics of growth will increase in connection with the slow economic enlivening in the EU-15 states. Despite the growth of productivity of production factors, the convergence speed is very slow and it will last many years before the region achieves 75% of EU-25 average.

4.2.A.2 Direct Foreign Investments The input of foreign investments and activity of multinational companies in theČRas well as in the region accelerated in the last years the speed of irreversible economic processes in the form of restructuring the economy and enabled to the domestic economy an easy entry into the economic space of EU. Between years 2000 and 2003 (latter data can´t be identified) the growth of foreign investments by almost 68% was registered in the region (by 42 % in the whole CR). The share of individual regions in the direct foreign investments inČRis not very high in the long-term horizon; in 2005 (newer regional data are not available) the Liberec-Region had the share of 3.1%, the Hradec- Králové-Region of 1.6% and the Pardubice-Region by 2.4%. A completely dominant position has Prague; its share in total foreign investments in theČRrepresents almost one half. The cause of this development is the higher interest of foreign companies for the Prague locality, profiting from its position of the political and economic centre. The hitherto economic policy of the state in the field of direct foreign investments resulted in the arrival of investors, being motivated to a large extent by low wages, industrial zones invested from public sources and long-term tax allowance. Up to now, this policy was very successful; it spared the state the expenses connected with the unemployment. However, this policy will have unfavourable influence in the longer time horizon, as the temporary character of the localization of investments depending mainly on the timely limited advantages of low costs and investment incentives may become evident. After exhausting these temporary advantages (offer of cheap development areas, often connected with tax holidays and relatively free ecologic standards) these activities may be redirected to regions and states offering even lower costs (including lower wages). In future, it will be necessary to change the direction of dependency of the inland economy on the foreign capital in relation of dependency of foreign companies on the region, but mainly on the favourable business environment and qualified labour force of a good quality. The solution is the maximum connection of activities of foreign companies with Czech ones not only within sub-supplier relations, but also in the field of research and development.

4.2.A.3 Export Efficiency The share of the export of goods and services in GDP achieves 65% in the long-term horizon. The development in export from the region copies truly the similar trend in the whole CR. The export dynamics was positively influenced by the removal of business barriers with EU states, development of inland business connections and especially West-European companies, growth of economy in the old EU member states and increasing competitiveness of the inland goods and services as for the relation price/quality and high increase of sales of processing industry. The share of the EU-25 states in the total export of individual regions did not show considerable differences and moved from 80% in case of the Liberec-Region up to 82% of the Hradec-Králové and the Pardubice-Region. The position of other territorial groups in the export of individual regions was considerably weaker in comparison with the position of EU-25 states. The largest share in the total export from the region into the EU-25-states represented the export to Germany in 2004 with 38 - 39% of the total export into EU-25 states, than the export to France, Great Britain and Slovakia with approximately identical share (4.8% – 7%)5.

4 Parity of purchasing power (PPS) is the relation between two currencies of different countries, expressing the ability to buy the same basket of goods in both countries. 5 Export data come from ČSÚ (Czech Statistical Authority)

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The share of Northeast Cohesion Region in the national-wide export represented 17.6% in 2005; the highest share reached: the Pardubice-Region (7.6%), the Hradec-Králové-Region (5%) and the Liberec-Region (5%). The differences in the share of individual regions in the total Czech export are influenced first of all by the location of production capacities of companies with the foreign capital participation orientated almost exclusively on export.

Table No 3: Exports by NE Cohesion Region in 2005

Share in Share in Region Export item export of export of CR region Machines and means of transport 48% 4.7% the Liberec- Semi-finished products and materials 29.8% 6.8% Region Industrial consumer goods 15.7% 6.8% Chemicals, etc. 4.1% 3.3% Machines and means of transport 51% 5% the Hradec Semi-finished products and materials 31% 7.1% Králové-Region Industrial consumer goods 8.3% 3.6% Raw inedibles excluding fuels 4.1% 8% Machines and means of transport 77.8% 11.7% the Pardubice- Semi-finished products and materials 9.9% 3.5% Region Industrial consumer goods 5.3% 3.5% Chemicals, etc. 3.3% 4% Source: ČSÚ

In the Liberec-Region, the above mentioned items constituted 97.6% of total exports from the region (among the most frequent items: parts and attachment of motor vehicles, glass goods, furniture, and equipment for warming, cooling and their parts). In the Hradec-Králové-Region, the stated items had a 94.4% share of total exports from the region (the most frequent items were: parts and attachment of motor vehicles, cars and vehicles for passenger transport, iron and steel scrap, iron and steel ingots, equipment for warming and cooling and their parts). In the Pardubice-Region the stated items constituted 96.3% in the total exports of the region (most frequent items: appliances for automatic data processing, peripheral units, telecommunication equipment, attachment for TV, radio, other electric appliances and machines and other equipment for certain industrial branches). The sector split of the industry throughout the whole region is different, the only exception is the production of road vehicles and its sub-supplies, having become a dominating branch especially in the Liberec-Region, which can cause problems in future in form of inquiry drop. The main cause may be a hard competition from the part of Asian car factories, or the shift of current production capacities into the countries offering cheap labour forces and even better investment incentives. Similar problems can concern the Pardubice-Region, especially the Pardubicko-region orientated to a considerable extent to the electrical industry, which can be explained by the arrival of the group of companies with identical branch orientation. The activities of the government and regional State administration in the field of increase of business investments must be coordinated in future and they should not have such a significant branch orientation.

Table No 4: Selected economic and business indicators Indicator (unit, year) NUTS II Czech Republic Northeast Export value (mil. Kč; 2005) 330,192 (17.6% CZ) 1,876,863 Value of direct foreign investment (mil. Kč; 2005) 106,641 (7.15% CZ) 1,492,564 Direct foreign investment per capita (thous. Kč; 2005) 71.97 145.75 Source: ČSÚ, ČNB 2006

4.2.A.4 Unemployment The unemployment rate increased rapidly in the second half of the 90s of the last century in connection with the total restructuring of the economy and incoming pressure on the productivity

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increase from the part of the management of private companies. For the Northeast Cohesion Region the registered unemployment level increased to 8,1% (9,4% in CR)6. The progress of the unemployment level after 2000 gained unsteady character. In 2000 the unemployment level in the cohesion region dropped to 6,7%, then it kept increasing till 2004 when it reached nearly 9%, followed by decrease of registered unemployment rate – it dropped to 6,6% in December 2006, down to 5,4 in May 2007. Within the entire CR, the unemployment rate in the Hradec-Králové Region resides below the average level. The main limiting factor of the higher unemployment is the absence of the branches with concentration of a high number of labour forces, e.g. metallurgy, heavy machinery etc. affected with economic decline in the past. The stagnating unemployment rate in the last years is especially the consequence of continuing restructuring of companies and the increased pressure on the work productivity, efficiency and effectiveness. The region has a long-term lower unemployment rate in comparison with the EU average, and also with the countries of Central Europe, first of all Poland and Slovakia. At the turn of the millenium the share of long-term job applicants increased within the entire CR; from 30% in 1999 up to 38% in 2000 (25% to 33% within the cohesion region). This share had been mildly increasing in the following years. In the present the share of long-term job applicants has stabilized at 41% level withinČRand 35% level within the cohesion region. Owing to the strong Economic growth together with demographic changes (strong age-groups leaving the labour market and weaker age- groups entering it) the decrease of number of job applicants per one vacancy has been achieved – in comparison to the year 2004 the number of job applicants dropped from 10,1 to 2,5 in May 2007. In May 2007 the most applicants per one vacancy were registered in the Liberec-Region (3,2), followed by the Hradec-Králové-Region (2,8) and than the Pardubice-Region (1,9). The average in theČRrepresents almost 3,2 applicants per one vacancy. On the territory of individual regions, there are apparent differences in the unemployment rate, which is the consequence of the decline of traditional production not able to compete with cheap Asian goods (example is the textile industry located first of all in the Hradec-Králové-Region). The trend of the growth of the jobs in other branches registering the growth of sales and export (production of car components, plastics, electrical industry, building industry) acts against the unemployment growth in the last years.

Picture No 4: Unemployment rate as per administrative ORP districts in NUTS II NE in 2004 (in %)

Source: MPSV2005 Legend: Border of NUTS 2 Border of regions Employment rate (in %) up to 7.5 15 and more

6 Unemployment data coming from the Czech Statistic Authority

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An important influence on the regional differences in the unemployment rate has the qualification discrepancy between the offer and demand on the labour market. The solution of this problem consists first of all in improving the system of life-long learning, or increasing adaptability of all the institutions of the educational system to the qualification demands of the employers in the field of re- qualification and offer of studying branches. It is necessary to change the attitude to the educational system in such a way that the employers, school graduates and participants of courses and job candidates gain the position of clients. The educational institutions should apply a similar attitude as to clients in private sphere. A considerable influence on the higher unemployment in some parts of the region is exerted also by real possibilities to move or to commute to work. In this aspect, the higher unemployment in border regions is visible as well as in regions with a lower settlement rate. The State administration and Local government should concentrate on the transport availability as not only the unemployment would be treated, but also the problem of maintaining the inhabitants in the less populated parts of the region, especially of young people having the tendency to move into towns and its surroundings. The high unemployment rate is often connected with the wrong system of payment of benefits, high minimum wages and life minimum, but also with other factors, preventing the flexible functioning of labour market. Particular measures which would improve the position of employers and employees are in powers of the government and the Parliament of CR. In the middle-term horizon we can expect a mild drop of unemployment in connection with the continuing economic growth. In the long-term horizon, the development of unemployment rate will be very strongly influenced by the ability of company sphere to react on the growing competition of developing economy of other countries and directing the economic potential of the region on the production and services with the high added value.

4.3 Business and Knowledge Economy

4.3.A Analysis of Business Sector of Region

The decisive sectors of Northeast Cohesion Region participating in the GDP-creation from the viewpoint of structure of creation of gross added value are processing industry, building industry and services, having a long-term share of 90 - 95%, the rest are agriculture, forestry and fishing.

4.3.A.1 Processing Industry The processing industry is one of the decisive subjects of economic activity and economic growth in the region. Generally its share in the gross added value (HPH) 2003 – 2005 did not change dramatically; in the Liberec-Region increased from 38.2% to 40.4%, in the Hradec-Králové-Region increased from 30.2% to 31.2%, on the contrary in the Pardubice-Region it has decreased mildly from 32.5% to 31.5%. The processing industry has at present the dominant share in the goods export. A number of factors have the positive influence on the development of sales in the last year; the most important factor is the growing competitiveness of inland production in relation price/quality, improving the marketability of goods. In spite of the lower economic growth in EU-15 countries where the decisive volume of export is directed, the interest in goods coming from the Northeast-Region had positive influence, be it the direct export or sub-supplies being a part of the export production. An important share in this trend have the companies under the foreign control orientated on foreign markets to a high extent. The investment from the past paid off as a number of new production capacities was put in operation especially in the electrical industry, mechanical engineering and production delivering parts, components and attachment to car industry. In the last years, also the results of structural changes of the Czech companies and their financial consolidation after the termination of the debt financing on the purchase of the property within the privatization of the state property became evident.

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Talbe No 5: Sales for the sale of own products and services of industrial character as per OKEČ*) branches in mil CZK, usual prices Branch 2002 2003 2004 2005 2003/2002 2004/2003 2005/2004 Industry in total 240 624 276 474 314 431 328 652 114,9% 113,7% 104,5% therein: D Processing industry 229 948 265 831 303 426 315 300 115,6% 114,1% 103,9% DA Production of food and drinks, 15 965 16 678 17 652 19 055 104,5% 105,8% 107,9% tobacco products DB Production of textile and clothing 18 752 18 466 18 256 17 136 98,5% 98,9% 93,9% DH Production of rubber and plastic 13 646 11 174 13 220 14 154 81,9% 118,3% 107,1% products DI Prod. of other non-metal mineral 17 142 17 460 19 080 - 101,9% 109,3% - products DJ Production of basic metals, 16 492 17 871 23 616 24 590 108,4% 132,1% 104,1% metallurgic and metal products DK Production and repairs of machines and equipment not stated 18 123 17 325 21 785 31 441 95,6% 125,7% 144,3% elsewhere DL Production of el. optic. 60 220 81 069 95 001 87 139 134,6% 117,2% 91,7% appliances and equip. DM Production of transport means 35 852 43 756 48 782 50 367 122,0% 111,5% 103,2% and equip. DN Processing industry not stated 19 527 21 750 24 025 25 987 111,4% 110,5% 108,2% elsewhere *) Enterprises with 100 and more employees residing in NUTS II NE Source: Statistical yearbook of ČSÚ

Production of transport means is for the Liberec-Region the dominating branch, on which a number of important sub-suppliers depend. In the whole region, this branch participated in the total sales of the processing industry with 15.4% in 2005. The branch of electrical and optical appliances and equipment participates to a large extent in the economic prosperity of the whole the Pardubice- Region, especially of Pardubice surroundings. Its share on the sales of the processing industry of the Pardubice-Region represents 30.2%. The only branch of the region, where the sales decreases in the long-term horizon is the production of textile and clothing; the share of this sector in the sales of the processing industry dropped by 25% in the last 2 years, first of all in the Hradec-Králové-Region. The development of this branch with the low share of the foreign capital and high laboriousness was unfavourably influenced by high import of cheap production from developing especially Asian countries to which the inland producers cannot compete in prices. The share of production of rubber and plastic products dropped by 26% in spite of mild growth of sales. Also the production of food industry, drinks and tobacco products registered the drop of share by 15%. All the other sectors of the processing industry have a long-term identical share in the regional sales about 4-7% with the mild growth or stagnation of sales. The productivity of production factors, especially of the work grew very quickly in the last years. This statement may be documented by comparing the high growth of sales and decreasing employment in the processing industry between years 2001 – 2004 (by 3.1%). It is visible on this indicator what emphasis is laid on the effectiveness of the economy and on the increase of the economic effectiveness by the industrial sphere. However, it is impossible for the reason of missing data bases to analyze the work productivity as per the proprietary structure of companies. In this case the success of foreign companies is accentuated generally, but also the productivity of work and the effectiveness of the Czech companies grows continually, which may be documented especially by their export effectiveness and acting in the position of sub suppliers of foreign companies and companies with the foreign capital participation concentrating almost exclusively on export.

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Table No 6: Sectors of processing industry in individual regions of NE Cohesion Region in 2005 (NUTSII NE = 100%)

the the the Hradec- Branch Liberec- Pardubice- Králové-Region Region Region DA Production of food products and drinks, tobacco products 17,40% 47,80% 34,80% DB Production of textiles and clothing 23,40% 44,70% 31,90% DH Production of rubber and plastic products 37,50% 31,30% 31,30% DI Production of other non-metal mineral products 65,40% 23,10% 11,50% DJ Production of basic metals, metallurgic and metal products 21,30% 46,80% 31,90% DK Production and repairs of machines and equipment not stated elsewhere 22,20% 36,50% 41,30% DL Production of electrical optic appliances and equip. 26,70% 40,00% 33,30% DM Production of transport means and equipment 46,20% 19,20% 34,60% DN Processing industry not stated elsewhere 44,00% 32,00% 24,00% Source: ČSÚ 2006

The boom or drop of individual sectors reflects very differently in the prosperity of regions, which corresponds to the share of sales of a particular branch in the total sales of the region. This trend may have a very strong impact on the economy of regions in the time of economic recession of importantly present branches and associated production. The Liberec-Region is in this direction strongly depending especially on the car industry (Liberecko), which can cause problems not only to car factories, but also to capital-weaker Czech suppliers having a high share in sales from sub supplies. In the Pardubice-Region the electrical industry is very important (Pardubicko). The Hradec-Králové- Region has already experienced the impact of the strong competition of Asian producers through the bankruptcy of many textile producers. The problems connected with the effort to compete with the production based on the low costs of work, its high intensity and non-standard work conditions manifested themselves in the full range. The competitiveness of the Czech producers must be based on invention, high quality, modern design, and for the capital-stronger companies on introducing the results of science and research. It is necessary to improve the communication between companies and research and development institutes and universities, based on which the production sphere would formulate its requirements with the goal of the essential improvement of the production quality, launching new materials etc. In this direction, it is possible to utilize the current high potential of universities and research institutes. An important condition for obtaining a better position at the global market is utilization of benefits from the connection of related subjects in the form of clusters or other productive or business associations. In this field, a number of cluster initiatives were registered developing the activity already (e.g. the production of plastic products), most of them having the form of an intention. The cause of the slow pace of co-operation of companies in the field of research and development, clusters and other associations are especially the high financial and time demands of the procedure of innovation application, especially of productive ones. A considerable barrier in the further development of the inland companies is the absence of suitable premises, production areas and buildings for business utilization, or their limited utilization for the reason of a bad constructional and technical condition, missing or insufficient infrastructure. The regions have studies available, in which the potential areas and buildings are mapped; up to now, however, no studies have been elaborated, which would unanimously answer the question of the extent of their real usability for the potential investor in the sense of investment volume, particular permitted activities in the locality, possibility to establish the co-operation with the companies in the region etc. The basic pre-conditions for improving the state of these real estates are the sufficient amount of financial means for their reconstruction and revitalization.

4.3.A.2 Services In the long-term horizon, the sector of services participates in the gross added value of the region of approx. 50%. After 1990 the sector of services grew dynamically, especially in the field of the business with consumer’s goods, transport, telecommunications and financial intermediation. The cause was

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the preceding considerable under-dimensioning of this sector and the orientation of domestic economy on the processing industry. In connection with the technological progress and the growing purchase effective demand in the last years the services in the field of the telecommunications and information technologies offering completely new products and services extended considerably. It is the merit of the private sector and inhabitants with a good relationship to new technologies. Further development is hindered by high investment costs on building-up the network, purchase of computer technology, software etc. A big barrier in the further development of information technologies and associated fields applying modern technologies is the orientation of the educational system on memorization unnecessary knowledge in spite of accentuating the problem-orientated teaching with the pressure on acquiring the skills necessary to gain new information, their analyzing and evaluation. This fact becomes important in the last years, when the multinational companies perform activities consisting in the move of the research and development centres into the CR. It is necessary to state that in the Northeast-Region the projects establishing technological, logistic and service centres providing highly specialized services for the whole territory of the CR, or Europe have not been implemented yet. These services were and are concentrated especially in Prague for the reason of favourable geographic position, transport availability and the high number of qualified labour forces. In the time of “information-based society”, however, there are no reasons, why similar activities could not be located outside Prague. The region has a big potential in the technologically focused fields and associated services consisting in the sufficient amount of technically (or on natural sciences) concentrated high schools and universities. The next field with the possible high potential in future is providing services for the business sphere especially educating employees, providing consultations, marketing services, providing information in the field of innovations etc. This statement is based on the existence of the network of schools and high number of consulting companies. The cause of the low utilization of this kind of services is the lack of financial means for their purchase. The companies put their money in the main activities, the expenses on other activities are considered by them non-effective or risky, without a visible immediate effect. In this field, the participation of public interventions by the state or State administration could be helpful, and it could be implemented not only in the form of the co-participation, but also by creating infrastructure for the consulting network for the small and medium-sized enterprises, having big potential in many cases, however, not sufficient financial sources enabling them to utilize these services to a higher extent.

4.3.A.3 Structure of Economic Subjects The Czech economy underwent the system change consisting in targeted principal change of the economic environment in the direction of application of market economy principles in the 90s of the last century. Private entrepreneurial subjects, especially of the small and medium size came into being in connection with the privatization of the state property, restitutions, the most numerous part based on the own individual decision of their founders. The most companies in the region have up to 500 employees, and are considered generally for the pillar of economy in relation to share in GDP- creation and employment. The capital force of these companies in the time of their foundation was considerably hampered by re-payment of bank credits associated with the privatization of the state property. This investment activity burdened the economy of companies for many years and it hindered their further development due to preferring re-payment of debts to own development. A number of companies used their business contacts and enabled the entry of the foreign owner to increase their capital strength and market position associated with the built-up business network, innovations, marketing and managerial experience of the new investor. A strength of the region is also the uniform spreading of small and medium-sized companies in the whole territory, which is of great importance for the employment and documents the ability of inhabitants to acquire and to maintain economic activity and to put their abilities into effect at the market. Limit values of the number of such companies on the territory of municipalities with extended powers (ORP) represent 29.1 – 55.9 small and 7.7 – 15 medium-sized companies. The rapid growth of the number of companies starting from the year 1990 became constant after 10 years of business doing in the CR. The small and medium-sized enterprises have the highest share of approx. 70 – 80% of all the employed labour forces. The self-employed and big companies above 250 employees have the same share. In the 90s of the last century, first of all small and medium-sized enterprises absorbed a considerable part of labour forces which would go to Bureaus of Employment after restructuring and cancellation of big former state companies.

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4.3.A.4 Enterprises with Foreign Capital Participation The enterprises with foreign capital participation became the stabilizer of economic activities for many Czech companies in the last years. The most foreign investors entered into existing companies when it bough the capital interest from the original Czech owners and then it expanded the production program. The perspective companies struggling with privatization debts, loss of Eastern markets and with high economic loss began to flourish again. The foreign owner enabled to utilize the build-up foreign sales network, experiences from the international market and new technologies, through which it will be possible to produce quality goods. The fact is that only a few foreign companies built-up new enterprises “on a green field“, only a low percent invested in abandoned premises. The cause was a bad or unsuitable technical condition of premises often burdened with ecological damages. From the total number of foreign companies registered in 2004 the companies with international property (mixed property of Czech and foreign subjects) represented 44%, companies, those owned by a foreign subject of 100% represented 56%. From the viewpoint of the size of these companies as per the number of employees the number of medium-sized companies was higher in comparison with the Czech companies, which is associated with their better capital equipment. The percentage shares of the total number of companies in the region are as follows: 100 - 499 employees - 23% foreign companies, 500 -999 employees - 38%, above 1 000 employees - even 64%. The indicator shows the quite high dependence of the economy of the region and employment on the foreign capital; if we compare the sales, this share would be even much higher with a high probability. A completely principal condition for remaining foreign investor in the region is the ability of labour forces to add to products a higher added value, higher than in other regions and states. This factor creates together with the wages and associated costs, geographic location and quality business environment pre-conditions for a long-term sustainability of economic activities in the region. The key foreign companies of the region are big companies with 250 and more employees, which play a decisive part in the economy of the region. As for connection of foreign and Czech companies by sub-supplier relationships, no analysis has been elaborated so far mapping and analyzing the extent of dependence of these subjects, the direction and importance, not only as for sales, but also as for the employment.

4.3.B Analysis of Business Environment

4.3.B.1 Co-operation of Companies The business subjects co-operate at present almost exclusively on the level of common supplier- relationships and the co-operation of complementing companies within a branch association for the purpose of strengthening the position at the market, sharing sources in research and development of other common activities is missing. The companies act individually at the market and do not utilize the synergy from the co-operation. The cause is the mutual distrust and misunderstanding of contemporary challenges; however, the win-win co-operation is one of the ways to higher competitiveness at the market. In the last years, the co-operation of the companies in the form of branch associations - clusters gains importance. The important branches with a real chance on creation of clusters are clearly: car industry and production of car components, textile industry, pharmacy and medicine incl. the production of medical aids or production of electrical machines and equipment, electrical engineering, technological chemistry, jewellery, glass, furniture, plastics, machinery and food industry. Nevertheless, the important potential have the branches with local deposits of natural materials (stone-industry) or branches with a strong expansion thanks to demand of foreign investors (packing, plastics) or changes of legislation, environment-friendly branches (renewable energy sources). Based on the available statistic data it will be possible to create the cluster in the rubber-making production or in the field of life-long-learning or professional education. The hitherto practice showed that the cluster initiatives having bet on a special kind of the product with traditional roots in the region and a high added value thanks to special materials have the highest chance to success.

Process of cluster creation may be influenced positively by public intervention of regions in the form of public initiatives leading to cluster foundation in the fields where you can lean on a long-term tradition, existing network of universities, research organizations etc.

4.3.B.2 Business Infrastructure Industrial Zones and Areas

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The Liberec-Region has in the register several hundred hectares of significant development and investment areas. The most important ones are: industrial zone of Liberec - South, other larger zone is in Hrádek nad Nisou. The industrial zone in Liberec is a successful project, based on which a number of foreign investments were implemented. The Liberec-Region ordered in the past processing the database of industrial zones containing finally hundreds of areas with a different size and way of utilization. The project target was also to increase the preparedness of the region in the field of offer of suitable areas to potential investors. Also the Hradec-Králové-Region owns the study, the aim of which was to select five main localities with the area exceeding 100 ha, which would be suitable for the foundation of industrial zones in the surroundings of the highway constructed at present and highway-type streets, including quantification of costs of associated infrastructure. Besides these localities, there is an industrial zone in the Hradec- Králové-Region in Jičín, where several foreign companies are located and the industrial zone in Kvasiny with the car enterprise of Škoda Auto a. s. Mladá Boleslav. In Hradec Králové, there are smaller industrial zones blocked for investments from the field of strategic services, however, it did not succeed to utilize these localities in the corresponding way. In the Pardubice-Region four industrial zones with the total area of 160 ha came into being in connection with the implementation of “Support Programme for Industrial Zones Development“ (under the auspices of MPO); the largest ones are first of all in Pardubice, Moravská Třebová, Chrudim and Svitavy. In the whole region, there are quite a large number of industrial zones of a different size, of which the vast majority was defined in the territorial plan as area determined for building up for the commercial sphere. However, the vast majority has not the character of the industrial zone in the right sense of the word, due to missing infrastructure. The State administration does not invest the means for understandable reasons without a corresponding assurance of a real and serious interest of investors for the construction of commercial space. In view of high associated investments, only localities in bigger towns come into consideration, as smaller towns and municipalities do not dispose of the corresponding volume of financial means. The main drawback of potential utilization of industrial zones is the attitude of the State administration to these localities. There exists only general idea of State administration bodies how to utilize these areas, there is no survey of the structure of qualification of labour forces, who could be utilized for the particular production program or services. Another problem is the not-competent attitude of the State administration in the field of the co-operation with the potential investor, when the bodies of the State administration do not realize sufficiently the importance of new economic activities for the development of the region. The main task of all the regions is to know the potential of their territory, not only the free area, but also its real potential for the development of the region. For this purpose, it is necessary to elaborate the analyses of the economic potential of regions with the sufficient level of details, to be clear in which areas the district have the real potential, especially for production and services, associated with research and development activities. The goal should be the preparedness for formulating requirements on the potential investor, to prevent the situations, when the region and individual regions are grateful for any economic activity decreasing the unemployment. The consequence of such considerations may be the departure of investors with production and services with a low added value into the developing countries with a cheap labour force. The goal should be a considerable increase of dependence of companies and other subjects on the economic potential of the region. Not used Buildings and Premises In the region, there are hundreds of not used, difficulty usable or by ecological damages impacted production premises. Most of them do not accomplish their original purpose for the reason of termination of the main activity or bankruptcy of companies; some were abandoned by the Czech Army (military quarters and other military premises). The constructional and technical condition of these buildings corresponds to the way of former usage for the industrial production, business or agricultural production. The characteristic feature of these real estates is dilapidation and the difficult usability. The causes may be found in the unsuitable disposition for more extensive production or services associated with the preceding constructional and technical determination. The reconstruction of these premises assumes high costs and includes, besides the constructional changes also the new connection to the network infrastructure. The whole process of regeneration and revitalization is moreover complicated by the fact that the potential investors require, besides the ecological harmlessness of the territory, a good constructional condition of buildings and their equipment, in most cases e.g. internal space without partitions, good access roads and large adjoining parking lots.

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The old buildings do not meet such demands in most cases, their reconstruction is out of the question and the only solution is the building removal. Other negative characteristics of these real estates are proprietary disputes between the owners, pending bankruptcy proceedings, existing rights of a lien etc. These facts make the utilization difficult, the settlement of these disputes lasts long years and the investors prefer constructions on free plots for this reason. The treatment of quite often occurring ecological burden calls many times for investments exceeding the purchase price of these real estates finally. The choice of particular real estates determined for the regeneration and revitalization and the way of implementation should be done depending on what economic potential have the activities and subjects looking for the corresponding premises and not having enough financial means for the implementation of their intention. Just here the public subsidy in the form of co-participation assurance and supplementing financial means of the private investor for the implementation of the publicly beneficial intention would have its place. The decrease of the share of investor’s expenses in the project should be balanced by meeting the requirement of State administration on particular usage of the real estate. A chance to be implemented should be given the projects, including the public interest, or even better the combination of the public and private interest. In this connection it would be suitable to support the activities connected with establishing business incubators, centres of consulting, training centres, scientific-technical parks etc. The private initiative should be utilized for formulating the public interest and implementation of publicly beneficial projects. The task of the State administration is to facilitate the communication between the potential investors and all the concerned subjects with the goal to find the win-win solutions.

4.3.B.3 Human Resources The decisive factor for the competitiveness of the economy is educated and qualified labour force as the potential source of new ideas, new work procedures, technologies and innovations. MSP have not enough financial means for the professional development of employees in the direction of deepening knowledge and skills as source of higher productivity and effectiveness. For this reason, they arrange for their employees only the necessary short-term training for the smooth company running. The educational system on the other hand does not offer the educational and training programs focused on transfer of information about newest knowledge in branches. The whole system of education is characterized by the insufficient connection of the offer and corresponding structure of educational programs and courses, based on which it would be possible to acquire usable knowledge and skills (professional knowledge and skills, entrepreneurial thinking, management) as per the needs of the company sphere and work market. This field is closely connected especially with the education of the school graduates and life-long learning of working population. The system solution should be designed by the state; the task of the region consists in creation of physical conditions for the implementation of teaching, based on which the graduates gain the knowledge and skills required by employers. The direct effect of these measures will be easier acquisition of jobs by graduates at the work market and lower unemployment of young people. Public intervention could have the form of financial incentives, through which the lack of sources for equipment of classrooms and associated space could be compensated.

4.3.B.4 Research and Development The research and development is in the Northeast-Region a quite neglected field not achieving the average ofČRas for the amount of expended financial means. Among the basic criteria for evaluation of the level of the knowledge economy are doubtless first of all: amount of financial means expended on the science and research and the number of employees working in this field. The region is characterized by lower expenses on science and research in comparison withČRaverage. In the long- term horizon, Prague and Central Bohemia-Region with 60% capacities of university research and almost 60 % of public sources for research and development have the dominant position at the market. The expenses in individual regions within the Northeast-Region differ considerably. In 2005, the share of the Liberec-Region and its expenses on science and research represented 28% within the region, in the Hradec-Králové-Region 30% and in the Pardubice-Region 42%. Share of Northeast- Region´s expenses on science and research represents only 9,3% of CR´s expenses. The number of employees working in research and development depends on the amount of expenses in this field of human activities.

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Table No 7: Selected indicators of science and research in ČR as per the regions in 2005

Expenses to VaV VaV Employees Region´s Share in Share of Share in Share in Share of Region Share of total region in total number total private (in expenses number in total number expenses expenses thousands in GDP CR in CR CZ crowns) in ČR in ČR Prague 15835141,95 2,22 37,53 27,69 16 445 43,80 Central- 8560920,43 2,76 20,29 27,16 2 717 7,24 Bohemian R. South Bohemian 1610429,8 0,99 3,82 3,20 1 433 3,82 R. Plzeň-Region 1129592,61 0,74 2,68 2,98 998 2,66 Karlovy Vary- 76178,27 0,11 0,18 0,26 56 0,15 Region Ústí-Region 589384,17 0,30 1,40 1,94 393 1,05 Liberec-Region 1109607,99 1,12 2,63 3,47 814 2,17 Hradec-Králové 1169327,32 0,82 2,77 2,04 1 279 3,41 R. Pardubice- 1632153,93 1,35 3,87 5,28 1 334 3,55 Region Vysočina-Region 706841,83 0,57 1,68 2,52 388 1,03 South Moravia- 4653692,84 1,54 11,03 8,37 7 043 18,76 Reg. Olomouc-Reg. 1372165,04 0,95 3,25 3,54 1 539 4,10 Zlín-Reg. 1571071,86 1,14 3,72 5,38 810 2,16 Moravian-Sil. 2181915,3 0,73 5,17 6,16 2 294 6,11 Reg. Total number in 42198423,34 1,42 100,00 100,00 37542,33 100,00 CR

Source: ČSÚ – Indicators of science and research in 2005

Between 2002 to 2005 the science and research expenses grew in theČRby 42,7% and achieved 42 198 mil. CZK in 2005. The highest growth in the region was for this period was registered in the Hradec-Králové-Region, by 77%, in the Pardubice-Region the expenses grew by 60% and in the Liberec-Region by 45%.

4.3.B.5 Innovation The condition of maintaining a long-term competitiveness of companies is the permanent commercialization of new knowledge and results of research and development. The research and development potential of the region is not be utilized sufficiently at present. In all the three regions, there are scientific and research institutions having achieved success in co-operation with industrial enterprises, or during the commercialization of outputs of science and research; the connection with the commercial sphere is, however, still insufficient. The regions dispose of development potential in science and research, especially in branches representing the basic and traditional economic structure. The most important obstacle to introducing innovations in companies is generally the lack of qualified employees at the labour market. This factor plays an important part in most companies regardless to sphere of activity or company size. The second most important barrier is the lack of the own research capacities, then the insufficient capacity for the administration of programs for the support of innovations and missing financial means are at the fourth place. In the field of human resources the most important problems are unsatisfying structure of university graduates, particularly missing graduates of technical branches and natural sciences, low extent of cooperation of research workers, university pedagogues and students with the sector of research and business. In the companies, insufficient emphasis is put on education of research and development

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employees and managers in the field of intellectual property protection, business skills (modern methods of management and organization). A weakness during the development of the innovation potential inČRis also the disorganized and fragmented system of grants provided by ministries, preferring to invest subsidies into the basic research, low expenses of the private sector and non-flexible reaction on changing needs of company sphere and new directions of the research. Some Czech companies are distinguished by the low orientation on innovation, low ability to initiate and to absorb the results of research and development. The scientific and research institutions put a little emphasis on the commercial usability of results, there is a lack of information in the field of monitoring and systematic transfer of information of VTP-activities, incubators, activities and possibilities of universities and research institutes, especially of those being established and MSP in the regions; undeveloped is also the infrastructure for the transfer of technologies and knowledge on the regional level. The society puts a low emphasis on protection of the intellectual property.

In financing, there is a considerably low share of research and development expenses in GDP in comparison with EU average and no investments of pre-seed, seed a start-up-capital-type exist, which are key investments for the start up of spin-off activities and similar companies. Last but not least high costs of innovations and a high potential risk of insufficient successfulness discourage especially MSP; financial costs of patent procedure are high, especially while maintaining the awarded patent. The key goals of modern developing strategies in the field of innovation support should be the functional connection of the basic and applied research, assuring financial sources and development of the co-operation in research and development. The problem not only in the Northeast-Region, but also in the wholeČRremains lacking connection of individual central bodies while solving the problems of innovations and also the lack of relevant data. For the purpose of sharing the research and development expenses and practical application of their results is very effective to utilize the co-operation of companies and research organizations and universities. Thanks to such co-operation it will be possible to formulate better the requirements of companies in the field of increasing technological level of production, products and services. Through public interventions, it is possible to increase financial sources and to implement more risky and financially demanding projects which could not come into being without participation of the public sector. The task of the region should consist not only in the support of particular hopeful projects, which can help to regional actors, but also in formulation of the particular strategy in the field of innovative business. It should be based on contemporary strengths and traditions of the region and simultaneously is should utilize the opportunities following from the co-operation with other regions and their key actors.

4.4 Human Resources, Qualification and Education, Labour Market

4.4.A Inhabitants

4.4.A.1 Development of Inhabitants Number On the territory of the Hradec-Králové-Region the Liberec-Region and the Pardubice-Region lived in total of 1 488 168 inhabitants as on January 1, 2007, representing 14.5% of the total population of the Czech Republic. The most populated region is the Hradec-Králové-Region with 549 643 inhabitants (5.3% population ofČRand 36,9% population of NUTS II Northeast), the most sparsely inhabited region is the Liberec-Region with the number of inhabitants 430 774 (4.2%ČRpopulation and 28.9% of NUTS II Northeast population). In the long-term development of inhabitant’s number according to SLBD from 1961 to 2001 the number of inhabitants in Northeast Cohesion Region increased. In the last monitored decade, the same trends, as in the wholeČRi.e. population drop were registered. The population growth was registered only in the Liberec-Region, especially in the districts of: Českolipsko, Novoborsko and Frýdlantsko. The highest total increase of inhabitant’s number was registered in all the regions in 1970-1980 under the influence of the pro-natal policy of the state in this period.

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4.4.A.2 Basic Characterization of Inhabitants Structure In the structure of inhabitants as per sex the women predominate in all the districts of the region. From the viewpoint of the age structure of Northeast Cohesion Region the population share in categories 0- 14, 15-64 and 65 and more correspond to the republic’s average, there is a gradual ageing of the population. The highest representation of the productive component of inhabitants is in the Liberec- Region: 71.3% (NUTS II NE 70.3%). The oldest age category is at most present in the Hradec- Králové-Region 14.7% (NUTS II NE 14.0%), having a less favourable age structure of inhabitants.

Picture No 5: Average age and share of inhabitants to 15 years as per administrative districts of ORP NE Cohesion Region in 2004

Source of data: ČSÚ2005 Legend: Border of NUTS 2 Border of regions Number of inhabitants up to 15 years (in %) Up to 14.5 17.5 and more In the Northeast-Region, the average age was 40.1 years as of 1.1. 2007, which is by 0.1 years less than the nation-wide average. The oldest population lives in the Hradec-Králové-Region (40.6 years), in the Pardubice-Region (40.0) and the youngest population lives in the Liberec-Region (39.7 years). The average age of women in NUTSII Northeast region is in average by 3 years higher than in men (38.5). The average age reflecting the age structure differs more considerably depending on the individual regions of municipalities with extended powers. At least favourable is the situation in following regions: Královéhradecko, Pardubicko, Přeloučsko, Královédvorsko, Hořicko, Jičínsko, Kostelecko, Náchodsko and Novopacko, where the average age of inhabitants is equal or higher than 40 years. The total balance of inhabitants in years 2000 – 2006 is negative in Northeast Cohesion Region. The natural population growth is negative, while the increase through migration reaches positive values. The highest natural loss of inhabitants was registered in the territories of the Central-Western to North-Western part of the Region (ORP Turnov, ORP Železný Brod, ORP Hořice, ORP Přelouč etc.) and moreover in the surroundings of region centres. The most prospering regions show also the natural drop of inhabitants. Only some random regions with sparse population registered a natural growth (especially ORP Česká Lípa and ORP Lanškroun). In the last time, the situation improves thanks to higher natality. In 2006, the natural increase was registered in last 12 years. This trend, however, corresponds with the nation-wide standard as the strong age-groups of population from the mid of seventies come into the reproduction age. The total drop of inhabitants in Hradec-Králové-, Liberec- and the Pardubice-Region are in the long- term horizon compensated by the growth of inhabitant’s migration with regular deflections between positive and negative values. Several random regions (ORP Broumov, ORP Králíky, and ORP Polička) have a considerable negative migration result, and on the contrary, a considerable growth of

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the population by migration was registered in some regions near big towns with quite good transport availability (ORP Turnov, ORP Holice, ORP Kostelec nad Orlicí).

Table No 8: Basic information about the population age structure Indicator (unit, year) NUTS II Czech European Northeast Republic Union (EU-27) Population growth (average yearly change in % -0.1 -0.1 0.3 1995-2004) Population share ‹ 15 (%, 2004) 15.7 15.2 16.3 Population share 15 - 64 (%, 2004) 70.3 70.8 67.3 Population share 65 + (%, 2004) 14.0 13.9 16.4 Source: 3rd Report on Economic and Social Cohesion

4.4.A.3 Educational Structure of Inhabitants The education is one of the important factors in region development, as it influences not only the personal growth of individuals, but also the economy development. The education is of importance also for the economic growth, competitiveness and decrease of unemployment. The total level of education in the Northeast Cohesion Region grows. While comparing the highest achieved education in individual regions, considerable regional differences may be seen. In relation to the economic evaluation of the territory it is visible that the economically weaker regions have a lower level of education and on the contrary.

Table No 9: Basic information about the population educational structure Indicator (unit, year) NUTS II Czech European Northeast Republic Union (EU-27) Percentage of residents between 25 and 64 9.7 10.1 29.1 (%; 2005) with basic education Percentage of residents between 25 and 64 79.6 76.9 48.6 with high school education (%; 2005) Percentage of residents between 25 and 64 10.7 13.1 22.4 with university education (%; 2005) Percentage of residents between 25 and 64 9.7 10.1 29.1 with basic education (%; 2005) Source: 4th Report on Economic and Social Cohesion

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Picture No 6: Share of inhabitants according to the highest completed education (Elementary School, University) as per the administrative districts ORP of NE Cohesion Region in 2001

Source of data: SLDB 2001 Legend: Border of NUTS 2 Border of NUTS 2 Border of regions Border of regions Number of inhabitants with elementary educ. Number of inhabitants university graduates

The high level of education in the scope of NUTS II Northeast is typical of regions with a high economic potential, especially in the hradecko-pardubicko and liberecko-jablonecko agglomerations. Significantly under average is the education in the Northeast-Region and also in comparison withČRin peripheral districts of Broumovsko, Frýdlantsko and Králicko. The low level of education is visible also in the typically agricultural, less economically developed and mountainous regions. In respect to the accelerated speed of technological changes and general progress in science and research, also the structure of demands on skills and abilities changes. At present, the emphasis on the skill competencies or key skills comes to the forefront, i.e. the skills, which are general and are necessary for the study of all the directions of professional education, the start of the job as well as the normal civil life. These are skills conditioning the possibility of further self-education as well as the work and life success. In this connection, it is difficult to present a pregnant analysis of skills and abilities of inhabitants. The estimate is based only a sample of available data. Based on the available data of equipment of households with computer and access to internet we may conclude the data of computer and information literacy of inhabitants. Comparing the number of households equipped by the computer in cohesion region in 2003 and in the middle of 2006, there was a significant growth of the number of households. In the cohesion region, there was a growth from the share of 23.3% in 2003 to 35,3% in 2006, which is slightly less thanČRaverage (35.7%). As for the share of households with access to internet in 2004, the numbers are for NUTS II (26,2) comparable with theČR(26,7%), however, as for IT equipped households the region still falling behind Prague. The worst result shows the Liberec-Region, where only 32,4% of households owns PC and only 23,9% has internet access. The most households equipped with PC is in the Pardubice-Reion (38,7%), there´s the most households with internet connection (27,8%) in the Hradec-Králové-Region . We may conclude from these data maximally a not entirely satisfactory computer and information literacy of inhabitants in the cohesion region, which is a principle drawback for the contemporary and long-term trend of demands on skills and abilities of inhabitants. There are circa one fifth less households with PC and internet access in locations demarcating lower habitation density than households in locations demarcating lower habitation density. The problem of insufficient computer literacy concerns older age categories. Generally modern technologies are the domain of the young generation up to 35 years, considering them a part of life.7

7 Research of information literacy, STEM/MARK, a.s., Ministry of Informatics, 2005. This is a representative survey of the population aged 18-60 years on the sample of 16344 persons.

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4.4.B Education

4.4.B.1 Elementary School System The elementary school system of the Northeast Cohesion Region struggles with similar problems, which can be registered in the whole CR. Within the educational process, it is especially the lower quality of foreign languages teaching (in connection to missing certification system) and of information literacy (personnel assurance and also technical assurance of teaching). The whole space of NUTS II Northeast territory struggles with these problems with minor exceptions. The general problem of elementary schools is also ageing and high feminization of schools and the apparent problem locally is also the insufficient qualification. A considerable existence problem is the drop of pupils because of unfavourable demographic development. For this reason, it is necessary to treat effectively the territorial optimization of elementary schools. Also the low extent of school usage for the free-time activities remains a problem. The demographic curve of pupils decreases, but paradoxically there is no proportional decrease in the number of pedagogues. In co-operation of regions with municipalities as founders, no optimization of the network of elementary schools began, i.e. the decrease of their number to the optimum level. The solution would be the re-organization of insufficiently utilized schools or establishment of one common school for the whole complex of municipalities without awarding exceptions from the minimum number of school pupils, which is the practice enabled by the School Act.

The material and technical conditions of elementary schools differ in individual regions. For the reason, that there is no summarizing analytical material evaluating this state on the NUTS II Northeast territory, we may consider for relevant documents only annual reports of individual schools or documents of the Czech School Inspection8. However, the material and technical conditions of schools on the NUTS II Northeast territory cannot be considered sufficient globally, which concerns not only the high extent of wear and tear of textbooks fund and out-dated equipment with teaching aid, but also the state and the different level of equipment of buildings of schools and school facilities. The concern is especially the insufficient ICT standard, insufficient required speed of internet connection at schools, insufficient equipment with the presentation technology. The problem of the too high number of pupils per one computer with internet access is associated with it (19 pupils per one computer connected to internet on average). Unsatisfactory is the equipment of schools by ICT means and their usage in lessons. Some schools are located in buildings in bad technical condition calling for a total reconstruction of the building as well as internal spaces, reconstruction of social equipment and dining rooms. There are, however, as stated above, certain local and regional differences, which cannot be right away applied on the whole territory of the NUTS II Northeast-Region. It is necessary to highlight the positive change being performed in the last years, i.e. the improved possibility of education of the school management, concerning the directors of elementary and high schools. This fact becomes visible in the quality of management of these institutions. The positive trend in the scope of the mild drop of pedagogues is the improved age structure and the structure of qualification, as the teachers in pension age and the unqualified ones leave.

4.4.B.2 Secondary Schools In the field of secondary schools, the essential extension of the offer of education took place in the 90s in all the three regions as well as in the whole Czech Republic. In this way the excess of the offer in comparison with the demand (state as well as private schools) came into being, which was, among others the consequence of the decreasing number of the population of this age. At present, the trend appeared, to accommodate the offer of schools to the real demand. For this reason, the priority is to perform optimizing of the network of secondary schools depending on the number of pupils coming from elementary schools and capacity of secondary schools. It is necessary to continue also the branch optimizing, i.e. to decrease the number of schools teaching the same subjects and also to react on the needs of labour market. While optimizing the capacity and the branch split, it is necessary to “respect“ the geographic balance on the territory of individual regions within NUTS II Northeast- Region. The secondary and tertiary education on the territory of the NUTS II Northeast-Region is manifold as for the number of branches, which is a competitive advantage. For every region, moreover a certain type of branches and subjects is characteristic, which are specific just for this certain region and

8 Czech School Inspection – Data of state of schools in the CR-Regions.

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distinguish it from other NUTS II regions. The specialties of the Hradec-Králové-Region are: Secondary Industrial School for Stonemasons and Sculptors and Training Centre for Stonemasons in Hořice, Secondary Veterinary School, and Training Centre for Production of Music Instruments and Furniture, Higher Professional Biblical School. The Pardubice-Region is distinguished first of all by the food industry branches (Secondary School for Food Industry) and chemical branches (Secondary Industrial Chemical School); the Liberec-Region is characterized by the high concentration of secondary Arts and Crafts Schools and Higher Professional Schools with arts focus (glass making, jewellery making, art design) in Jablonec nad Nisou, Železný Brod, Turnov, Nový Bor and Kamenický Šenov. This concentration of the secondary arts schools is unique not only in European, but also in the world scale. The material and technical conditions of teaching in secondary schools are different in the regions of the NUTS II territory. A positive feature is the effort of schools to modernize the computer equipment, the modernization, however, is insufficient. The renewal of usual means, technical equipment as well as equipment with technological special appliances for some special subjects is limited in the last years, the fund of teaching aids becomes outdated or is missing completely in some schools and also modern technological means for teaching special subjects are missing. Problematic is also the not refurbished state of some buildings and internal space. Some schools are not connected to gas pipeline, the dining rooms and welfare facility of a number of schools do not comply with hygienic conditions. For a number of schools it is necessary to perform the reconstruction of the buildings, reconstruction of welfare facility, dining rooms and the total renewal associated with the reconstruction (equipment with a suitable furniture etc.) The secondary and higher professional schools in the Northeast Cohesion Region offer and implement a number of educational activities focused on further education of adults starting from different types of re-qualification courses, training and seminars, up to distance, evening and external forms of studies. It is, however, characteristic for the contemporary situation that the possibilities of schools in the region are limited due to not good penetrability of educational system and last but not least also insufficient financial means. The fact on the other hand is that in Northeast Cohesion Region the secondary and higher professional schools represent an important not utilized potential in the material as well as personnel field, e.g. just for the life-long learning.

4.4.B.3 Universities The university education on the territory of NUTS II Northeast-Region is represented by the University of Pardubice, University of Hradec Králové, 2nd faculty of Charles University in Hradec Králové and 1st faculty of University of Defence in Hradec Králové and Technical University in Liberec. The universities on the territory of Northeast Cohesion Region struggle with problems. The main goal of the development of regional universities is to create an educational system able to react flexibly on the needs of regions and employers with simultaneous application of newest knowledge of research and development. This goal calls for increased permeability of especially tertiary education, between individual degrees of university education as well as between shorter cycles and other parts of the tertiary education (especially the higher professional education) enabling the access to study at any age and on any level. The permeability may be achieved especially through the modular construction of study programs of all three degrees, enabling to continue the completed modules at any time, and also through establishing of a system of acknowledging the education acquired outside the relative university. The extension of the offer of educational programs for increasing the qualification also for the needs of changing society, especially depending on demographic changes concern the bachelor’s (in connection with it also master) study programs, as well as short programs and courses of further education, which will react on the needs of practice or region. The condition for extending study occasions is a generally and necessary condition for facilitating the possibility of education for the adult and employed population is the further development of the combined and distance forms of study, creation and introduction of modern learning support (multimedia educational aid), e-learning, interactive learning programs and materials for these forms of study, creation of common teaching laboratories, introduction of project and problem way of study and development of consulting- information centres. The basic pre-condition of the success of this type of study programs or additional education courses is, however, the establishment of partnership of various institutions in the national as well as international scale for the purpose of increase of employment possibilities of university graduates. The aim should be a more active and more coordinated co-operation of the scientific and research potential of universities with industrial enterprises and companies being interested first of all in innovations and progressive technologies.

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Among other problems, which are, to a certain extent, common to all universities of the Northeast Cohesion Region is the conceptual and system solution for a more effective assurance of material and technical background and looking for other possibilities of extending capacities, not only for teaching, but also for the research. In the scope of this issue, it is necessary to develop especially the infrastructure on the base of information and communication technologies with the emphasis on the safety of network and data and also on the gradual increase of availability of information sources.

4.4.B.4 Life-long Learning The life-long learning, the part of which is also further education, is provided by different kinds of subjects on the NUTS II Northeast territory. These are private educational companies, secondary, higher schools and universities, educational institutes, consulting agencies, citizen’s associations, non-profit organization, Chambers of Commerce and Trade Unions. The problem of absence of a comprehensive conception and related coordinated system, guaranteeing the quality of further education, is being solved for a longer time. The offer of educational courses is wide, but not balanced. The positive fact is approval of the Act of Legalizing and Acknowledging Results of Further Education and of Amending Some Acts of 30th March 2006. The whole Act came into effect on 1.8. 2007. The system of education certification is not developed and caught on. One of the possible ways of implementation of life-long learning is utilizing the current capacity and offer of universities, offering in all the three regions of NUTS II Northeast wide opportunities of further professional education in different types of branches. The principle of life-long learning at university is implemented also in the form of offer of preparation courses for applicants for study and also within further education of pedagogic employees. One of the main problems of the life-long learning is incoherent arrangement of the system of life-long learning having moreover a casual character. In the region, the first steps were made to create the database of providers of life-long learning; however, no system of the precise mapping of this offer exists. Another problem is persisting low interest of inhabitants for further education; consisting among others in the traditional conservative opinion of inhabitants on the employment issue, re-qualification and the life-long learning generally (positive attitude of inhabitants to the need of further education grows with the level of education). From the low participation of citizens in further education follows also a slower development of the offer of educational activities, low motivation of employees as well as employers to further education and connected low contribution of further education to the total level of education of the population on the labour market. Besides the increase of interest of inhabitants for further education it is necessary to assure in the first place appropriate utilizing the current capacity of subjects providing life-long learning through the more targeted advertising. This promotion will be the decisive factor influencing further development of the Northeast Cohesion Region in the field of the life-long learning. It is suitable to mention that certain efforts associated with the promotion appear already in the region. These are different forms of medial campaigns, moreover e.g. the actions like “week of education of adults” etc. The motivation of inhabitants for further education should be the main task of the regional government. The regional centres for further education, in which mainly the capacity of schools should be utilized, has already been built e.g. in the Liberec- and Hradec-Králové-Region. This is Educational Centre of the Liberec-Region and Institute of Further Education, which can be considered a unique within NUTS II Northeast in this direction. During the total evaluation of situation in the field of further education in the Northeast Cohesion Region, it may be stated that the regions have not sufficient information about the potential of the offer of further education on their territory, they have no methodical instruments, how to follow and evaluate these analytic data; the regular statistic evaluation and monitoring of further education is missing. On the other hand, it is necessary to mention the activities of the national level, starting to influence the development in the field of further education in NUTS II regions. One of the positive steps, performed in the development of human resources are the provisions of regional councils for OP LZZ, possibility to use the inspiring Top region databank for the strategic OP LZZ management, internet DAT database and integrated system of type positions and also various certifying activities.

4.4.B.5 Career Consulting At present, the scope, quality, relevance and availability of these services determined for parents, pupils as well as school graduates and all applicants for studies incl. further education on the NUTS II Northeast territory is not on the appropriate level. First of all it is necessary to assure career consulting, provided by educational consultant at present, directly at schools. It would be suitable to extend the provided consulting and information services also by diagnostic services providing

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information of specific pre-conditions of the pupil for studies of the chosen branch or execution of a profession. The system of career consulting should be also closely connected with the information system. The goal is to assure the relations, good arrangement and comprehensiveness of provided services, their availability and easiness of utilization.

4.4.B.6 Co-operation of Schools with Employers in Region The co-operation of secondary schools of the cohesion region has took place up to now mostly arbitrarily, without any system and on various qualitative levels. It is possible to say that there are great reserves in this field. It is necessary to accentuate that the active co-operation of schools with the state as well as private companies and the increasing number of professional presentation of companies directly in schools influence positively the professional level of pupils as well as teachers. Some schools start to build- up gradually the auto-evaluating system, they compare the established results with the requirements of continuing schools, potential employers and professional associations, with results of other schools of the same type etc. In spite of these isolated activities, the mapping of this issue is missing and the consequence is the lack of relevant information for the relative deciding procedures on the level of all districts of the Northeast Cohesion Region. This may be considered one of the important problems of this thematic field.

4.4.B.7 Summary The education in the NUTS II Northeast-Region may be shortly summarized in the following items: the developed network of educational institutions covering a relatively wide spectrum of activities, establishment of new branches of education dealing with new technologies, management and informatics in the last years, the growth of the level of education of inhabitants, especially in the field of universities as well as secondary schools, a different level of education in individual ORP of the region, a quite high share of persons with elementary education, including persons without education in some regions of the Northeast Cohesion Region, branch variety of the secondary and tertiary education, specific types of branches in some districts, necessity to optimize the network of secondary schools as for optimizing of branches and capacity, missing coordinated system for the life-long- learning in regions, the system of certification of education is not developed and caught-on; a lower grade of the mutual connection of schools and companies in further education of employees.

4.4.C Labour Market

4.4.C.1 Employment In the Northeast Cohesion Region there were considerable changes and shifts in the field of employment in individual economy fields in the last years. The drop of employment was registered in primary sector, where the employment decreases permanently from the beginning of the 90s of the last century in connection with the economic slump of the agriculture. In the next years, the strong deficit of labour forces in this sector will manifest itself with a high probability, which is confirmed at present by the high average age of employees achieving values above average in comparison with other branches of economy. In other branches of the region, there were no such significant structural changes; the drop of employment was very closely connected first of all with the increase of the pressure of company owners on the work productivity and effectiveness of economy. Among the branches with the growth of employment, there were: boarding and lodging, health and social care, building industry. The growth of employment was connected in these branches with the growing demand for these services. The drop of employment rate from the middle of the 90s stopped in the last years thanks to the economic growth, inflow of direct foreign investments and implementation of programs of active employment policy. In the next years, however, the employment can grow again in connection with the increased pressure of companies on the growth of productivity of work and decrease of employment in the state as well as public sphere.

4.4.C.2 Unemployment The rate of registered unemployment moved based on the methodology of ČSÚ on the level 4,2-5,4% (as per regions) in 2004 and it is lower than the average of EU-27 countries and of the Czech Republic. In the last period, approx. one half of the unemployed finds the work within 3-6 months, 62-69 % of the unemployed within 12 months. Continuously grows also the share of long-term unemployed being in the register of the Bureau of Unemployment for more than 12 months. At the end

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of 2005 their share constituted almost half the total number of unemployed. The cause of this state is the decreasing number of free job opportunities for the groups finding difficultly the jobs, i.e. school graduates, young people having finished elementary schools, unemployed above 50 years of age, persons with handicaps and socially risky groups. In the group of physically handicapped persons, the unemployment grew between years 2002-2004 by one fifth. As for age structure, the applicants aged 20-24 and 50-54 years have the greatest problems with the job finding, these groups represent one third of unemployed. The young people are missing practice, and the missing interest for elderly people is caused by their potentially higher illness rate. As for the reached education, the applicants with elementary education and trained persons (with the certificate of apprenticeship only) representing in total more than 3/4 of all the registered applicants for job have greatest problems with job assurance. This unfavourable state is connected generally with demands of employers on qualified professions, with demands on possible re-qualification of employees and with a bad adaptability of these groups of persons to changing conditions at the job market.

The unemployment of individual age groups is very closely connected with the drop of economic activity of inhabitants. The number of economically active persons (employed and unemployed in total) continues to decrease in the last years, it dropped by 3.4%9 between 2001 and 2004. The rate of economic activity higher than 90% is reached in age groups 35-49 years; as for younger age groups, the rate of economic activity is lower because of the studies, the maternal duties are the cause of the lower economic activity of women (the economic activity of women is highest between 40-49 years, when it exceeds 90 %). The turning point is for both sexes is the age of 55-59 years, when the economic activity drops from 90% (50-54 years) to average of 60%. This trend will have in a very close future serious negative impacts in the form of pressure on assuring the sustainability of public finances in the field of assuring the sufficient amount of means for social expenses (invalidity, old-age pension). The economic activity decreases in the last years too quickly in the groups, which should remain active in the continuously extended time before retirement. The time gap between the drop of economic activity and retirement represents 8-10 years at present. The most of elderly persons retire prematurely after a longer time of registration in the Bureaus of Employment. Another variant solving the same problem is drawing the disability pension. It may be stated generally that the higher unemployment rate is typical of the regions with a long-term lower rate of economic activity, more distant from larger centres, with a lower population density, or border territories. A more difficult transport availability and especially insufficient or non-existing public traffic on the territory have a considerable impact on the unemployment as well as on the life of inhabitants.

4.4.C.3 Job opportunities Regarding the structure of vacancies, registered by Bureaus of Employment, the vacancies for worker professions prevail; the vacancies for qualified craftsmen represent one half of all the vacancies and the vacancies for not qualified and auxiliary labour forces follow. Almost 1/5 of job is determined for the administrative, technical, medical and pedagogic employees. There is a dense network of Bureaus of Employment offering free jobs in the region. However, the Bureaus of Employment are not the only subjects offering free jobs; they register only 1/3 of vacancies; the rest is covered by private agencies or the jobs are advertised by the employers. One of the important pre-conditions of developed job market is the migration of inhabitants because of jobs. For the wholeČRthe migration in the region is more typical than the migration between regions, which is connected with the costs of commuting in comparison with costs of moving and housing arrangement. The main region of migration is the demand for a better job and unemployment. As of the day of census in 2001 38.6% employed persons in the Hradec-Králové-Region, 42.2% in the Pardubice-Region and 34.7% in the Liberec-Region commuted to work. Commuting and moving for work becomes one of the main possibilities how to solve the unemployment. The Region should concentrate in future in much higher extent on assuring the transport availability in the whole region, especially in the less populated and border regions. The main cause of the low utilization of job opportunities by the applicants is the discordance between their qualification and experience on one hand and demands of employers on particular professional skills and experience of job applicants on the other hand. The instruments of the active employment policy (APZ) play an important part in this respect; however, these are long-term solutions calling for

9 All the data of economic activity , employment and unemployment come from ČSÚ

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the active co-operation of employers. The companies often prefer the applicants with a finished qualification.

4.4.C.4 Unemployed Graduates by Branches on the NUTS II Territory The school graduates represent a risky group of labour forces, as it is very difficult at present to find a job within one or two years after completing studies without experience. The missing success while looking for the job at the beginning of the job career can result in the loss of motivation and in another serious problem – tendency to socially pathological phenomena. Today, this group is devoted the necessary attention within the existing consulting system and system utilization of instruments of the active policy of employment. In future, it will be necessary to concentrate oneself in a higher extent on the preventive measures focused on persons of educational consultants at the elementary school and higher quality of their services. It is also necessary to involve the employers into the co-operation with the elementary and secondary schools. The motivation of pupils for studies of branches required by labour market, however, must be supported first of all by employers, especially in the time when pupils decide, i.e. in the last two classes of elementary schools. The issue of employment of school graduates may be documented on examples of their asserting themselves in the first job. In April 2005, in the Pardubice-Region, the highest unemployment rate was registered among school leavers of the branch Technical Chemistry and Chemistry of silicates (50%), in the Liberec-Region it was the branch Leather and Shoes Manufacturing and Processing of Plastics (33.3%). In case of trained school-leavers with GCE, the highest rate of unemployment was in the Pardubice-Region first of all in the branch Processing Wood and Production of Music Instruments (61.5%) and in the Liberec-Region in the branch Economics and Administration (100%). These data document clearly the need of a much higher co-ordination of the offer of the educational system with the demand of the labour market, esp. possibilities of individual employers. In the field of employment of school-leavers, certain disproportions, which cannot be prevented, occur always; however, in some branches the unemployment rate exceeds 30%, which is the proof of the insufficient interest of the educational system in the future assertion of school-leavers. The school-leavers must accept less qualified positions for a lower wage, which leads to lower satisfaction in the work as well as in the life.

4.4.C.5 Active Employment Policy (AEP) The active employment policy started to develop in the 90s of the last century as reaction on the problem of the growing unemployment. It represents a quite large amount of manifold instruments of activity of Bureaus of Employment implementing AEP in a particular region. Every Bureau of Employment struggles with another unemployment rate and with other problems on its regional work market and it applies also quite different ways of solution. The general problems concerning the risky groups and applicants who may be located only with great difficulties are practically identical everywhere. The school-leavers, citizens with handicaps, applicants with low education or unsuitable qualification in relation to current demands at the labour market are among them. It is also possible to involve into this group the applicants in the pre-pension age and women with young children too. An independent group is socially non-adaptable persons, not looking for the work and counting upon the social system. The re-qualification of applicants for job is one of the most important measures of the active employment policy. The support is provided in the form of the contribution of Bureaus of Employment to applicants for the payment of re-qualification costs; the employers are paid partially or completely the costs of prequalification of employees. The success of re-qualification courses depends on the branch structure and structure of unemployed (degree of education, acquired qualification, experience etc.). The applicants within half a year after the loss of job are involved into the re-qualification courses most frequently. From the viewpoint of the structure of courses, there are professionally focused courses providing new qualification for a particular profession and general courses the goal of which is acquiring knowledge and skills to the total activation of unemployed. The vast majority of courses include the professional practice as well as practical teaching. The focus of re-qualification courses in individual regions is very similar; computer courses, accounting courses, administrative work, courses for drivers, welders, different services (hairdresser etc.), fundamentals of business. Short-term programs (mostly monthly, seldom two-month-programs) are not very effective, because of their low level of acquired knowledge and skills. The problem of a higher number of long-term courses is their term of several months, higher financial demands and non-existing guarantees of the following finding a job. The obstacle of the higher number of long-term courses are limited financial means of providers - Bureaus of Employment and their low degree of co-operation with particular employers in the field of specification of their requirements on the structure of the offer of qualification courses, required by them. The most participants of the re-qualification courses appreciate acquiring new skills and

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contacts for the further employment, only minimum number takes part to decrease the risk of the loss of the social allowance. A considerable effect have the courses on improvement of the psychical conditions and improvement of the own evaluation. For one quarter of the applicants, the participation in the re-qualification programs is connected with a further deterioration of financial situation (commuting etc). The unemployment benefit is paid only half a year, then the applicant is, based on his social situation left to other kinds of the state support, however, covering only a part of life costs. An important aspect while selecting a certain course remains first of all the following possibility of assertion of the applicant at the work market (limited or unsuitable offer of these courses and their short duration); moreover, it is a low financial motivation for those who are interested in re- qualification. In the next years, the scope as well as the structure of re-qualification courses should be accommodated more and more to individual needs of employers and job applicants. The re- qualification education contributes generally to increased flexibility of labour force, being more than ever forced to adapt oneself to topical changes of the labour market. Another important AEP instrument is investment incentives for employers, for whom the decision on the promise of the investment incentive based on a special legal regulation was issued. The support concentrates on the creation of new vacancies and on the re-qualification or training of new employees. The condition of gaining the support is the registered office of the company on the territory of districts with the higher rate of unemployment than the national average. The usability of this support is, however, considerably limited territorially and also by the amount of the determined financial means. This instrument may be considered very effective, as it is connected with new investments of a long-term character. Its efficiency, however, is considerably limited by the determined sources. There are also other AEP instruments, however, without such an important impact on decreasing the unemployment as re-qualification courses and investment incentives.

4.4.C.6 Equal Opportunities of Women and Men at Labour Market The field of the employment and possibilities of women’s assertion in jobs is evaluated by the society in several levels. The society sees as problem the existing lower representation of women in the better financially evaluated positions and in the more difficult achieving managing positions in the entrepreneurial as well as public sphere. Women are really represented to a higher extent in the lower managing positions; from this fact the conclusion that the women are denied of the possibility of further professional development and perspective career cannot be concluded. The cause of this state is the problematic connection of the professional and family life. The care for family is in the first place the task of women; the women are connected much more with care for family than men by the society. In the most cases, no family care or is expected from men. This is, however, the problem of a family and education, not of the labour market and employers. The solution consists – besides the education focused on the equality of roles and chances in the life – in the general attitude of the society members to women and men and to their roles in the family and society. Very problematic in the employment of women is employment of mothers with young children; the fact that the employers do not offer women the part-time jobs to a higher extent is seen as a problem. The reasons of this attitude of employers may be the effort to assure smooth functioning of a company. On the other hand, the employers meet with the objective missing interest of women-applicants in part- time jobs for the reason of drawing a low wage, often on the limit of life minimum. The educational system in theČRas well as in the region cannot be considered discriminating, the educational offer is determined for all those meeting the criteria of trouble-free management of studies. The representation of both sexes is similar like in the whole population, with certain exceptions of some study branches typical of one group of inhabitants based on history or custom. The theme of equal opportunities is often perceived only on the level of professional and social assertion of men and women. The problem of equal opportunities is, however, much larger and it cannot be restricted to the equality of sexes. There are many more serious forms of discrimination at the labour market consisting in the preferences of personal contacts to real abilities of job applicants, misuse of managing position to the pressure on subordinates etc.

4.4.D Health Service and Social Care

4.4.D.1 Health Service – Analysis of the Structure of Network of Medical Facilities and Level of Health Care The state of health care and medical care in the Northeast Cohesion Region may be evaluated as good from the quantitative and qualitative point of view. The availability of individual kinds of medical

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services, i.e. capacity of beds as well as ambulant services is satisfactory. Problematic is only the availability of hospitals and specialized facilities from some peripheral districts (esp. borderland). The most important medical facility in the region is the Faculty Hospital in Hradec Králové, being in many branches the best one in the Czech Republic (e.g. in cardio-surgery, neurological surgery, ophthalmology, metabolism and nutrition support, oncology and haematological oncology.) Of over regional importance are in some branches also regional hospitals in Liberec (e.g. in the specializations neurological surgery, traumatology and invasive cardiology) and in Pardubice. In the Hradec-Králové-Region, there are at present in total 12 hospitals, in the Pardubice-Region 5 hospitals with acute care and further 4-beds medical facilities providing nursing care; in the Liberec- Region, there are 9 hospitals. Concerning number of beds per 10000 inhabitants only the Hradec- Králové-Region exceeds the average value in the Czech Republic, other regions fall behind the average in the number of beds (first of all as consequence of the excessive concentration of beds in Prague). The level (constructional and technical state) of medical infrastructure in the region is strongly different. Besides the new or modernized buildings, the beds stand many times in unsuitable spaces, calling for reconstruction and modernization. Also the level of equipment with appliances is different; the necessary renewal and modernization should reflect the extent of utilization (size of the attraction zone of the hospital). In future, it is necessary to concentrate on the increase of effectiveness of health services through investments into the information technologies, education, innovation of technical background and appliances and modernization of medical facilities. A part of the network of medical facilities with beds is also specialized institutes with the nation-wide activity and coverage (e.g. the Institute of Arm Surgery and Plastic Surgery in Vysoké nad Jizerou or the Professional Medical Institute of Jevíčko, focusing on healing of tuberculosis and respiratory diseases). The pre-hospital urgent care is assured by the Medical Rescue Service of individual regions with detached workplaces so that the availability within 15 minutes is guaranteed. Some regions, especially mountainous regions, however, are not covered by this isochrones and after the anticipated reduction of the network of hospitals, the situation will continue to deteriorate. Serious cases, calling for the instantaneous and quick action in terrain, the Air Rescue Service with stations in Hradec Králové and Liberec helps to treat. As for the number of physicians, a mild increase was registered at present in all the three regions. The best situation is in the Hradec-Králové-Region, where 3.93 physicians are per 1000 inhabitants, which is probably caused by the higher concentration of the specialized medical care in the Faculty Hospital in Hradec Králové and by the presence of one Medical Faculty of UK Prague; the Pardubice and the Liberec-Regions fall behind the national average. The ambulant sphere is quite well represented in towns, whilst in the rural regions problems with taking over the medical practice as a consequence of the relatively high average age of practical physicians may be expected soon. Even more complicated situation is brewing in stomatological branches. In the Northeast-Region, there are several municipalities with the spa statute, where first of all the diseases of locomotive organs, nervous and skin diseases and respiratory diseases are treated (Jánské Lázně, Spa of Velichovky, Spa of Bělohrad, Spa of Běloves, Spa of Bohdaneč, Spa of Libverda and Spa of Kundratice). These are smaller spa sanatoriums, popular for their individual treatment of clients. Their further existence and the development may be endangered by the possible change of policy of medical care payment by health insurance funds (higher co-insurance of patients).

4.4.D.2 Social Care – Analysis of the Level of Social Services On the territory of NUTS II the residential, assistance and intervention services of the social care are provided. Evaluating the quality and sufficient coverage, differences in quality and not proportional coverage within regions, typical of these services, shall be mentioned. Residential services (institutes of social care, old peoples’ homes, children’s homes etc.) are currently sufficiently present on the territory of the Pardubice and the Hradec-Králové-Region (in the Hradec-Králové and the Pardubice- Regions, only some special residential services are missing, e.g. for psychotics and alcoholics). On the territory of the Liberec-Region the residential services are spread very non-proportionally. The lack of bed capacities, mainly places in seniors’ homes exist especially in the Liberec-Region, on the contrary in Semilsko the capacity of these facilities is above average. The structure and capacity of selected facilities of social care is represented in the table. It applies generally, that in relation to the process of population ageing, the necessity of further residential facilities on the territory of all the three regions appears in future. However, it is necessary to support first of all the alleviating care and support of persons taking care of their family members generally (home care). Very important is from the long-term point of view the co-operation of the facilities of social care with facilities providing medical care; the problem is their insufficient co-

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operation and mutual co-ordination of social and health services and facilities. The clients of seniors’ homes become often the people whose health condition calls for all-day health care. A certain solution of this state consists in the optimization of beds; i.e. the transformation of excessive beds in hospitals to beds for the following care, beds for seniors and all-day-care. Terrain social services and intervention services, however, have considerable reserves in coverage of individual regions. In many municipalities, the assistance services for citizens are not available at all. As for intervention services in the Hradec-Králové-Region, mainly the services for children and young people are insufficiently developed, as e.g. the support of free-time activities, e.g. in the form of the low-threshold centres; moreover, the services of the type “crisis bed” or asylum living are necessary. In many cases, not only sufficient support of the local government is missing, but first of all the financial means for their operation. In the Pardubice and the Liberec-Region, the intervention services are insufficiently covered in the localities affected by the social exclusion. In both these regions, the separated Roma communities grow. It is necessary that terrain social workers work here, contributing considerably to alleviating the social exclusion and helping with involving gypsies into the society, removing handicaps in education, living and unemployment. Providing this service in the regions is insufficient for the time being and the municipalities do not reflect the necessity to assure this social service sufficiently at present. A positive feature is the existence of a number of social branches in the secondary schools and universities of NUTS II Northeast-territory, which are good pre-conditions for the preparation of the qualified staff. At present, also the greater development of the non-profit sector in the field of social services is registered, which is pre-condition of the social care of a higher quality and effectiveness. In the last time, the trend was registered, when on one hand, the number of facilities providing social services including the scope and quality of these services grows (residential, intervention, assistance services), on the other hand, the number of recipients of services grows (pensioners, young people, handicapped persons, socially excluded citizens). The consequence is growing demands of subjects of social care on the financial sources of the state, region and municipalities. The most of these facilities as well as the towns and municipalities try to solve this problem of sufficient financial sources for the recovery of services and investments with the aid of sponsors. Another not well designed region is the function of medical facilities and social care facilities in the field of the following care. At present, the sector of medicine substitutes partially the social care (e.g. chronic disease hospitals) and on the contrary, in the senior’s homes are specialized departments, substituting long-term care hospitals and specialized institutes (homes for psychotics and clients with Alzheimer, where the medical care is not paid by health insurance funds). The consequence of it is the not transparent economy of all the subjects and difficult identification of desirable savings. The state has no comprehensive conception of social care, individual fields of the social care are not treated in connection with related ones and the regions have not sufficient professional and financial sources for solution of this complicated branch. The necessary pre-condition of the solution of this unfavourable situation is the more effective co-operation of the health and social care, starting from the central level (relative ministries), through regional level (districts) up to individual municipalities.

4.5 Tourism and culture

4.5.A Tourism

Tourism ranks among significant factors contributing to the development of both the region and the entire economy. Its role is growing constantly and becomes a dynamic part of the development. There exists a multiplication effect typical for tourism development, which expresses economic impacts of tourism on a number of other industries, and by respecting the sustainability policy this industry also brings a positive contribution to the regional prosperity. Besides triggering new job opportunities the tourism is also co-stimulating the development of standard services and business within the region, mainly as a result of the increased volume of effective demand. Developing tourism also exerts a pressure on investments in infrastructure and on refurbishment of the aesthetical look of both urban and rural areas, which brings another positive effects in.

Tourist zones marketing There are 4 tourist zones within the Northeast Cohesion Region – the East Bohemia (Východní Čechy), the Krkonoše mountains, the Bohemian Paradise (Český ráj) and the Bohemian North (Český sever) which further split into 15 tourist areas, to be specific : the Podzvičínsko, the Kladské borderland (pomezí), the Hradecko, the Orlické mountains and the Podorlicko, the Pardubicko, the

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Chrudimsko-Hlinecko and the Bohemian and Moravian borderland (pomezí), the Krkonoše mountains West, the Krkonoše mountains-central part, the Krkonoše mountains East, the Bohemian Paradise, the Macha´s land, the Lužické mountains, the Ještěd crest, the Frýdlant area and the Jizerské mountains.

4.5.A.1 Potential of tourism The Northeast Cohesion Region’s position within the Czech Republic is relatively good, viewed from the physical-geographical prerequisites for the development of tourism. The heterogeneous landscape mosaic within a small spatial arrangement attracts concentration of different matters of interest and therefore can be regarded as a significant ”tractor” of tourism. Namely the beautiful nature consisting of flatlands and mountains with favourable hydrological and climatic conditions offers a number of opportunities, such as summer-time relaxation, hiking and winter sports. The area of the Northeast Cohesion Region offers a big number of tourist attractions and points of interest. Amongst the main tourist destinations are not only the natural localities (preserved areas, mountains, rock towns, etc.) intended for sports or relaxation activities but also municipalities with their cultural and historical monuments (strongholds, castles, stronghold and castle ruins, military and religious monuments, museums, galleries, look-out towers etc.). The natural potential for development of tourism gets extended not only by presence of architectural monuments in the region but also by a number of social, cultural and sport events, traditions of local people a.s.o. As regards the types of active leisure time spending viewed as an inherent part of tourism, there are also the modern and currently more and more sought-after leisure time activities being developed in the NUTS II Northeast Region in addition to the traditional hiking. Biking is becoming very popular these days in the whole region and in the specific parts of the region there are also rock-climbing and paragliding opportunities (e.g. in the tourist areas of the Bohemian Paradise, the Bohemian North or in the tourist area of the Kladsko borderline). In some parts of the Northeast Cohesion Region (e. g. in the tourist area of East Bohemia) can be traced prerequisites for specific forms of leisure activities like horse-riding, rural tourism, agricultural tourism etc. The most significant potential for development of tourism in the Northeast Cohesion Region, however, is seen in the presence of mountain areas with facilities providing opportunities for a wide range of winter sports as well as the standard summer tourism. This area including its recreation facilities ranks among the nation-wide most important tourist areas attracting lots of visitors namely during the winter season. Mainly the entire tourist area of the Krkonoše mountains and the tourist area of Jizerské mountains and in smaller scale also the hilly part of the Orlické mountains and Podorlicko area and the area of Kralický Sněžník are concerned. There are also a few spa resorts located in the Northeast Cohesion Region. However, number of such resorts is very limited there, which makes it less attractive for especially foreign visitors focused on this particular product of tourism, compared to other regions on NUTS II level (e.g. the North-West Region). Thousands of visitors come to several spa resorts in the Northeast Cohesion Region every year. These resorts can partly be used as means of a relaxation-focused tourism.

4.5.A.2 Travel industry commodities From the viewpoint of tourism in the entire NUTS II Northeast Region the existing potential of natural and cultural-historical attractions is very multifarious and less competitive, however, under the conditions of dynamically developing market. A visitor to the region exerts pressure on creation of new services of the travel industry extending those classic and standard ones to meet his/her specific demands on an active leisure time spending. In the Northeast Cohesion Region there is a lack of sufficient number of new travel industry commodities on offer, which would help fill in the market gaps and satisfy the increasing demand for holidays of a specific focus. Namely comprehensive commodities of a long-term nature triggering a significant multiplication effect on the entire region’s development have been missing. Putting comprehensive schemes and commodities (so-called service packages) in practice becomes one of the basic elements relating to the travel industry offered in the given region. Creation of new travel industry commodities shall first stem from the region’s potential and its unique offer. As far as the NUTS II Northeast Region is concerned, among such attractions there are for example the traditional crafts and folklore, history (namely the military monuments) and natural sights (mountains, rock towns, preserved areas etc.).

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4.5.A.3 Visit Rate Statistics One of possible methods of evaluation of the rate of visits to the NUTS II Northeast Region is the assessment of the performance of collective accommodation facilities used for the purpose of tourism. Based on year 2005 figures gathered from respective regions within the NUTS II Northeast Region the most visited place is the Hradec-Králové-Region (4th place within the Czech Republic), followed by the Liberec-Region (6th place) and the poorest from the viewpoint of the incoming visitors number waste the Pardubice-Region within both the NUTS II Northeast Region and the whole Czech Republic as such.

Table No 10: Performance of collective accommodation facilities used for the purpose of tourism by regions within the NUTS II Northeast Region in 2005 Avg. duration of Number of overnights Avg. number of accommodation Guests stays overnight stays (days) Net bed Room Out of Out of exploit- exploit- Out of that Out of that that that ation1) ation1) Locality Total foreigners Total foreigners Total foreign. Total foreign. (%) (%) Česká republika 12 361 793 6 336 128 40 320 477 19 595 035 3,3 3,3 4,3 4,3 35,8 42,4 Cap. city of Prague 4 108 565 3 725 180 11 204 950 10 368 571 2,7 2,8 3,7 3,8 53,4 60,7 Liberec-Region 768 061 242 445 2 741 134 962 515 3,6 4,0 4,6 5,0 27,3 37,1 Hradec-Králové Region 972 391 325 271 3 862 054 1 284 891 4,0 4,0 5,0 5,0 30,8 35,2 Pardubice-Region 329 395 52 749 1 097 031 173 258 3,3 3,3 4,3 4,3 25,2 30,0

Source: the Czech Statistical Office

4.5.A.4 Basic characteristics of visitors to the Northeast Cohesion Region By means of surveys carried out independently for the needs of processing of conceptual documents for individual tourist regions10 it was possible to define the basic characteristics of the region’s visitors. By age, visitors till 45 years, i.e. the young and the middle-aged represent the biggest share of visitors whose preferences and behaviour will play a key role in the future development of travel industry. A significant share is also held by families with children focused on offer of a static hotel-type of tourism. Share of the elderly is small. By nationality, the biggest share is represented by domestic visitors, followed by the citizens of Germany, Poland and the Netherlands. These are the main sources of foreign visitors to the Region. As for domestic visitors, they come from all corners of the country, but in some specific areas (like the Krkonoše mountains) visitors from the Prague region are predominant. Among the most frequent reasons presented in surveys was holiday spending, no matter if holiday focused on cultural sights visits or on sports or purely a static type of holiday. It means that predominant are the holiday-makers focused on recreation. Regarding the way the stays are organized, mainly the Czech visitors prefer the self-organized stays to any contract-based services11. Another group, very important one, is consisting of visitors focused on the package tour organized by travel agencies. Based on surveys carried out, the rate of TIC (Tourist Information Centres) service exploitation is still considerably low. Surveys also revealed that high percentage of visitors prefer short-time one-day stays with no accommodation services requested and exploited. The accommodated visitors prefer hotels and private accommodation facilities, potentially also accommodation capacities provided by their acquaintances or relatives. The second most exploited are the services provided by hotels and tourist lodging houses. Visitors´ own cottages and weekend houses represent an indispensable form of accommodation for the domestic visitors mainly. From the perspective of the means of transportations used for getting to the region, visitors´ own vehicles are predominant. Visitors get information on the region mainly from the Internet followed by the information offered by travel agencies, in smaller scope also radio, TV, press or folders are used for that purpose. Just a small percentage of visitors get information at the Travel industry fairs. The current traffic system represents the main reason for visitors´ dissatisfaction, mainly due to centres being frequently overloaded by individual traffic and insufficient parking capacities. Among other frequently commented problems belong prices being too high, poor marking of tourist paths, lack of

10 Source: Tourist region development scheme for the East Bohemia Region, Tourist region development scheme for the Krkonoše, Tourist region development scheme for the Bohemian Paradise, Travel industry development scheme for the Liberec Region 11 Among other things, this is a by-product of the fact that the offer of commodities in the sphere of the domestic travel industry is not much extended.

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public toilets and/or their poor quality, environmental pollution a.s.o. The natural potential of the Northeast Cohesion Region is being regarded as the main reason for satisfaction of the visitors to the region. The above characteristics would be useful as a background showing where certain specific activities exercised through the ROP “Northeast” should be directed to, involving namely the creation of travel industry commodities, improvement in traffic accessibility, upgraded quality of the basic and associated infrastructure, development of an information system for the needs of the travel industry etc.

4.5.A.5 Territorial preconditions for development of tourism structured by regions Despite the fact that the Liberec-Region belongs to frequently visited areas, namely thanks to certain areas (The Krkonoše mountains, the Jizerské and the Lužické mountains, The Bohemian Paradise, The Macha´s land a.s.o.), also the areas in need of a constant tourism development support - like the Frýdlant area in particular - shall be mentioned. There’s also a big potential for development seen namely in the sphere of family recreation and biking in the picturesque Podještědí area, the Podkrkonoší area and the Ralsko area and its surroundings. Regarding the Hradec-Králové-Region, first of all the area of the Krkonoše mountains (the Trutnov area) ranks among areas benefiting from good preconditions for tourism development namely thanks to the potential for winter recreation and summer tourism. Among other high-profile areas also belong the tourist area of the Kladsko borderline and the Broumovsko respectively, mainly due to rocks located there. The whole tourist area of Pardubicko belongs to areas with limited potential for tourism development in the Pardubice-Region, except for urban and several rural parts. Another tourist areas, i.e. the Chrudimsko-Hlinecko area, the Bohemian-Moravian borderland, the Orlické mountains and the Podorlicko area offer significant preconditions for tourism development, mainly of natural but also of cultural-historical character. The availability of infrastructure and travel industry services as well as traffic accessibility and other areas are considered to be somewhat problematic there. One of the traditional problems for development of tourism in certain specific areas especially is the high probability of potential conflicts with environmental protection interests in relation to the intended travel industry development plans (eg. in areas of the Jizerské mountains, the Krkonoše mountains and the Orlické mountains).

4.5.A.6 Infrastructure for tourism In principle the tourism-related infrastructure coverage of the Northeast Cohesion Region corresponds with distribution of the traditional tourism-related activities and their potential. However, the development of new forms of tourism and the growing demand for new types of tourist attractions will necessarily go hand in hand with the demand for the basic and associated tourism-related infrastructure outside the traditional recreation and tourist localities. The fact that the main volume of investments spent in the past decades on travel industry was directed to traditional destinations makes now the development of tourism in other region’s areas suitable for new ways of leisure time spending very problematic.

Basic infrastructure Basic infrastructure is represented by lodging and boarding facilities. The lack of balance is typical for territorial distribution of the current network of lodging facilities within the Northeast Cohesion Region, which basically corresponds with the traditional approach to distribution of the tourism-related potential. Significant territorial concentration of such facilities is apparent in the hilly areas of the Jizerské mountains, the Krkonoše mountains, the Orlické mountains and the Kralický Sněžník as well as in bigger towns. A general problem of certain parts of the Northeast Cohesion Region is an often inappropriate composition and varying quality of services provided by the lodging and boarding facilities. Especially the poor technical condition and low equipment level of these facilities is a problematic issue. Investments in this infrastructure shall improve basic conditions influencing the level of visitors´ satisfaction and enhance the standard level of services offered. There are certain differences in basic infrastructure of individual tourist regions located in the NUTS II Northeast Region’s territory, therefore such areas are analyzed separately.10.

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The East Bohemia Tourist Region Total capacity, structure and quality of lodging services plays a significant (almost decisive) role for creation of commodities for a tourist region. A survey conducted among the visitors revealed that lodging services have been criticized for both the quality of services provided and the segmentation of services offered (the whole region lacks hotels and bed and breakfasts of *** class and, on the other hand, there is an abundance of unsatisfactory lodging houses and recreation facilities in many tourist centres. The level and scope of lodging capacities is a very limiting factor for the development of the associated infrastructure as well as for creation and development of new attractions and exploitation of the region’s potential by travel agencies etc. Boarding services have long been the most developing tourist services in the region. Yet in many cases their scope (and first of all their quality) is still unsatisfactory. This namely holds true for localities situated outside big towns. Nowadays, the supply already exceeds the demand in towns and large tourist centres. Despite this fact, the visitors criticize certain phenomena connected with boarding services offered. The region is lacking local fast food service (mainly in recreation localities and ski centres) as well as specialized restaurants with typical offer of traditional dishes.

The Krkonoše Tourist Region Segmentation of accommodation facilities in the Krkonoše is to a large extent conditioned by historical development of that area. Low-capacity and less-equipped bed and breakfasts are predominant, followed by chalets typical for the Krkonoše area, cottages, hotel-type accommodation (16 – 20% of the total capacity), lodging houses, motels, recreation facilities etc. The present capacity segmentation is less favourable mainly for organized stays of higher number of clients. Also the level of equipment is perceived to be a weak point as rooms often lack toilets (which are, of course, not requested for all types of facilities) with sports grounds, swimming areas (pool), information service (e-mail, internet access) being frequently missing too. Very different is also the level of accommodation facilities (technical condition, equipment). A considerable part of such facilities stems from companies´ recreation facilities of different standards, many hotels and bed and breakfasts has not attracted any investments since years. Overall condition of the lodging base can therefore be very often tagged as dissatisfactory from the perspective of existing competition, and from the perspective of external competition in particular.

The Bohemian North and The Bohemian Paradise Tourist Regions (area of the Liberec-Region) An absolute majority of accommodation capacities can be exploited all year long (there is approx. 7% of seasonal facilities only – most of them in the Česka Lípa territory - Doksy and the Macha´s Lake). Segmentation of the types of accommodation facilities is to a certain extent conditioned by their historical development. Low-capacity and less-equipped bed and breakfasts are prevailing over hotel- type facilities (approx. 15 – 16% of the total capacity) and recreation facilities, chalets and weekend house colonies. This situation is far from what can be regarded as a strong point for future development, for from a long-term perspective such supply is seen as being less competitive (relatively lower prices for accommodation in bed and breakfasts represent a competitive advantage, they, however, cannot generate necessary profit for the needed refurbishment of such facilities). The discovered capacity segmentation is less favourable mainly for organized stays of higher number of clients. Analysis has also disclosed a different level of accommodation facilities (technical condition, level of equipment). Overall condition of the lodging base can therefore be often tagged as dissatisfactory. As a weak point stands first of all the level of equipment, e.g. most of accommodation facilities lack toilets in their rooms. Level of information service provision and internet access availability is also perceived as insufficient.

From an overall perspective the number of accommodation capacities within the Northeast Cohesion Region can be classified as sufficient, however, the quality and segmentation of such facilities are not meeting the visitors´ demands, which triggers an insufficient capacity utilization in off-season periods especially. Another problem is the significantly imbalanced distribution of the tourism-related infrastructure in the region.

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Picture No 7: Accommodation facilities´ capacity per 1000 inhab. by administrative districts of ORP NUTS II NE in 2005

Border of NUTS II Border of regions

No. of beds per 1000 inhabitants

2 and more

Data source: The Czech Statistical Office, regional representatives 2006

Picture No 7 provides an analysis of accommodation facilities´ capacity in the Northeast Cohesion Region. An interregional comparison shows that the highest number of beds is in the Hradec-Králové Region followed by the Liberec-Region. The lowest number of beds is in the Pardubice-Region, which fully corresponds with the traditional perception of the area’s attractiveness for tourism and related long-lasting lack of investments in the local tourism-related infrastructure. When converting the bed number per 1000 inhabitants, the biggest number of beds can be found in the Liberec-Region followed by the Hradec-Králové-Region and lowest bed number falls on the Pardubice-Region. When converting the bed number per 1000 inhabitants within the territory of the NUTS II Northeast Region, the number of its beds prevails over the same parameter measured for the entire Czech Republic. The available data point at a clear fact that the biggest concentration of beds in the entire NUTS II Northeast Region can be found mainly in mountainous areas and/or in otherwise attractive areas (Českolipsko, Český ráj).

Associated infrastructure The associated infrastructure forms further conditions for provision of the tourism-related services in the field of leisure time spending and recreation especially, but also with respect to the conference tourism. Biking, being one of many leisure time activities, has recently been undergoing a huge development. There have already been tens of kilometres of marked bike paths commissioned in the Northeast Cohesion Region. The regional and local bike paths set on the 3rd class roads and field paths as well as forest roads are connected to the main bike paths of the Europe-wide importance. Bike paths differ by distance and difficulty level as well as by their importance and quality. Their marking exists mainly thanks to initiatives of respective micro-regions, who have been funding both the bike paths schemes and subsequent placement of bike path signs from their own budgets. Bike paths network, however, is incomplete and in some areas lacks interconnections. Also accompanying services have been missing in relation to the already-existing bike paths network (pull-off spots including route itineraries, hygienic facilities etc.). The surface of certain bike path stretches is not satisfactory too. The presently missing bike path network represents a problem namely for bikers´ safety. In the Northeast Cohesion Region there are hundreds of kilometres of marked tourist routes. These are considered to be a standard element of the associated infrastructure and can also be regarded as an inherent part of the tourism-related potential in the NUTS II Northeast Region. New forms of tourism and new attractions are being demanded for, such as museum expositions held in a modern way, thematic pleasure parks, archaeological parks etc. In connection with the efforts to widen the scope of the region’s tourism-focused services, the growing demand for such activities involving for example the horse-riding, agricultural tourism, adrenalin tourism and relaxation-focused tourism needs to be satisfied namely from the perspective of associated infrastructure erection. Such

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activities offer a considerable potential for development of tourism outside the traditional tourist localities. Besides recreation facilities situated in the well-known and frequently-visited tourist localities of a nation-wide importance, there is also an interesting number of recreation facilities in other areas of the Northeast Cohesion Region offering favourable natural conditions for winter and summer sports on one hand and lacking sufficient and good-quality background concerning the associated infrastructure in particular on the other hand. An obvious issue for all centres is also their seasonality. The lack of specific associated infrastructure (swimming pools, bathing resorts, tennis courts, multi-purpose playgrounds, golf courses etc.) also prevents the most recreation centres from being exploited on a whole-season basis.

4.5.A.7 Information systems In the Northeast Cohesion Region, there currently exists no interconnected tourist information system to involve tourist destinations marking, information centres network, internet-based information services a.s.o. and to include systematic and coordinated information on travel-industry-related services and to promote regional tourism-related commodities in a comprehensive way. Individual tourist regions and areas respectively, have partly built up their own information systems, which, however, differ from each other by quality and scope of information provided. What is being felt as problematic is mainly their isolation and focus just on a given locality and its attractions. Through creation of high-quality information systems and their interconnection with information network on a national or even international level a better exchange of internal information among relevant travel industry bodies of the region and namely a better access to tourist information from the outside will be secured. The information system providers present in the three regions of the Northeast Cohesion Region are mainly represented through information centres, most of which have been commissioned by municipalities themselves. There are also private information centres operating in some towns of the region. Their activities are being supplemented with those of information centres organized by public libraries connected to internet. Nevertheless, current situation in this sphere cannot be regarded as sufficient. Lack of high-quality navigation systems also ranks among particular problems in the region disliked by both visitors and local businesses operating in the sphere of travel industry. This has a negative impact on less-known monuments in particular, which, however, usually represent a significant attraction for development of the local tourism in given area.

4.5.A.8 Traffic accessibility In general, the region’s geographic position and related traffic accessibility is perceived to be one of the strong points of the Northeast Cohesion Region. Yet it is not possible to claim that all parts of the region and tourist areas respectively, have comparable conditions in this field. Within the NUTS II Northeast Region, only the distant parts, such as the area of the Broumovský headland and the Frýdlantský headland, the Orlické mountains and the Králický Sněžník and certain areas of the Svitavsko district and the Moravská Třebová district and the headlands of the Českomoravská vrchovina etc. are less accessible for the traffic. In connection with the above, the insufficient parking capacity including appropriate associated services for visitors and tourists also represents a significant problem for visitors to certain tourist centres and selected attractive places. Access roads to some tourist attractions are in bad condition too.

4.5.A.9 Marketing and organization of tourism (destination management) One of the main tasks for organization of tourism is to ensure coordination of marketing activities and create collective tourism-related commodities in tourist regions, irrespective of existing regions´ borders. The partnership of all regions under the NUTS II Northeast Region working as a basic platform for organizing tourism on a regional level and the tourist regions´ marketing activities having been accepted by the national marketing body – the Czech Tourism agency (The Czech Agency for Travel Industry) – are perceived as very positive phenomena. First of all, the individual municipalities, associations of municipalities and other bodies in the region have an irreplaceable meaning in the sphere of tourism organization and marketing activities. Unfortunately, fragmentation and lack of coordination in activities performed by the above-mentioned institutions are being considered as the main issues of the present time. Institutions active in the field of tourism as regional or district tourism organizations operate in all tourist regions or areas

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respectively. Main purpose of organization and marketing of tourism is definitely not to create new “marketing agencies“, but rather to clarify the competences and responsibilities. Main task is to create a functional structure for a long-term achievement of necessary marketing objectives. It is vital to establish and utilize a dynamic marketing and promotion conception for achievement of region’s long- term plans. One of the basic preconditions for a successful development of the travel industry in the region is mutual communication and coordination of activities among individual travel industry bodies (municipal authorities, State administration, tourist information centres, private businesses, institutions dealing with tourism and professional associations). As regards the regional travel industry development, it is necessary to reassess and increase the efficiency of involvement of the State administration’s bodies in marketing realization. Besides the basic services (lodging, boarding a.s.o.) falling under the competence of the private sector, most of region’s attractions (tourist destinations) are owned by municipalities or by the state. Their sole competence is to protect and refurbish monuments, tourist signs, to protect natural localities and officially promote tourism in their region. Of course, cooperation between public and private sectors does exist but still is insufficient with respect to the fact that such cooperation has so far been limited just to random collective presentations at fairs, organization of cultural events a.s.o. So far there has not been any communication platform allowing long-term conceptual cooperation created. Some municipalities established the special tourism-focused committees for that purpose working as a part of municipal councils and advisory bodies dealing with travel industry have also been set up at the Regional Authorities. A significant problem for the current marketing of tourist areas appears to be the coordination of activities among regions, where such tourist areas are located and last but not least also the definition of marketing priorities on lower level of organizational structure involving individual tourist regions or areas respectively. Currently, individual microregions already exist in a form of associations of municipalities performing the development and marketing activities in their sphere of interest, however, a microregion’s territory is too small from the viewpoint of its effective promotion not only in the international but also in the domestic travel industry market. In order to get the coordination and implementation function of the existing tourist organizations fully exploited, the coordination of activities towards the defined tourist areas has to be intensified. The cooperation with the Czech Tourism agency and its representations in foreign countries is regarded as important in order to ensure not only access to information on foreign target groups, but also availability of high-quality information on the given region for foreign countries. Such cooperation has not yet reached the desired level. A mutual exchange of updated information in particular is missing. From this point of view the region’s cooperation with individual above-mentioned levels of the travel industry organization is insufficient. Based on opinion of qualified experts from the public the regional marketing organizations shall be existing to support the development of tourism in the tourist regions´ territories and to develop activities covering the whole scope of marketing and tourism development conception at the same time. Organizations should define their tourism development conceptions, collect updated information, process analyses, draft and implement commodities, assist with cooperation and communication among institutions on regional, national and international level, provide for the promotion of tourism-related commodities and region’s presentation in order to help define directions for further development of tourist regions and areas within the Northeast Cohesion Region. For a quality performance of the aforementioned activities it is a must to have a concentrated funding tool in place along with a proactive cooperation among institutions present in a given locality.

4.5.B Culture

The sphere of culture and cultural heritage has a relatively strong link to travel industry. These two areas are linked closely to each other and complement each other, thus providing considerable mutual overlaps. The sphere of culture’s relationship with tourism is also considered to develop dynamically and to have a partial influence on creation of jobs. In the NUTS II Notheast territory there is a number of historical and cultural monuments and other cultural attractions, therefore it is possible to say that the whole territory offers a high cultural potential. The individual regions within the NUTS II territory offer cultural monuments that are characteristic for the given areas making them special and different from the rest of the regions within the NUTS II territory. The cultural life within the NUTS II Northeast Region gets enriched through traditional music and theatre festivals and other specific cultural events. An important part of the region’s cultural life are activities conducted by amateurs and hobby groups focused on artistic work. As yet, however, the great cultural potential has not been exploited for either the development of tourism (monuments, museum and gallery program, etc.) or education (educative role of museums, libraries, possible use of cultural monuments as education centres, etc.). Cultural development may

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also have an impact on unemployment rate, for a number of cultural amenities (libraries, museums, local community centres) lack personnel owing to a limited budget of their owner. An artistic-work- focused hobbies shall not be omitted either, since these contribute to a full-value life of the adults and prevent from a socially-pathological behaviour of children and young people. Cultural amenities within the NUTS II territory have been established either by individual municipalities or by the region or by the MK of the Czech Republic or by other institutions. In general the mentioned institutions´ financial contribution towards solving the culture-related issues is insufficient causing mainly dilapidation of monuments, poor structural-technical condition of a number of local community centres, libraries and museums, insufficient care for cultural heritage and its presentation outwards, limited offer of cultural-educational programs, etc. Although there is still demand for high-quality cultural services in small towns, the local governments do not have enough funds available for such a support and have also different preferences. This results in an undesired concentration of cultural services in big centres on one hand and on the other hand in an immense decline of culture level in smaller towns and rural areas. The rural culture is then limited just to performances organized by local associations of amateurs (theatricals, choirs, etc.), who often lack the necessary technical and economical background and to libraries being open for a minimum time and having limited selection of new items available. Most of the local community centres were built from 1950´s to 1970´s. The sole operation of these centres is so expensive for their owners (local governments in general) that already no other funds are left either for a quality programs to be organized there or for their repairs or refurbishment. The lay-out of rooms in these centres is unsatisfactory, the heat piping and power wires are obsolete, which also holds true for the sound and graphic equipment, cloakrooms´ background and toilets, stage equipment is missing or broken, etc. In most cases these centres are used as “assembly halls“ now, i.e. places where hobby groups perform their artistic work and/or a limited number of social parties like balls are held. Recently these facilities are being let on often unsuitable terms (on a short- or long-term basis) to various commercial activities of private institutions and also serve as shops or warehouses out of economic reasons. Potential for their development (providing their technical condition and sufficient financial resources are secured) can be seen in the possible offer of a wide range of cultural programs, educational activities focused e.g. on a language and computer literacy, organization of conferences, discussions and presentation of comprehensive recitation sessions, organization of art- focused workshops in the form of specialized hobby groups a.s.o. Museums and galleries have long been struggling namely with insufficient and unsuitable working space. In general, they are located in historical monuments that provide no opportunity either for a proper deposition of collections nor for their presentation. Due to economic limitations they also suffer from a lack of personnel and therefore perform just a documentation and registration role with respect to collections they are taking care of. There are no funds available even for processing, restoration, preservation and completion and effective presentation of collections. Besides museums established by municipal governments, also a number of community-supported activities has recently grown in order to focus on this topic, which offers quite a high tourism development potential. From financial perspective institutions of this kind depend on financial resources gathered from subsidies and sponsors and local government. Since they usually do not have experts in either history or museum work, the quality of their collections processing and presentation is rather imbalanced. They also have problems with effective promotion. In general, it is possible to claim that museums offer an indispensable potential for tourism. Libraries are located in almost every municipality of the region. Such as other kinds of cultural amenities, also libraries lack sufficiently-sized rooms, funds and personnel. Their work is in most cases limited to the simple lending of books, but thanks to the scheme organized by the MK and MI the number of libraries offering public internet access is growing. Potential for development of libraries is seen namely in extension of the scope of services they offer with respect to the information society development, in provision of such services like readers development schemes and development of intelligence in general (discussions, contests, promotion events,…). A high number of amateur cultural associations contributing towards an extended offer of cultural events in individual regions is characteristic for the Northeast Cohesion Region. As a certain problem is then regarded the absence of institutions ensuring production, methodical activity, education, advisory and monitoring in the field of the non-professional culture. Development of culture in the Northeast Cohesion Region should be first of all focused on the following priorities: • Ensuring accessible cultural infrastructure, • Improving conditions for investments and culture-related services provision, • Providing for cultural heritage protection and revitalization, • Possibilities for exploitation of cultural potential for development of tourism

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4.5.B.1 Monuments and properties of historical importance In the entire NUTS II Northeast Region there are many movable and immovable cultural monuments, out of which some are of not only nation-wide but also of European-wide significance. In general, it is possible to claim that the Northeast Cohesion Region offers relatively high cultural-historical potential that can be utilized for the needs of the travel industry development. First of all the large number of strongholds and castles and other cultural-historical monuments make this area attractive. To significant monuments strongly connected with tourism belong also the buildings of folk architecture. Besides visits to monuments themselves, the tourist attractions for regions´ visitors include also the accompanying events, like fencing tournaments, reconstructions of famous historic battles etc. In the territory of the Northeast Cohesion Region there is a monument recorded in the UNESCO World’s Cultural Heritage List too (The Litomyšl castle), further there are several tens of national cultural monuments, several tens of urban conservation areas in towns and villages of the region, two landscape conservation areas and several thousands of movable and immovable cultural monuments listed in the Central Register of Cultural Monuments of the Czech Republic. Among the most-visited cultural monuments within the Northeast Cohesion Region from the perspective of tourism there are the Ratibořice castle, the Trosky stronghold, the Dětenice castle and the Vysočina open-air museum, where each of the aforementioned monuments receives around 100 000 thousand visitors per year. By number of visits to monuments of individual regions, the Hradec-Králové Region ended up on the 5th position, the Liberec-Region on the 6th position and the Pardubice-Region on the 10th position (figures relating to the year 2004). The deteriorating structural-technical condition of the monuments collection, low promotion efficiency and insufficient offer of accompanying activities is felt to be the basic problem for utilizing cultural monuments as attractions for tourism. At the same time there is no effort on the part of municipalities and/or associations of municipalities to exploit the cultural-historical potential of the area in a more effective way by means of coordination of such activities in particular. It is also very problematic to force some of the monuments owners to furnish a proactive cooperation on making these monuments accessible to extend the offer for tourist. Exploitability of cultural-historical monuments for the needs of tourism is also limited by external circumstances, such as problematic traffic accessibility and namely the insufficient or improper parking capacities and lack of appropriate background for visitors. Also the low public awareness concerning the cultural potential of individual monuments and resulting approach to these values by local public represents a general problem for this sphere.

4.6 The living environment

The quality of natural environment within the Northeast Cohesion Region has been improved significantly over the recent 15 years. • Mainly in 1990´s high investments in particular in environment-friendly technologies resulted in a significant improvement in air quality, nevertheless the urbanized districts where the emission and noise limits continue to be exceeded remain problematic. • Gas was introduced in that time to many municipalities, however, the trend of utilization of solid fuels for local heating is being re-adopted in rural areas especially. Such environmentally negative phenomenon is triggered mainly by prices for more environment-friendly ways of heating being gradually soaring and thus becoming economically unbearable. • Large interventions in building of wastewater treatment plants resulted in apparently better quality of surface water in some localities of the region. Total amount of pollutants discharged into surface water has been reduced. • Landscape protection has been intensified namely by declaration of new protected areas under the Natura 2000 system. Reducing biodiversity of the environment and rising number of threatened species remains to be a continual problem. • An increase in traffic has a considerably negative impact on the environment. Current threat is represented by noise increase and permanently exceeded emission limits owing to ever- growing volume of vehicle transportation especially in municipalities situated on or close to transit roads. • The increased volume of waste production and its treatment is another environmentally negative phenomenon of the past few years. On a long-term basis the volume of separated

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waste goes slowly up, nevertheless, a suitable recycling and other forms of its exploitation still lag behind in favour of the dominant landfills being perceived as a basic method of waste disposal. Several older landfills with poor or no technical provisions represent current environmental threats, mainly due to a potential leaks of pollutants into soil and ground water. • The high power demand of most of the industrial processes compared with the generated GDP represents an ongoing problem. The systematic and goal-directed exploitation of alternative power sources has so far not been developed.

4.6.A Air

Air quality is characterized by a significant territorial difference not only in terms of individual regions but also in the scope of smaller territorial units. Higher pollution rate is in the Liberec-Region and in the Pardubice-Region. The Hradec-Králové Region ranks among those regions with relatively clean air and no major pollution sources. The Liberec-Region faces a high load of emissions coming from both local and distant sources (power stations in Germany, Poland and sources in the central parts of the Czech Republic). The air pollution in the Pardubice-Region reaches the highest values in the Pardubice district mainly, due to concentrated traffic, industry and power stations of Opatovice and Chvaletice, although their influence has been reduced in recent few years thanks to the installation of desulphurization units. It is a pleasure to claim that the negative impact of the distant emission transfers including mainly dust particles and sulphur oxide is being gradually reduced as a result of bringing the big thermal sources in line with environmental practice. What remains unsolved, however, are many medium- and small-sized pollution sources. Specific emissions of nitrogen oxides per 1 km2 reach the highest values in the districts of Pardubice and Jablonec nad Nisou, increased concentrations have also been found in the districts of Liberec and Trutnov. Specific emissions of sulphur dioxide per 1 km2 reach the highest values in the district of Pardubice, increased concentrations have been found in the districts of Liberec, Jablonec nad Nisou, Semily, Trutnov, Náchod and Rychnov nad Kněžnou. The rising pollution with nitrogen oxide in town centres results from increased car transportation and its inappropriate organization. New traffic-focused construction schemes (highways, speedways and by-pass road around towns) have a positive impact on air quality. Higher attention is also paid to exploitation of environment- friendly means of transportation. Also the support given to bio fuels and other kinds of renewable power resources is of a growing importance. Large-scale reduction of NOx emissions and organic volatile substances also means the only way of how to reduce the burden of excessive concentrations of ground ozone.

4.6.B Water

The Region offers exceptionally rich surface and ground water resources. Over 50% of the total area of the NUTS II Northeast Region has been declared protected landscape of natural water storage due to its natural conditions (The North-Bohemian cretaceous system, the East-Bohemian cretaceous system, the Polická basin, the Jizerské mountains, the Krkonoše mountains, the Orlické mountains, Žamberk – Králíky and the Žďárské hills). Some of these resources are not protected in a sufficient way. For example in the area of Česká Lípa, the water contamination is a by-product of exploitation of radioactive raw materials. In the Northeast unit’s territory there are also healing water resources used first of all by spa resorts. The cleanliness of many surface water stretches has improved significantly since the wastewater treatment plants had been commissioned. Also the reduced industrial and farming activities contributed to this improvement, however, the situation is not that much satisfactory in other spheres. It will be necessary to keep eyes on removal of another local surface water and ground water pollution sources as well as on large-scale removal of pollution of the aforementioned water forms and on removal of causes triggering changes to water balance in respective areas. In this context it is necessary to increase the number of population connected to public sewerage system and provide a satisfactory sewage collection and wastewater treatment system also to municipalities not exceeding 2000 equivalent population. By the end of the year 2010 all municipalities with equivalent population of 2000 – 10000 must have their own wastewater treatment plant, so that the discharged waste water is in compliance with qualitative requirements under the EHS regulations. Potable water mains in many localities will have to be upgraded and refurbished. The quality of surface water in certain water streams of lower flow rate passing through localities from which they receive untreated sewage is unsatisfactory.

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Also water eutrophication is on the increase, which makes itself felt namely through development of microscopic organisms dispersed in water (algal bloom). Main cause of this situation is an excess of nutrients in the water system, especially of nitrogen and phosphorus. From the perspective of discharge conditions the problems with rapid escape of storm water from the area persist. This is namely due to deforestation, insufficient natural retention capacity of the mountainous areas with the highest precipitation amounts, inappropriate alterations of small streams in the past and land reclamations often set to localities not suitable for that kind of intervention. In the event of unfavourable climatic conditions the faster discharge of water from the catchments area results in floods.

4.6.C Soil

The farm land covers 55.9% of the total area of the NUTS II Northeast Region. There is a significant difference among individual regions. In the Pardubice-Region the area of farm land represents 60.6% and 58.9% in the Hradec-Králové Region. The Liberec-Region offers lower proportion of farm land (44.5%), namely because of the position and morphology of the given area. Proportion of the arable land in the total amount of farm land also differs by regions. The nation-wide average proportion of arable land (71.7%) gets exceeded in the Pardubice-Region only (73.4%). In the Hradec-Králové Region there is just 69.2% of arable land and the relevant value in the Liberec-Region lies significantly under the average (49.6%). If compared by districts, above-average values of arable land share can be found in the districts of Pardubice, Hradec Králové, Jičín and Svitavy, it means in areas boasting with favourable climatic conditions and intensely developed agricultural production. Out of the total non-farm soil fund the biggest part belongs to forests. The Liberec-Region has 1st position in the Czech Republic with its 44.2% of forest land out of the total area of the region (nation- wide average value is 33.6%). Share of forest land in the Hradec-Králové Region and the Pardubice- Region lies under the region-wide average value (30.8% and 29.4% respectively). The highest proportion of forests is in the mountains. The area of farm land is subjected to just a negligible reduction, unfortunately not in favour of forestation. The biggest farm land losses happen in suburban areas, namely in favour of new building schemes (commercial networks, industrial premises and other). A new trend of setting industrial zones on „green fields“ has been observed and houses and apartments for private living move towards vacant countryside too. So-called urban sprawl or suburbanization (uncontrolled or unleashed house- building) is regarded as a serious problem for the development of namely those rural areas that form suburbs of big towns. In general, it is possible to say that business activities have many times been directed towards the best arable lots of soil in the surroundings of bigger urban settlements. Reason for that is their less-demanding and cost-effective preparation from an investment point of view and relatively low price of arable land compared with building plots. An interest in revitalization of all types of the so-called brownfields (farming and industrial properties, civic amenity properties…) is very low. A provision for protection of the best-quality farm land reserves including forests for a sustainability of the countryside and natural values ranks among the current priority problems of the region. The proportion of an uncultivated land faces just a small local increase. High proportion of soil threatened with water and wind erosion is regarded as an ongoing problem.

4.6.D Noise

An increased noise level represents a burden for especially big settlement units and municipalities with an unsolved intense transit traffic. An automobile transport represents the biggest source of noise pollution. The noise level might have been reduced as a result of a progressive modernization of vehicle fleets, however, an increase in the number of vehicles exploited and especially in the heavy transit traffic has been witnessed. Basic precondition for reduction of the noise burden in municipalities is a comprehensive solution to transit traffic across the territories of the Liberec-Region, the Hradec-Králové-Region and the Pardubice-Region counting namely on construction of highways, expressways and by-passes of municipalities to limit the transit traffic passing through the urban settlements in a maximum possible scope. The anti-noise measures are of a local meaning only. Construction of new ones is under way in certain localities. Noise limits for pollution from other sources are being exceeded locally (railway and air transport, industrial production).

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4.6.E Waste management

The total waste production is high all over the territory. As regards the waste production the biggest proportion falls on waste coming from construction and demolition work and unsorted public waste. From the viewpoint of volume, a significant share is also possessed by agricultural waste, wrecked cars and sludge from wastewater treatment plants and septic tanks. All regions share the same waste treatment problems. Although the legislation prefers separation and further utilization of wastes to their storage on landfills, in reality the storage of an unsorted waste prevails on economic grounds. The largest dumping grounds are situated in Chvaletice in the Pardubický-Region and in Košťálov in the Semily district. In the Liberec-Region there was made a principal change to the way the public waste was treated in the year 1999. A new TERMIZO p.l.c. Liberec facility was commissioned to start waste incineration. Motivation aimed at limited waste production has so far been ineffective. Despite the amount of separated waste being increased in general, the possibility of its recycling or utilization for other purposes has not been sufficiently exploited. All the three regions within the Northeast Cohesion Region possess an elaborated and approved Waste management plan, which is the strategic source document for waste management activities. The following objectives have been incorporated in the mentioned plan : raising efficiency of waste treatment through e.g. increased sludge separation, more effective utilization of packaging materials, utilization of waste for power generation, collection of dangerous parts of the public waste, environment-friendly way of dangerous waste disposal and also composting of biologically-degradable waste including the sludge from wastewater treatment plants with their material utilization preferred. There is a number of implementation schemes being developed at the moment to reach the above objectives.

4.6.F Historical environmental burdens

In the Northeast Cohesion Region there are old and large environmental burdens and devastated lots, disposal of which attracts high and long-term investments. For example, chemically polluted water and soil as a result of the uranium exploitation can be found in area called Hamr na Jezeře – Stráž pod Ralskem in the Česká Lípa territory, rocks contaminated by Soviet army have been discovered in the former military area of Ralsko. Rocks and underground water in Červený Kostelec in the Hradec-Králové Region contaminated by chlorocarbons from degreasing agents that leaked from the TIBA textile factories and from a factory producing watches and watch faces in Nové Město nad Metují represent the most serious environmental burdens unsolved. Here the contamination cloud has come dangerously close to the Litá drinking water resource. Old dumping sites and contaminated industrial properties represent historical environmental burdens and devastations present in the territory of the Pardubice-Region. Although the process of their removal or securing has in most cases been launched or even finished in the recent past years, there still exists a number of burdens intact owing to cost of their sanitation being higher than price of the respective real-estates or because of the equivocality of ownership rights. The most serious cases of historical environmental burdens can be encountered in the Pardubice district (ALIACHEM factory premises in Časy) and in the Chrudim district (Bor u Skutče and TRANSPORTA), nevertheless their redevelopment is under way right now.

4.6.G Nature preservation

The territory of the NUTS II Northeast Region is characterized by a large amount of protected areas. Almost 1/5 of the region’s total area is protected by legislation. The most significant locality is the Krkonoše national park founded as early as 1963, area of which is 36 300 hectares. In the year 1992 both sides of the Krkonoše mountains have been put on the list of the UNESCO´s world network of biospherical reservations as the bilateral Krkonoše/Karkonosze biospherical reservation. Among the protected landscape areas there are the České Středohoří, the Kokořínsko, the Lužické mountains, the Jizerské mountains, the Bohemian Paradise, the Broumovsko area, the Orlické mountains, the Železné mountains, the Žďárské hills including their protective zones. Also small-scale protected areas have been declared (national natural monuments, national landscape parks, natural monuments and nature preserves). There are 111 of such areas present in the Hradec-Králové Region, another 108 in the Liberec-Region and 97 in the Pardubice-Region. In terms of the NATURA 2000 system

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several areas of bird protection and localities significant for their European meaning have been declared as regional parts of the European network of conservation areas within the Northeast Region.

4.6.H Power

The quality of living environment, namely of air, gets significantly influenced by methods used for power sources exploitation. Total power consumption in the region is on the increase. All the three regions within the Northeast Region have their Territorial Power Concepts processed. The permanently high power demand of manufacture activities compared with GDP and a very low proportion of alternative and renewable power resources utilized (solar energy, wind and water energy, energy generated from the biomass processing, heat pumps a.s.o.) remain to be a collective problem not only for the manufacturing industry but also for the sphere of living and transportation. The objective is to reduce the consumption of primary fuels and emissions, namely the carbon dioxide production and at the same time to obtain sufficient power capacity for the area concerned. Despite being reduced, the high volume of greenhouse gases produced still represents a persistent problem. Achievement of energy savings in households represents a significant precondition for reduction of the Region’s total power demand. First of all the properties built from iron-concrete panels have a very high power demand thus creating a huge environmental burden for the region.

4.6.I Environmental risks

Environmental risks elimination is important for preserving or even increasing the quality of the living environment, potentially also for the health of the population and economic wealth of the region. The Northeast Region’s territory is first of all exposed to the following environmental risks: • Concentrated intense traffic in urban areas causing deterioration of the quality of air and natural environment and adversely increasing the level of noise pollution. • Floods – not all urban areas threatened with floods have their flood plans approved. • Leaks of dangerous substances from mainly industrial areas and first of all from chemical plants and the subsequent contamination of environment and population. The Pardubice agglomeration is faced with the highest risk. • Erosion – the effective measures implemented to protect the soil from erosion are seen as insufficient (landscape reclamation – comprehensive ground shaping, organic landscaping including grass sowing, landscape segmentation, establishment of ponds, revitalization of rivers a.s.o.). • Significant forest damage namely in the mountainous areas, not only as a result of emission burden but also due to inappropriate types and age of the forest ecosystems and the system of their management. • Reduced landscape’s biodiversity – it is possible to observe local increases in the species diversity, however, the contrary is proved to be the current trend. There is an ever-growing increase in the number of threatened animal and plant species of all categories.

4.6.J Environmental education

The public awareness of environmental issues, environmental education and sustainability is still on a relatively low level despite the fact that the sphere of environmental education and training (EWO) has seen a marked development. The sustainability and sustainable life issues become more and more an up-to-date topic with respect to limited natural resources, deteriorating environment, diminishing forests, inappropriate anthropogenic interventions in the landscape providing fertile ground for natural disasters etc. In the Hradec-Králové Region the EVVO topic belongs to the best developed and subsidized ones within the whole Czech Republic. Its development and stepwise implementation is still fighting several basic problems like the lack of financial resources, unequal location of the EVVO centres across the region, prevailing focus on “traditional“ target groups (kids and young people, teachers and tutors) and limited scope of EVVO activities provided to the general public, public service or entrepreneurs. For the EVVO concept it is necessary to lay emphasis also on a holistic and inter-disciplinary approach.

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The implementation of education and information systems connected with environmental and sustainability matters is rather slow in the Liberec and the Pardubice-Regions. The scope and intensity of such educational schemes are insufficient. There is an apparent lack of implemented functional information systems focused on environmental issues. In the region there is a number of non-governmental organizations dealing with nature and environment protection. Citizens do not have a sufficiently developed responsibility for environmental protection and consider the environmental education to be a rather marginal matter. The level of involvement of citizens in decision-making processes is low.

4.6.K Summary

Summarized evaluation of the Northeast Region’s natural environment quality: • The region is characterized by a high level of natural values protection. Nearly 1/5 of the total area is protected by legislation (protected landscape areas and the Krkonoše national park together with the biospherical reservation). The negative aspect is the decreasing landscape biodiversity in several localities. • The area of the Hradec-Králové-Region is not burdened with any significant air pollution sources of environmental impact. The Pardubice area has been faced with a deteriorating situation due to emissions from industrial production, which cumulate together with other emissions coming from more distant sources (the Chvaletice and Opatovice power stations) and have an adverse effect on forests in the mountainous areas of the Krkonoše mountains and the Orlické mountains. In the Liberec area there is a fallout of emissions from power stations and industries located in Germany, Poland and partially also from the central parts of the Czech Republic. • The Region offers exceptionally rich ground and surface water resources (protected water storage areas). Some localities face poor protection. Water quality in particular localities gets deteriorated as a result of pollution from old industrial production or mineral exploitation. Erection of wastewater treatment plants and inhibition of industrial and agricultural production would help improve the surface water quality. The increasing water eutrophication is perceived as another negative factor. • In the region (namely in the Hradec-Králové and the Pardubice-Regions) there is a big piece of high-quality farm land. The Liberec-Region has got the highest number of forested areas. Total volume of forested areas is increasing slightly, farm lands are devastated through often inhibited agriculture and a high-quality farm land near bigger towns is being seized for housing construction development. • An increased noise and emission levels are seen namely in urban areas struggling with heavy transit traffic, which is not being dealt with. The road traffic is the major violator of the noise limits. • Economic activities as well as habitable properties have high power demand. Utilization of alternative and renewable resources is not developed. All regions have their Territorial Power Concepts processed. • All the three regions within the Northeast Cohesion Region share the same waste treatment problems. There exists an elaborated and approved Waste management plan, which defines the key objectives of waste management and proposes methods of how to raise the efficiency of waste treatment, for example through an improved waste separation, more effective utilization of packaging materials, collection of dangerous parts of the public waste, environment-friendly way of dangerous waste disposal and composting of biologically- degradable waste including the sludge from wastewater treatment plants with their material utilization preferred. • The unsolved environmental burdens date back namely to former industrial production and/or represent the remains of finished mineral mining activities or the dumping sites pending recultivation. • The public awareness of environmental issues, environmental education and sustainability is still on a relatively low level. The local sphere of environmental education and training belongs to the best developed ones within the whole Czech Republic. The level of involvement of citizens in decision-making processes is low as well as their overall responsibility for the natural environment protection. • The original traditions of the region have been suppressed and the region’s typical face has been deformed by implementation of inappropriate architectural styles, small buildings of folk

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architecture were devastated and green vegetation was missing in urban settlements. In general the diversity got reduced, which also affected the environmental stability and balance of the landscape. • The “Sustainability Strategy“ has been processed for the Liberec-Region. This strategic document significantly contributes to raising the environmental awareness of the population and gradual implementation of the sustainability principles.

In order to improve the natural environment of the Northeast Region, especially the following items need to receive support in the coming period: • Taking advantage of environment-friendly production technologies • Exploitation of renewable power resources across all spheres • Exploitation of alternative fuels for the traffic • Reducing the region’s power demands • Reducing the amount of harmful emissions discharged into air by small, medium and mobile pollution sources • Improving quality of surface and underground water, erection of wastewater treatment plants and sewerage • Improving conceptual landscape protection, namely by means of erosion-control and flood- control measures and landscape revitalization and water resources protection • Improving landscape protection and its biodiversity • Removing obsolete environmental burdens and preventing from generation of new ones • Effective waste treatment, increasing volume of separated waste, recycling the waste for the purpose of its further utilization • Noise pollution reduction, anti-noise barriers erection • Solving unsatisfactory transit routes leading through towns and villages now, construction of by-passes, highways and expressways • Environmental accidents and risks prevention • Raising environmental awareness and education of population • Compiling the Sustainability strategy for the Pardubice and Hradec-Králové Regions including other high-quality planning backgrounds

4.7 Traffic and technical infrastructure, housing

4.7.A Traffic

4.7.A.1 Road network In connection with the residential structure, there is a total of 9 769 km of roads in the Northeast Cohesion Region, our of which two thirds fall on the 3rd class roads, almost one fourth falls on the 2nd class roads and over 12% remains for the 1st class roads including expressways. The region’s road network density is 0.79 km/km2 and is slightly in excess of the nation-wide average value (0.70 km/km2). Key issue for the traffic infrastructure of the Northeast Cohesion Region is the several-year long delay of construction of roads of the European importance, triggering an almost permanent overloading of existing roads of namely the 1st and the 2nd class as a result of the several fold increase in road traffic in the 1990´s.The unsatisfying situation in the traffic in the region demands fast increase in the capacity of the main transit ways by continuous construction of the highway D11 (Praha – Poděbrady – Hradec Králové – Jaroměř) and linking expressway R11 (Jaroměř – Trutnov – state border with Poland: Královec/Lubawka). It also applies to expressway R35 (Liberec – Turnov – Hradec Králové – Moravská Třebová – Olomouc – Lipník nad Bečvou). The highway D11 was recently put into usage in Libišany, however, its connection to Hradec Králové and continuity to Jaroměř is still absent, the purchase of land and problems with financing hinder the further constructions. The linking segment of expressway R35 to Opatovice, which will connect Pardubice to the higher class road network is currently under construction. Among the roads facing the highest load in the Hradec-Králové Region there are I/33 and I/11, which form a part of the European route E67, and the road I/16 (Řevničov – Mělník – Mladá Boleslav – Jičín – Trutnov – Poland), which is used for traffic connection to the Krkonoše area. In the Pradubice-

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Region the heaviest traffic is observed on the I/2, I/35 and I/37 roads (Trutnov – Jaroměř – Hradec Králové – Chrudim – Velká Bíteš). In the Liberec-Region the busiest are the I/35, I/65 (Hodkovice – Jablonec nad Nisou), R35 and R10 roads, also the road I/9 in the direction of the Rumburk border crossing is receiving high load of truck transports. The busiest road stretches are used daily by 15- 25 000 of vehicles. The overloading of roads with traffic turns into higher accident numbers, traffic jams, deteriorating road condition and high maintenance demands. The deteriorated natural environment is partially resulting from transit truck traffic often routed through centres of towns and villages (for example by-pass roads are missing). The entire region struggles especially with the lack of funds for reconstruction and upgrading of the 2nd class roads and significant 3rd class roads and certain roads of local importance falling within the cognizance of regional governments, with the existing stretches of the above roads being in poor technical condition and lacking sufficient capacity properties and with the necessity of bringing the critical parts and spot defects to a level required by the respective standards. The main problem of the road infrastructure network is the fact that it is being refurbished in small stretches due only to the permanent lack of financial resources on the part of regional governments, who are responsible for the allocation of funds for that purpose. This problem then correlates with a lack of financial resources for investments in key second and third class regional roads representing the regional trunk road network. This should suffice for eligibility for economic contributions by connecting the region to the TEN-T road network. In the next developmental period, it will be necessary to focus primarily on the reconstruction or upgrading of this road network, or adding into this road network which connects the region to the TEN-T road network. This will consequently lead to changes in its technical parameters and therefore to minimizing the negative influence of traffic upon the natural environment and the safety of road network users.

Picture No 8: Main road network in the Northeast Cohesion Region

Regional towns

District towns

The ORP centres

Expressways

1st class roads 2nd class roads

NUTS 2 border Regions

Source: GIS2006

Implementation of intelligent traffic systems (telematics) and services represents a significant part of the road traffic sphere, main benefit of which is the increased traffic safety. Namely the regions´ capital towns suffer from traffic jams and excessive environmental pollution as a result of highly increased road traffic. Development of telematic systems provides an insufficient response to the traffic development and its increase. Investments in raising the capacity properties, fluency and safety of the traffic in large residential areas through modelling of changes to the way the traffic system is organized and through implementation of information guiding systems are necessary. Insufficient financial support of telematic applications from the regional public sector means then that the public

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transportation system’s quality cannot be improved and cannot become more attractive for those passengers who would prefer it to individual car transportation. This contributes towards an opposite effect representing the main problem for the densely populated areas of the region.

4.7.A.2 Railway network The railway network in the Northeast Cohesion Region (Picture No 7) including its main transport axes covers the decisive transport directions, therefore it is not supposed to be extended in the future, rather the refurbishment and upgrading of the main stretches are being pondered. At the moment its total length is 1.667 km and its density 0.13 km/km2 slightly exceeds the nation-wide average value. A big progress has been made when the 1st corridor and deviated line of the 2nd corridor were built in the south part of the region and in the Pardubice-Region. The Hradec-Králové Region has an obsolete network where only part of it is electrified and suitable for a relatively comfortable passenger transport. In the north part of the region represented by the Liberec-Region the condition of the railway network is the worst in terms of the whole Czech Republic.

Picture No 7: Railway network in the Northeast Cohesion Region

Regional towns

District towns

The ROP centres

Electrified line

Categories of railway lines Corridor

Nation-wide

Regional

NUTS 2 border Regions

Source: GIS2006

The quality of railway traffic is to a large extent influenced by the condition of the railway infrastructure. Technical condition and parameters of many railway lines of the region do not correspond to the public transport demands now and so much the more in the future. The existing railway network was practically commissioned as early as the second half of the 19th century in a considerably broken country. Parameters and technical condition of most railway lines (numerous small-radius curves except for flat areas, insufficient bearing resistance of the substructure, dilapidated railway superstructure, insufficient throughput of certain stretches etc.) allow for low transport speed only thanks to obsoleteness and structural design of railway lines. It means that the regional railway transport is less competitive compared with road transport, which contributes to the already enormous load faced by the main routes of the regional road network. Such a situation helps further increase the individual car traffic, reduction of which has been marked as one of the principal EU traffic challenges. An obsolete railway carriage fleet and long travel times considerably reduce the competitiveness of the railway transport compared with road transport. In order to improve the current situation the necessary investments need to be put in upgrades of existing railway lines and/or commissioning of new stretches. As a key issue of the region is then seen the need to upgrade both the railway and

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associated infrastructure including renovation and upgrade of the railway carriage fleet. What is often understood under the term of railway telematics are the information and booking systems, however the key role of the up-to-date railway technologies is to furnish uniform technical solutions, technologies, operating conditions, border regimes etc., making a trouble-free transportation of goods and passengers all over the Europe possible. Financial support of telematic applications as received also from the regional public sector is insufficient and therefore cannot ensure both the uniform standard of services provided to customer and increased competitiveness of the railway transport commodities in comparison with the road transport.

4.7.A.3 Combined traffic Based on background documents available the combined traffic system (KD) is not developed in the Northeast Cohesion Region – the railway destinations of the region are not covered in the existing nor in the developing trans-European and super regional train networks. Main reasons behind this situation are the traffic corridors routings and nonexistent logistics centres focused mainly on commodities and services suitable for the combined traffic. Thanks to their character (throughput, structure clearance etc.) the following main traffic routes rank among those suitable for combined traffic: the 1st railway corridor, the currently built D11 highway, the R10 expressway (Prague-Liberec) and the Labe river classified as an international water route. As far as the connection to the neighbouring regions is concerned a significant meaning will have the fulfilment of the CETC (Central-European Traffic Corridor) international initiative, objective of which is to establish an interconnection of the north and the south of Europe through a multimode traffic corridor in terms of the TEN-T scheme. The railway corridor should follow the CE-59 route. A positive influence on the combined traffic development in the Northeast Cohesion Region can be expected to occur upon completion of the navigability of the Labe river as the town of Pardubice and the associated logistics centre, part of which will also be a port.

4.7.A.4 Other types of traffic Air traffic There is a number of airports in the Northeast Cohesion Region. The most important one is the international public airport in the town of Pardubice, which is one of the five strategic airports of the Czech Republic and holds the civil airport status. It is preferred because of its convenient geographical location in the heart of the Czech Republic and can be used as an alternate airport for the airports of Prague, Brno and Ostrava. The number of passengers who used services of this airport has increased from 6 000 to almost 47 000 over the recent 5 years. The meaning of the Pardubice airport will grow in line with development of the towns of Hradec-Králové, Pardubice and Chrudim into a functional agglomeration (current population of 250 000). The airport in the town of Hradec Králové has so far been granted the non-public international airport status and the Liberec airport’s public international airport status was put on hold due to its unsatisfactory technical condition. Despite the air traffic being the fastest way of transport for namely the business passengers, the existing airport and associated infrastructure including the traffic infrastructure needs to get upgraded to make the connection with individual European regions more effective.

Water traffic The NUTS II Northeast Region is connected to the European water routes through the Labe river, which is a stream of an international meaning. The Labe river has been included in the trans- European water routes network of the E category under the AGN agreement (E20 trunk route the North Sea – Hamburg - Ústí nad Labem - Mělník – Pardubice). However, the proper utilization of this transport route may begin only when the navigability of a 23km-long stretch of the Labe river from Chvaletice to Pardubice is ensured. Another preconditions for the proper utilization of this water route is the subsequent construction of the Pardubice port along with the connected multimode logistics centre (MLC), which will offer the advantageous combinations of water-railway, water-road and water- airplane transport systems. Nevertheless, financial resources also need to be allocated to the upgrade of the Chvaletice port and expensive measures aimed at ensuring the nature and landscape preservation and environmental protection will need to be adopted too. The needs of this scheme are supported by the strategies for development of the combined traffic and water routes of the Czech Republic. These strategies stem from the performed analyses and marketing studies focused on several areas, which prove importance of this scheme for area falling under the Hradec Králové-

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Pardubice agglomeration including larger dependent territory located in the Northeast, East and South-East Moravia.

Public transport After 1990 the public transport’s performance involving both buses and trains sank as a result of an intense growth of the individual car transport. On the unprofitability accounts there have been series of connections cancelled or limited, which influenced mainly the population living in smaller villages and towns situated off the main traffic routes as well as those living in the region’s limits, involving the rural mountain areas and areas close to mountains. The responsibility for traffic serviceability in respective territories has been held by the individual Regional authorities since their foundation in the year 2003. Year by year they spend considerable funds on covering financial loss from public transport, so that the basic level of traffic serviceability is ensured for every municipality. Currently, there have been observed certain improvements in this sphere, despite the existing general non-uniformity of the service and insufficient coverage of the farthest municipalities on one hand and on the other hand the overlaps of bus and railway network resulting from their insufficient integration. A significant position in the sphere of public transport has long been held by municipal transportation and of growing importance is also the so-called Integrated transport system (IDS), which combines different means of transportation (train– bus – means of municipal transportation). In 2002 the transport companies of the towns of Hradec Králové and Pardubice, the Czech Railways (ČD) and the bus transport service provider ORLOBUS Nové Město nad Metují entered into an agreement, based on which the Integrated transport system “VYDIS“ was launched to increase the population mobility towards superior urban and business infrastructure (main axis Chrudim – Pardubice – Hradec Králové – Jaroměř) and at the same time also to form a more environment-friendly and competitive alternative to the individual car transport. Initial steps towards development of the integrated transportation system have already been made in the Liberec-Region too, with its future shape being derived from the Regiotram Nisa scheme in particular (Liberec – Jablonec n. N. – Poland – Germany). The insufficient coverage of the whole region by the IDS is considered as the main issue, since the necessary precondition for successful development of both integrated transportation systems are large investments in railway traffic route upgrades and in gradual renewal and structural change of the fleet of vehicles used for the public road and railway transport. The integrated transportation system VYDIS has among other things proved the insufficient capacity and obsolete condition of the railway infrastructure, which appears to be the limiting factor in terms of the possible exploitation of the Hradec-Pardubice agglomeration’s potential. This represents a significant problem for the region, solution of which can be ensured by means of implementation of large traffic infrastructure schemes (e.g. the railway transport) focused on connection of the sole towns´ centres of Hradec Králové – Pardubice - Chrudim, which is supposed to result in a “merger“ of the local labour markets and activation of many agglomeration-related advantages. Similar schemes have been pondered for example among the towns of Olomouc, Přerov and Prostějov.

Cycling A significant attention has been paid to designing, building and marking of bike paths of regional and super regional meaning with respect to the development and soaring popularity of cycling and bicycle tourism in the recent years. A trunk bike path has been designed in the NUTS II Northeast Region, upon completion of which the recreation areas of both the Czech Republic and the neighbouring countries will be connected. Bike paths form a separate element of the bicycle transportation. They consist of separate roads reserved for cycling. They are usually lead in parallel with roads faced with an excessive motor-vehicle traffic and hence not suitable or even dangerous for cyclists. In terms of the region’s road network there are stretches of roads in towns and urban areas especially with lots of traffic accidents and the infrastructure for cyclists and pedestrians is not furnished in a sufficient way. More intense motor- vehicle traffic thus complicates the development of both the recreational cycling and the common cycling used for the daily commuting to work.

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4.7.B Technical infrastructure

4.7.B.1 Electric power supply The ČEZ Distribuce a.s. company (former Východočeská energetika, a. s., Hradec Králové and Severočeská energetika, a. s., Děčín) operates the power distribution system in the territory of the Northeast Cohesion Region. Electric power supply is well secured not only from the viewpoint of the current consumption but also with respect to the future demand. The power companies continuously renew the distribution system being built since 1952, where number of power lines reach the end of their lifetime. As it has been highlighted within the CSG, this sphere can receive funds only in the event of a market failure. The market is failing in the sphere of alternative power resources especially, which stands as a large topic for the structural funds. Low utilization of alternative power resources and their small percentage share in total amount of power supplied to the region represents a key problem for the region due to the economic unprofitability of such plants. There are several water power stations in the Northeast Cohesion Region, the three biggest ones are situated in the Pardubice-Region (the Práčov and the Seč water power stations built on the Chrudimka river and the Pastviny I on the Divoká Orlice). In the region there are also 3 wind power stations situated in Jindřichovice pod Smrkem and in Chrastava (the Liberec-Region) and in Nový Hrádek (the Hradec-Králové Region), which are, however, of a local meaning similarly to the most water power stations.

4.7.B.2 Heat supply Heat supply of towns and villages of the region is provided according to availability of individual types of generated power – local heating devices or small sources of central and level heating, mostly gas- operated medium and high performance heat sources. In the region there are also several big systems of centralized heat supply (CZT) operated. Larger interventions are requested in connection with two big CZT systems in Trutnov and its surroundings and in Dvůr Králové nad Labem. From the perspective of fuel consumption and heat generated by the source the CZT Trutnov system represents almost a half of the total amount of heat produced by big sources in the whole Hradec-Králové Region. Several primary heat sources sections and one existing source of this system call for refurbishment, though. The CZT system in Dvůr Králové nad Labem needs refurbishment of both the source and the primary heat distribution pipes. The high power demand of properties and namely of industrial production and low exploitation of renewable power resources represent key issues for the region. The natural environment and air quality are both deteriorating as a result of non-renewable fossil fuels combustion. Reduced consumption of primary fuels in the region can be achieved through conversion of gas-heating plants into heating plants featuring combined heat and power generation (through installation of gas- consuming combined heat and power units) and replacement of electricity-powered heating sources and electric heat storage sources with heat pumps. This topic can attract financial resources only if the market is “failing“, which is the case of small rural areas in particular.

4.7.B.3 Gas supply Natural gas supply is well secured in most areas of the Northeast Cohesion Region not only from the viewpoint of the current consumption but also with respect to the future demand. Over 86% of the population in the area in question is living in towns and villages already connected to gas mains. Lower number of gas supplied entities has however been noticed in the areas of Rychnov, Kopidlno and Libáň in the Hradec-Králové Region and in some parts of the Ústí nad Orlicí region and the Svitavy region. The connection of towns and villages in the Liberec-Region to the gas supply system has practically been completed and further massive spreading of gas connections to smaller towns and villages is not under consideration because of economic reasons. Besides the technical-economical demandingness of gas supply pipes erection in sparsely populated areas, for example in the area of the Orlické mountains, also the low interest of people in getting connected to gas supply influenced by high gas price and its further growth compared with coal price remains to be an essential problem for further development of gas connections in urban areas. Even the phenomena of receiving requests for gas heating disconnection has been registered in some towns and villages of the region, where people have begun to return to combustion of fossil non- renewable fuels or exceptionally also dangerous materials (PET bottles etc.) Therefore the biomass combustion shall be considered as an alternative to natural gas for some localities.

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4.7.B.4 Water supply and sewerage systems The Northeast Cohesion Region is fully self-sufficient when it comes to sources of high-quality drinking water obtained from both surface and underground reservoirs and has relatively developed public water supply system. If compared with the average value for the Czech Republic the region shows a high percentage of towns and villages connected to public water-supply network and slightly lower percentage of population connected to public water-supply network. If compared by districts of the region the Jičín district has markedly lower number of connected urban areas as well as the number of connected population. In the sphere of waste water collection and treatment the region as such lags behind the national average number of both the municipalities and population connected to public sewerage system terminated by waste water treatment plant. This fact represents a key issue for the entire region, for it ranks the region among those territories with the lowest number of public sewerage systems and waste water treatment plants. Sewerage system equipped with waste water treatment plant can be found in almost one fourth of towns and villages where 60% of the population live, which is 10% less than the national average value. An unsatisfactory position of the region is determined by a high number of residential units with population of max. 1000 inhabitants not connected to appropriate sewerage systems. There are considerable differences among individual areas within the region concerning the index number of residents connected to sewerage. This issue mainly concerns small rural areas – the lowest number of connected municipalities (10.8 %) has been reported from the Jičín district and the lowest number of connected population (40.7 %) falls on the Semily district.

4.7.B.5 Information and Communication technologies Cell phones, computers, internet and other information and communication technologies have become an essential part of daily life of the society and their importance has been constantly increasing. Based on statistical survey conducted with interviewed individuals aged 15 and more, the cell phone is the most wide-spread technology used by approximately 70% of the mentioned population group within the Northeast Cohesion Region. Based on findings concerning exploitation of information and communication technologies by households and individuals in 2003 and 2004 provided by the Czech Statistical Office, the use of such technologies has been growing permanently in the Northeast Cohesion Region (the highest percentage increase was reported from the Pardubice-Region), yet its position is still slightly under the Czech Republic’s average value. Almost half of the population aged 15 and more have at least a small personal experience with personal computer, whereas the highest annual increase within the three regions of the Northeast Region has been reported from the Hradec- Králové Region. In terms of these three regions this one holds the top position when it comes to the number of households equipped with PC and connected to the Internet – based on survey into high- speed internet access exploitation conducted in 2004 it was on the second position with its 7% of households connected falling behind Prague with 13%. In the Liberec and the Pardubice-Regions there were only 3% of households with high-speed internet access (national average is 5%). Table providing the comparison of individual regions including comparison with the nation-wide average figures is presented in the appendix part of this document. The national policy on high-speed internet (broadband) access lays emphasis on the government support of the online services development namely within the spheres of education, culture, health service and State administration and identifies the main causes behind the slow broadband connection development in the Czech Republic. To such causes belong an insufficient availability of the high-speed connection outside large urban areas in particular, an unfavourable ratio of price to the population’s purchase power, low quality services being offered often without guarantee, an insufficient offer of services and web page contents and the resulting insufficient motivation of users to decide for a high-speed internet access. This topic concerns the small urban and rural areas of the Northeast Cohesion Region in particular, for establishment of the so-called information society based on global information exchange and electronic communication in various spheres of services (voice, data, text, multimedia) represents one of the important means for introduction of more competitive and dynamic knowledge-based economy capable of sustainability and offering more and better jobs and reinforced social coherence. Providing the high-speed internet access not only to public and businesses but also to households is a prerequisite for such a communication. The above-described issues identify the needs of the whole Northeast Cohesion Region with respect to this topic.

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4.7.C Housing

Size of the housing resources involving houses and apartments has been growing constantly in the region (stock of houses grew by approximately 5% from 1991 to 2001 and stock of apartments by 8% in the same period), nevertheless the number of permanently inhabited houses and apartments is falling down (in case of houses by 2.7%, and by 3.3% in case of apartments). Larger urban units are attractive for the bulk housing construction, while the flats in family houses occur more in smaller towns and villages thanks to individual house-raising activities. An interest in living in recreation houses in attractive mountain resorts is on the increase. In general, the quality of housing resources from the perspective of its technical characteristics (sewerage connection, water supply system connection, gas connection and central heating system) is lower if compared with the average values of the Czech Republic. In general, houses situated in larger towns have better technical characteristics, less favourable situation is observed in rural communities. The average age of permanently inhabited houses in the Northeast Region (49 years) is higher than the national average value (46.9 years). Measured by this parameter the Liberec-Region ranks among the worst regions in the Czech Republic. In this region the average age of houses is slightly below 55 years. Large boom of the post-war construction is typical namely for the central parts of the region, on the contrary the border areas of the former “Sudeten“ saw a significant decrease in population number after the German residents had been driven out and a need for new housing development was not considered to be that important. The average age of houses located mainly in larger urban areas is influenced by the development of apartment houses built from reinforced-concrete panel blocks back in the second half of the 20th century.

4.7.C.1 Apartment houses built from reinforced-concrete panel blocks The deteriorating apartment houses built from reinforced-concrete panel blocks built in 1960-1980 represent a considerable issue for the whole Czech Republic (the houses built from 1971 to 1980 are concerned in particular). In the Czech Republic there were built approx. 80 000 of such houses, which represents approximately 1.2 million of apartments. This number accounts for 34 % of the Czech Republic’s housing resources. In the Northeast Cohesion Region there were 135 255 of flats in these “prefab“ houses as of 2001, which represented 24.6 % of the total stock of flats. There were 344 075 of inhabitants living there (23.4 % of the total region’s population).

Picture No 10: Proportion of population by type of their habitation in regions of the Northeast Cohesion Region in 2001

100 %

80 %

Living in detached houses 60 % Living in houses of other type 40 Living in “prefab” type % of houses

20 %

0% KH LK PK NUTS II K SV Source: The Czech Statistical Office (SLDB 2001)

The Czech Republic’s average number of population living in apartment houses built from reinforced- concrete panel blocks is markedly exceeded in the Česká Lípa district (42 582 – 41 %), followed by Liberec (58 374 – 37 %) and Jablonec nad Nisou (30 845 – 36 %). Other districts are below the national average value, the lowest number of population living in houses of this type was in the districts of Semily (10 844 – 14 %), Jičín (10 955 – 13 %) and Svitavy (12 398 - 12 %) in 2001. In

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general, the higher proportion of the “prefab“ houses in the stock of apartments is seen in more urbanized areas. The demographic development observed on housing estates since the beginning of the 1990s mostly intensifies the trends faced by the towns as such. From 1991 to 2001 towns have seen smaller decrease in population numbers than most of the housing estates located in these towns. For example in the town of Hradec Králové the population number fell by 2.76 %, however, on the housing estates of Hradec Králové the decline reached 3.13 %. Compared to the general decrease in population the number of economically-active households was growing namely in result of the decreasing average household’s size (in Hradec Králové from 2.58 to 2.33 persons, on housing estates of Hradec Králové from 2.56 to 2.26 persons; in Pardubice from 2.56 to 2.31 persons and on housing estates of Pardubice from 2.50 to 2.24 persons etc.). The intensity of population ageing has become differentiated by the age of individual housing estates – housing estates receiving their inhabitants in 1950s and 1960s grew older much slower than the housing estates of 1970s and 1980s. The retired population number in Hradec Králové, Pardubice and other regional centres increased mostly 2.1 to 2.3 times, on housing estates the average increase was by 2.0 to 2.4 times. The demographic changes on housing estates of 1970s and 1980s were characterized by mergers of these housing estates with their parent towns (housing estates were subjected to much more dynamic process of changes than the entire towns); from the demographic point of view the older housing estates changed in a slower pace compared to other parts of towns.

Picture No 11: Proportion of “prefab“ apartment houses inhabitants by districts of the Northeast Cohesion Region

Border of regions

IPopulation living in „panel“ - type apartment houses

Less than 15%

More thab 30%

Source: The Czech Statistical Office (SLDB 2001)

Although the catastrophic forecasts of physical dilapidation of housing estates have not come true (number of these housing estates have exceeded their planned life-time already), major part of the “prefab“ houses built in late 1950s is currently in a relatively poor condition. Among the most significant defects of the “prefab“ houses are the broken cladding or damaged internal structure. The most frequent causes of the mentioned defects are assembly and design mistakes accounting together for almost 70 % of defect causes. Other causes involve inappropriate house exploitation, house age and neglected maintenance. The nature of the most frequent defects and their causes in the Northeast Cohesion Region is similar to the nature of the most frequent defects and their causes observed in the rest of the Czech Republic.

Table No 11: Most often causes of defects of “prefab“ structures in the Czech Republic in 2004 Assembly mistakes 37 % Design mistakes 29 % Inappropriate house exploitation 18 % House age and neglected 16 % maintenance

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Source: The Czech Statistical Office

Contrary to other houses built under different technologies the “prefab“ houses maintenance is more demanding and calls for specific repair methods. The economic heating methods and sealing of leaks during the installation of thermal insulation trigger mould occurrence and corrosion risk. The fact that there is no massive devastation as it is known from the examples of the low-cost houses built in western countries and newly also in some countries of the former Eastern Block tends more to be the result of combination of (hopefully) lower number of built-in structural defects, still acceptable maintenance level and not very economic way of exploitation, where for example an excessive heating prevents from condensation of moisture on structural parts. In the near future the “prefab“ housing estates will call for processing of comprehensive redevelopment schemes to be followed by subsequent extensive refurbishment. Cost to be generated in connection with the comprehensive refurbishment have been forecasted to range from 250 to 400 000 CZK per a single apartment. The lack of capital on the part of all types of owners of houses on housing estates represents an obstacle to the mentioned refurbishment and therefore the supporting programs are needed here. An insufficient attention paid to housing estates refurbishment may lead to their further physical dilapidation and abandonment of their less-attractive parts by their inhabitants or an increased presence and concentration of socially-problematic groups of people in these localities.

4.8 Regional development and State administration

4.8.A Regional disparities – analysis of sub areas falling under the ORP

For assessment of regional disparities in the NUTS II Northeast Cohesion Region the segmentation by sub-areas of municipalities with extended powers was chosen, for such units (despite a number of problematic items concerning definition, size, internal and external relations etc.) reflect the differences in economic level of individual parts of the area in question better than the former districts. Since the collection of certain data of namely an economic character (for example the GDP is monitored to the regional level only) is difficult or impossible, we decided to base the assessment on a selection of several geographic and economic indicators assigned with different weights depending on significance of the phenomenon monitored and its influence on the social-economic development and scored positive and negative deviation from the average value of the Northeast Cohesion Region. Selected indicators are highlighted in colours in the assessment table’s header. Selected indicators: • Population density (in pop./ km2 in 2004) – weight 0,5 • Population increase between the recent two population censuses (1991-2001) – weight 0,5 • Jobs occupied (PP) per 1000 economically-active inhabitants of respective sub-area (SLDB 2001) – weight 1 • Registered rate of unemployment as of 31.12. 2004 (under the old methodology) – weight 2 • Proportion of university-degree holders to the total population of age 15 and more (SLDB 2001) – weight 2 • Number of natural persons – entrepreneurs per 1000 inhabitants of respective sub-area (as of December 31, 2004) – weight 2

As per the deviation from the region’s average value the individual ORP were scored within the range from minus 5 to plus 5 points and modified by the weights assigned (to reflect the impact of specific indicators on the economic development of the area) and according to the final score the sub areas of ORP were split into several categories ranging from “very problematic“ to “prosperous“. Among “very problematic“ and “problematic“ regions have been included such sub areas of municipalities with extended powers, which are sparsely populated and face high unemployment, low offer of vacant jobs and have population with low level of education and low business activity. Besides such “peripheral“ regions like e.g. the area of Moravská Třebová, Frýdlant, Králicko or Broumov this category also embraced regions located close to big towns where a lot of people commutes to work – e.g. Přelouč and Nový Bydžov. These ORP, however, take advantage of better microeconomic situation thanks to being close to big and strong centres where availability of job opportunities is far better than in “peripheral“ regions and in such case it would be more suitable to use one-step -higher ranking, i.e. “below the average“ category.

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To “prosperous“ regions logically belong the densely populated agglomerations of district towns but also certain other regions with favourable geographic position and high-quality offer of job opportunities, low rate of unemployment and population with higher level of education (e.g. ORP Turnov). Assessment of several selected indicators cannot, of course, provide a totally comprehensive overview of social-economic situation in particular area (a comprehensive multi-criterion analysis would obviously have necessitated higher number of indicators from several spheres to be included), yet the information on economic level of the area in question is relevant enough. As another problem stands the fact that the comparability of the individual ORP sub areas is difficult due to essential differences in their size and population figures (e.g. the largest ORP sub area in the Liberec-Region - Česká Lípa – is 10 times bigger than the Železný Brod being the smallest sub-area; similar differences can be found in population figures – which holds true for other regions too).

Picture No 12: ORP sub-areas within the Northeast Cohesion Region structured by economic welfare

Borders of regions

Administrative districts of the ROP

very problematic

problematic

below average

average

above average

prosperous

Source ČSÚ 2005 The suggested assessment method represents only one of the possible approaches to identification of territorial disparities. The suggested algorithm stems from multi-criterion analysis of selected indicators with allocated weights, rating of which was based on empirical experience of the processing team. Nevertheless it cannot be considered as a comprehensive assessment of the NUTS II Northeast Region on which a potential decision on where to focus an increased support would be based.

4.8.B Characteristic of the “problematic“ (economically low-performing) regions

The Moravská Třebová is the worst ORP sub area in the Pardubice-Region from the perspective of labour market situation. The registered unemployment rate exceeds more than twice the average value for the Northeast Cohesion Region and also the long-term unemployment is significantly above average. Based on population census there were 28% of people aged 15 and more with a basic or an unfinished basic education in the year 2001, which represented the second highest number in the Pardubice-Region (after the Kralicko area). Regarding economic sectors of employment, the number of economically-active population working in the service industry lies considerably under the average. The region suffers from recession in the traditional manufacturing industries, namely involving the textile industry and its big distance from strong economic centres (Pardubice, Hradec Králové, Olomouc) plays a very unfavourable role in terms of its impact on economic situation and investment potential. This region’s perspectives will be significantly influenced upon completion of the basic traffic structure represented by the R 35 and R 43 expressways, which shall encourage the investors´ interest in allocation of new investments in this so far peripheral region.

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The Frýdlant sub-area of the municipality with extended powers is located in the northernmost part of the Liberec-Region called the Frýdlant headland with its three sides being surrounded by the Polish territory. It belongs to the most undeveloped areas with the highest unemployment rate in the Liberec- Region. Causes of such condition may be found in poor traffic access to the inland (area is separated by the crests of the Jizerské mountains), poor condition of technical infrastructure, unfavourable historically-conditioned economic structure (agriculture, textile industry etc.), relatively low number of educated and socially stable population. The “opening of borders“ towards Poland and Germany after adoption of the Schengen treaty and the related increase in population’s mobility and area’s attractiveness for investors may significantly improve the social-economic situation of the Frýdlant area. New forms of tourism and exploitation of uncultivated land for e.g. biomass and bio fuel production represent significant opportunities too.

Similar situation to that of the Frýdlant area can be also seen in other peripheral areas located on the Czech-Polish border, i.e. in the Broumov and Kralicko areas (poor traffic accessibility, low-educated population, recession in the textile industry …), but also in the inland areas affected by restructuring of their industry. Another cluster of the so-called “problem“ areas involves ORP sub areas located in the immediate vicinity of big towns (ORP Přelouč, ORP Nový Bydžov) with low job offer and high number of population commuting to places of their employment being located outside the region, mainly in Pardubice or Hradec Králové respectively. (Negative rating of these regions is caused namely by low proportion of job occupation related to the number of economically-active population, which is compensated, however, through the offer of jobs in the regional capital towns located nearby. These regions are classified as the below-average regions owing to their overall microeconomic situation).

Besides the Frýdlant area there are another 5 territories in the Liberec-Region being categorized as economically-low performing areas; through their integration with larger entities (ORP), however, these micro regional disparities dissolve and having achieved better score the ORP sub areas have been put in better categories (it concerns e.g. the economically-low performing areas called “Podralsko“, “Západní Českolipsko“ and “Hrádecko-Chrastavsko“).

Reduction of regional disparities or equalization of differences in social-economic level of individual regions within the NUTS II Northeast Region respectively, will take a long time. Regional policy must be focused on both the expansion of the so-called “development poles“ (getting the economically-low performing areas connected with prosperous regions through e.g. improved infrastructure, traffic accessibility, support given to higher education levels with a view to secure a qualified population in the region) and the targeted support given to selected problem areas (business, putting the scientific findings and results in practice, development of appropriate forms of tourism and of course, refurbishment and development of technical and traffic infrastructure).

4.8.C Problems of the urban and rural areas

Problems of bigger towns as well as rural areas in the Northeast Cohesion Region can be characterized in a general manner, for the frequently-discussed topics are concerning the most of Czech towns and rural areas. Towns11 offer generally higher living standard and represent the administrative, cultural and civic centres of the region. As a result of concentrated urban functions the population of towns shows better employment in the tertiary and the quarterly sectors and better level of education. Age structure of the population is usually unfavourable, the elderly represent the majority. This situation is deteriorating further as a result of the demographic development of population living in towns that are slightly profitable mostly because of the positive migration balance (recently there has been a decrease in population figures observed as a result of moving out to satellite residential zones located in the vicinity of big towns). A potential threat conditioned by the urban environment is the higher occurrence of social-pathological phenomena (drugs, crime rate…). The towns also provide a higher standard of habitation, measured by the equipment level and age of houses, however, the average floor area per person is lower compared to apartments in rural areas.

11 There exist many definitions of urban and rural areas. Under the ROP NUTS II NorthEast the following areas are considered to be urban areas : agglomerations of regional and former district towns, other towns with population over approx. 5000 and urbanized areas formed by interconnection of continuous residential areas consisting of several smaller towns (e.g. Tanvald - Smržovka – Desná)

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As far as the environmental quality of life is concerned, the towns are being regarded as problematic. In towns there is a high pollution of the living environment, higher emission load (recently the NOx production in particular is on the increase due to the growing intensity of individual transportation), higher noise and dust concentrations, higher production of public waste. Towns have problems with heavy traffic (insufficient traffic infrastructure, existing roads being overloaded, missing municipal by- pass roads, missing parking lots, reduced volume of public transportation due to growing cost in connection with price equalization of the MHD…). Owing to higher population density and higher amount of built-up area the number of urban green areas per inhabitant is lower. The urban pattern and town value is sometimes affected by presence of unexploited premises of mostly industrial kind (so-called “brownfields“ – among the most important ones in the Northeast Region rank the deserted textile factories, tanneries, glass works…) and by deteriorating monuments of cultural-historical meaning or by other private properties. The most significant problems of urbanized areas can briefly be defined as follows: 1. Overloaded traffic infrastructure influencing the natural environment in a negative manner (noise, emissions) 2. Lack of green areas and areas used by population for daily recreation (relaxation) 3. Wider presence of social-pathological phenomena as a result of higher level of anonymity provided, high number of population lacking social wealth and ability to adapt themselves and its concentration to certain localities 4. Presence of unexploited premises of mostly industrial kind (so-called brownfields) as a result of economic transformation and restructuring of industry

Rural areas in the Northeast Cohesion Region are characterized by their disintegrated residential pattern12 and large number of small municipalities. A gradual decrease in population figures has been observed in rural areas mainly as a result of migration-related losses. This problem does not concern areas in vicinity of big towns, where a so-called “suburbanization“ process has been in progress since 1990s (satellite residential areas are being founded with good access to big towns and thanks to lower land price they offer habitats of higher quality than those located in towns). The rural areas used for recreation purposes are becoming more attractive too. The residents of small municipalities except for the above-mentioned areas (suburbs, recreation areas) have higher job possession in the primary sector. Lack of jobs and limited job-related mobility (problematic traffic serviceability and high cost of job-related commuting with respect to income and currently valid “social network“ parameters) are the causes of higher unemployment rate. In certain rural regions (located namely near the state border) there is a lack of stable businesses; the regions do not look attractive enough for new investors (see the characteristic of the “problematic“ regions). The ongoing selective migration from peripheral rural areas (involving both more-educated population and economically-active population, which causes a gradual deterioration of human resources quality and other negative synergistic effects) represents a considerable issue. Quality of services provided and their accessibility is lower and the offer of leisure time activities is not rich enough. Housing construction in small municipalities is of a low intensity and is mainly limited to the construction of family houses. Municipal stock of houses is old with technical equipment of poor quality. Technical infrastructure is not always on the necessary level, low degree of waste water treatment in some localities is also perceived as problematic, the small- to medium-sized sources of air pollution are remaining untreated, historical environmental burdens do exist as well as the unexploited (mainly agricultural) properties – so-called brownfields. All the above-presented factors influence investment activities and business development, therefore most of economically-active population has to commute to their place of employment. Job-related commuting, however, is markedly determined by the quality of traffic infrastructure and traffic serviceability, which has deteriorated considerably since 1989. The rural area in general offers higher quality of living in the nature, which, however, is being offset by lower availability of “services“ (in the broadest possible meaning) to its population with respect to their quantity and quality.

12 The disintegrated structure of residential pattern is translated into fragmentation of local public funds, which undermines the own investment capacity of small municipalities. They represent one of the key development sources in the peripheral rural areas. Disintegrated public funds do not allow for implementation of larger investment schemes with potentially significant development effect and limited funds in hands of small municipalities may also represent a key barrier preventing them from accessing the sources from structural funds.

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The most complicated situation is faced by rural regions located close to state border where the Germans lived prior to the WWII and where the lack of job opportunities caused by the impact of restructuring of agriculture and traditional manufacturing industry gets combined with low level of education, higher social exclusion of the population and relatively low respect for the environment. The most significant problems of rural areas can briefly be defined as follows: 1. High unemployment rate caused by recession in agriculture, low qualification and insufficient job-related mobility of the population, low number of business activities 2. Poor quality of the traffic serviceability 3. Insufficient and low-quality traffic and technical infrastructure, low level of civic amenities and services, older age and lower quality of the housing resources

Solution to the problematic situation of namely peripheral rural regions represents a combination of several measures, involving : 1. Targeted support of appropriate economic activities in rural areas (e.g. alternative agriculture focused on ecological bio products and/or growing the plants for electricity generation – biomass and bio fuels production, specific forms of tourism like biking, agricultural tourism and horse riding, etc.), 2. Support for the so-called “development poles“, i.e. areas eligible for strategic investments (in connection with completion of the traffic and technical infrastructure and infrastructure for human resources development) and essential improvement of the traffic serviceability, i.e. getting the “peripheral“ rural regions connected to the mentioned “development poles“. (Big towns do not need to be the only development poles. For example the influence of funds invested in production development of the Škoda automobile factory in Kvasiny on the whole region located in the foothill area of the Orlické mountains – the ORP Rychnov nad Kněžnou and Dobruška is visible already).

4.8.D Regions for Economic Change Initiative

On 8.11. 2006, the European Commission approved a new initiative for the 2007-2013 planning period entitled Regions for Economic Change within the framework of the Territorial Cooperation target. This represents a new approach to the development of regional and local associations and assists them in working more closely with the Commission, applying innovative approaches and fulfilling program goals under the Convergence, Regional Competitiveness and Employment, and European Territorial Cooperation targets. Under this initiative it will be possible in the 2007-2013 period to finance projects falling under the European Territorial Cooperation and Urbact target.

The goal of the Initiative is to exchange experience of good practice between European regions in the area of innovation and thereby also economic growth and higher employment (Lisbon Agenda). Cities and regions will be able to gather into associations concerned with certain themes determined by the European Commission (as, e.g., making Europe more attractive for investment and work, improving knowledge and innovation,...).

In the area of the Regions for Economic Change, the MA commits itself to: a) Undertake necessary measures to plug innovative operations related to the outcome of associations in which the region takes part into the general programming process. b) Allow the presence of a representative (as observer) at the associations in which the region is included as well as in the Monitoring Committee in order that they may report back on progress in association activities. c) Place on the Monitoring Committee's agenda at least once a year a report on the activities of the associations and discussions of particular points touching on the program. d) Provide information in the annual report about the implementation of regional activities included in the Regions for Economic Change Initiative.

4.9 Evaluation of the existing supporting programmes

Aim of this part of the analysis is to process a qualitative evaluation of the current program period from a regional perspective. Evaluation is based on evaluation schemes processed by the Community Support Frame section, annual reports for the years 2004 and 2005 processed by the secretariat of

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the NUTS II Northeast Regional Council, interviews with staff involved in the current implementing structure on regional level. It generalizes the results of questionnaire-based survey carried out in the Northeast Cohesion Region in February 2006.

4.9.A Regional government’s perspective

Existing system of regional development support in the Czech Republic is characterized first of all by existence of a large number of relatively small supporting programmes (from the perspective of their financial volume), through which funds are being allocated to regions. The Act No. 129/2000 Coll. On Regions in its § 35 section 2 letter d) defines the rights and obligations of the regions, which in order to reach the strategic objectives execute their own regional policy among other things also through their programmes. With respect to the financial possibilities of the structural funds for the period 2007 – 2013 and to the needed provision of the co-financing schemes there will be necessary to change this system in order to ensure that more funds are available from the budget of the Czech Republic.

4.9.B Evaluation of applications submitted

In the period of 2004 – 2006 the number of applications for a financial support from the Joint Regional Operational Programme significantly exceeds the available capacity of this programme (in three calls 197 individual schemes were submitted, out of which 77 were approved - i.e. 39%). Namely the following issues have been identified by the staff of the NUTS II Northeast Regional Council Secretariat: • Low quality of schemes submitted relating to low experience of the Applicants. • Incorrect focus of schemes was connected with the effort of Applicants to adapt their need to the focus of the given operational programme. • The consulted schemes´ quality differed significantly from those not consulted. • Focus of the operational programme’s individual measures (defined by recognizable activities) forced the Applicants to split their comprehensively-focused scheme involving also activities logically related to such schemes into several schemes. • As regards schemes of non-investment nature, representing mainly the human-resources- related types of schemes (Measure 3.2), it has been confirmed that such schemes are difficult from the perspective of coordination and communication and applicants are afraid that the defined results and outputs will not be achieved.

Each region had an opportunity to ask for 5 subsidy schemes in terms of the Joint Regional Operational Programme. There were 14 subsidy schemes approved for the Northeast Cohesion Region. In terms of the OP LZZ the regions applied for 1 subsidy scheme. Among main issues rank the following: • Unclear task specification and insufficient level of coordination provided by authorities during the preparation of the GS • Frequently changing information and insufficient access to information on changes relevant also to regions acting as subsidy providers. For example, the “number of beds“ indicator in terms of the measure number 4.2.2 had been changed just a few moments before the call was made, and was not subjected to evaluation in the 3rd round of the call. Many applicants who focused exactly on increasing the number of beds, however, had their schemes processed already. • Problem of insufficient coordination among all units within the implementing structure • Unclear competence of expenditures relating to both individual schemes and schemes within the GS framework.

The most important units within the implementing structure of the SROP on regional level are the S- RR NUTS II Northeast and the Regional Council of NUTS II Northeast. Head count of people working at the secretariat gradually grew to 4 during the year 2004 and 2005, work of the S-RR of the Pardubice-Region and the Liberec-Region is being performed by three persons per either of the mentioned regions. The IS MONIT function ranked among the main issues, which, however, were corrected on an operational basis. Partial problems also occurred in the sphere of communication among individual parts of the implementing structure. Regular meetings of the S-RR and ŘO managers contributed to their successful elimination. As a ascertain obstacle was perceived the lack

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of clarity in the Czech legislation, e.g. the issue of documentation of influence of a respective scheme on NATURA 2000 and EIA localities has been solved through release of the Instruction No. 3/2004 by the MŽP. The Act No. 40/2004 on Public Procurement came into force as from May 1, 2004 and its interpretation still causes certain misunderstandings namely in connection with entrepreneurs´ schemes.

4.9.C Applicants´ perspective

In terms of preparation of the Regional operational programme there was a questionnaire-based survey carried out in the territory of the Pardubice, Hradec Králové and Liberec-Regions. Questions were aimed at their current experience. One part of questions enquired about any support received by given organization irrespective of its source (i.e. national programmes, pre-accession funds, Structural Funds a.s.o.) with the other part of questions being focused on plans of organizations for the period 2007 – 2013. Findings from the questionnaire-based survey revealed that in both the scheme preparation stage and their implementation stage there is an apparent lack of information and staff responsible for a trouble- free scheme implementation, which is directly connected with the high administrative demandingness of the entire process. The interviewed want to use first of all the people currently involved in this process for the period 2007 – 2013 and they would also appreciate a possibility of a training to be provided to these people. Another issue was the co-financing provision and the subsequent fluent course of financing during the implementation of a scheme. The interviewed expect that the total value of schemes submitted in the period 2007 – 2013 will reach 2,5 billion CZK, which shows a high absorption capacity of the territory. Every fifth organization interviewed, however, has not had the co-financing of their schemes resolved so far.

4.9.D Exploitation of results of the existing support evaluation for the next period

Regions have been playing a very active part in the preparation of the new programming document. With respect to the experience they have gathered the regions have entered the new budget period with the following objectives set: • Operational programme preparation based on better consideration of the specific problems of the region • Subsidiary principle used for implementation of activities falling within the cognizance of regional governments, municipalities or institutions established by the afore-mentioned • Creation of an implementing structure consisting of max. 2 levels, so that the effectiveness of information and communication streams and uniformity of rules interpretation on the operational programme level is ensured. Ongoing exploitation of the current workforce within the SROP (JROP) implementing structure involving namely the staff of secretariats and eventually of the Regional Development Centre and additional recruitment of appropriate number of qualified employees as reinforcements • Provision of sufficient financial capacity for co-financing of the operational programme, systematic development of the region’s absorption capacity

Experience from preceding years will be taken into account in the new planning period by means of the following measures: • simplifying implementation structure (MA ROP Northeast provides for generally needed activities by itself without the intervention of intermediate entities), • reducing the number of attachments in applying for subsidies o some required attachments may be presented at Contract signing o financial provision of the project may be proved simply by written word of honor on the part of the applicant (in the previous planning period a bank statement, promissory note or decision statement from the local authority/region, etc., was also required) the demand for securing the entire financing for the project prior to its implementation has been removed, phase-based financing of the project has been introduced,

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• the creation of more objective means for evaluation of projects with an enhanced focused on project quality and contribution to society o specific criteria for individual project areas have been proposed which will then be taken into consideration when the project is evaluated o new guidelines for feasibility studies for small and large projects o incorporation of chapters touching on CBA into the guidelines for feasibility studies for large projects (in place of two documents there will now be only one containing all relevant information) • simplifying administration – two-way communication with applicants/beneficiaries via IS and by e-mail, • implementated elektronic processing and submitting of the applications via web application and IS of the applicant/beneficiary including automatic ddata transfer between IS of the applicant/beneficiary (web application) and the IS of the MA bringing following advantages: o internet access to the application o possibility to insert electronic attachments o automatic controls of the inserted data o hints directly in the application o data security due to the creation of user´s account and authorisation password o generation of the unique code ensuring the correspondence of the data when submitting the application to the MA o easier submission of the electronic application to the MA by the electronic import to the MA IS based on the unique code • within the framework of some areas of support it is possible to use cross-financing (it is possible to support those project activities which are "soft" and necessary to realize within the framework of the project), • partnership approach, • new, more transparent documentation system for applicants and beneficiaries (information for applicants and beneficiaries will be contained in a smaller number of documents).

4.10 SWOT analysis

4.10.A Global SWOT analysis

STRENGTHS

• Long industrial tradition, stable agricultural production and diversified manufacturing industry basis • Territory with high-quality natural environment and significant natural resources including rich underground and surface water resources • Attractive area with good preconditions for development of tourism consisting namely in the potential of natural and cultural-historical attractions and the developed basic technical and tourist infrastructure • Cultural, social and medical services accessible within the entire region and transregional sphere of action of specialized health centres • Growing level of educated population and presence of 5 universities in the region including technically-focused studies with research potential for innovative business development • Advantageous location of metropolitan agglomerations, road and railway network density • Presence of international public airport in Pardubice and refurbished and upgraded I. railway corridor

WEAKNESSES

• Presence of economically weak regions with a lack of jobs, stable businesses and high number of deteriorating properties and “brownfields“

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• Insufficiently developed or even missing technical and traffic infrastructure (absence of highways and expressways, unsatisfactory road and railway condition) • Insufficient traffic accessibility and traffic serviceability in rural areas • Unbalanced intensity of recreation and tourism with respect to the level of natural, sports and cultural opportunities offered in the NUTS II Northeast territory, large disproportion in development of individual recreation localities and centres • Poor social infrastructure, insufficient provision of civic amenities and unsatisfactory or even missing premises for cultural, leisure time and/or other collective activities in rural areas • Insufficient correlation between vocational training and labour market; lack of technical experts • Disturbed natural environment in industrial and urban areas, especially the municipalities where the transit traffic issue remains unsolved are concerned • Insufficient exploitation of the travel industry potential as a result of unsystematic coordination and weak promotion

OPPORTUNITIES

• Exploitation of geographic position and attractiveness of the NUTS II Northeast Region for attracting both domestic and foreign investors • Development of strategic services, advanced fields with high added value and high-tech industries in cooperation with foreign entities and regional centres of scientific research • Exploitation of natural conditions for development and modernization of agriculture and forestry with a focus on new advanced forms and nature and landscape protection • Promoted exploitation of alternative and renewable power resources • Development of new forms of tourism and growing interest of tourists in new, tourism-specific commodities ensuring job opportunities and alternative income resources • Development of a functional system of coordination of tourism-related activities based on mutual cooperation among regions, private and national sphere, special interest groups and groups of professionals • Development of combined traffic (construction of a multi-mode logistics centre in Pardubice, completed navigability of the Labe river as far as the town of Pardubice, public airports development) • Development of integrated transportation systems including modernization of railway and growing share of public transportation system

THREATS

• Increased unemployment as a result of low competitiveness of businesses in the European market • Reduced attractiveness of the region for investors as a result of the lack of financial resources to be spent on infrastructure, insufficient traffic connection and insufficiently prepared development areas • Low level of support given to the spheres of science, research and innovation and translation of their results into practice; insufficient growth of labour productivity affecting the population’s living standard • Postponed completion of the regional trunk roads and permanent growth of traffic intensity • Disproportion between environmental protection conditions and demands for area and traffic development; sustainability policies broken by means of inappropriate economic activities and missing care of the landscape; unnecessary or inappropriate seizure of high-quality land resources • Efflux of certain part of foreign demand as a result of its dissatisfaction with unsatisfactory offer supplied (accommodation, boarding, comprehensive tourism-related commodities) and quality provided by businesses dealing with travel industry • Absence of whole-life education system and insufficient attractiveness of jobs mainly in the sphere of agriculture leading to increased number and area of problematic regions • Lack of funds for maintenance of the existing scope of public transportation service and technical infrastructure development including information technologies • Overall long-term reduction in population number based mainly on natural replacement, deteriorating demographic structure of the population, gradual natural ageing of the

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population, increasing proportion of elderly and handicapped citizens as a result of the unfavourable demographic situation • Insecure long-term flow of financial resources into tourism

4.10.B Priority axis: Tourism-related infrastructure development

STRENGTHS

• Advantageous location of the Hradec Králové – Pardubice – Chrudim and the Liberec – Jablonec agglomerations • Road and railway networks density • Upgraded I. railway corridor forming a part of the Berlin – Prague – Brno – Vienna corridor • Presence of the international public airport in Pardubice, which is one of the five strategic airports of the Czech Republic

WEAKNESSES

• Absence of highways and expressways resulting in overloaded existing road network • Unsatisfactory technical condition of the II. and III. class roads, local roads and railway network • Insufficient level of traffic serviceability across the territory, missing coordination and link with railway and bulk road passenger transport • Insufficient traffic accessibility and traffic serviceability in certain border, foothill and sparsely populated areas • Insufficiently developed or even missing technical and traffic infrastructure in certain rural and low-populated areas involving small municipalities in particular

OPPORTUNITIES

• Advantageous geographic position of the territory spread from the north corner of the Czech Republic neighbouring with Germany through the Czech-Polish border area all the way to the eastern part and Moravian borderland penetrating also into the Czech-Moravian highland and covering large areas in the lowlands surrounding the Labe river. • Increased share of public transportation in the total transportation volume • Development of integrated transportation systems including modernization of trunk railway lines and construction of transition terminals representing an interface among individual means of transportation • Development of air traffic: a permanent reinforcement of the Pardubice international airport’s significance, refurbishment of airports in Liberec and Hradec Králové and recovery of the international airport status • Creation of a multi-mode logistics centre in Pardubice • Completion of navigability of the Labe river’s stretch between Chvaletice and Pardubice and construction of a terminal port in Pardubice

THREATS

• Postponement of completion of region’s trunk routes, leaving the region not unconnected to the trans-European transport networks in terms of appropriate parameters • Permanent growth of traffic intensity (traffic jams, accident rate, deteriorating environment in towns and villages and municipalities with extreme amount of transit traffic and freight transportation in particular) • Further deterioration of accessibility and importance of the region’s peripheral areas with difficult access • Lack of financial resources for maintaining the scope of public transportation and its subsequent recession

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• Absence of high-quality railway connection in most areas of the region with the other parts of the Czech Republic except for districts being connected to the I. railway corridor • Reduced attractiveness of the region for foreign investors due to its unsatisfactory traffic connection

4.10.C Priority axis: Urban and rural areas development

STRENGTHS

• Availability of the basic social and health care in the entire area • Increasing quality of habitation and growing interest in living in certain rural areas located mainly in town suburbs and in areas attractive from the perspective of recreation possibilities • Development of the non-profit sector, active club life, penetration of the non-profit sector also into the sphere of cultural, medical and social services • Sphere of action of regional hospitals reaching beyond the respective region’s border with respect to special activities provision • Presence of 5 universities in the NUTS II Region offering technical, economic, natural and humanistic studies. • Growing level of overall education of the population • Territory with high-quality natural environment free of any extreme environmental burdens • Large area of protected zones, including the Krkonoše national park. Presence of a biospheric reservation. • Significant natural resources – mineral resources, forests, soils, rich underground and surface water resources-very important area from the water management perspective

WEAKNESSES

• Insufficient material-technical utilities for education at a number of schools • Unsatisfactory premises and condition of many school buildings • Presence of unexploited and dilapidated properties and neglected areas in the region (mainly farm properties, properties being homes to civic amenities and other) and low interest in their refurbishment • Disturbed environment in industrial and urban areas with higher concentration of industry, historical environmental burdens not being dealt with • Lack of stable businesses and jobs in rural areas, missing trade network and services, low mobility of labour force caused by poor traffic serviceability • Unsatisfactory or missing premises for cultural, leisure time or other club activities in small municipalities • Ongoing emission occurrence caused in particular by small-, medium-sized and mobile pollution sources, increased noise level mainly in municipalities where the transit traffic remains unsolved • Disintegrated residential pattern – high number of small municipalities X high concentration of population in agglomerations • Regional capital towns in the Hradec Králové and the Pardubice-Regions are located far from natural geographic centres of both regions • Poor social infrastructure and insufficient provision of services relating to civic amenities in rural areas • Insufficient technical equipment and information interconnection of health infrastructure • High proportion of “prefab“ house apartments in towns, poor technical condition of “prefab“ houses

OPPORTUNITIES

• Ongoing optimization, enhancement of the quality and technological equipment of medical and social service, development of new services • Improved conditions for development of organizations, cooperation and activities concerning the population’s leisure time exploitation

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• Improved quality of education at all types of schools through upgraded school equipment represented by high-quality learning utilities and instruments, computers • Supported programmes of alternative or above-standard education • Refurbishment of school premises and buildings • Development of environment-focused and multi-function agriculture oriented at preservation of landscape’s function also representing a future source of new jobs in rural areas • Utilization of waste for power generation and reusable materials collection and supported utilization of products made from waste • Assessment of sustainability indicators in individual regions • Larger exploitation of supporting programmes for the support of agriculture, forestry and rural areas development • Creation of a suitable environment (legislative and financial) and intense orientation on enforcement of exploitation of local renewable power resources and raw materials tagged as secondary from the perspective of power generation • Exploitation of agricultural tourism as an alternative source of revenues and job opportunities • Protection of high-quality land resources in connection with sustainability of the landscape and natural values

THREATS

• Increased number of social-pathological and other undesired phenomena (crimes, drugs, gambling, alcoholism, deteriorating health condition of the population and other) in urban areas in particular • Overall long-term reduction in population number based mainly on natural replacement, deteriorating demographic structure of the population, gradual natural ageing of the population, increasing proportion of elderly and handicapped citizens as a result of the unfavourable demographic situation • Development of undesired economic activities with negative environmental impact, increasing water eutrophication, insufficient landscape cultivation • Increased number or area of problematic micro regions as a result of insufficient offer of jobs • Further recession in agricultural production leading to landscape devastation • Insufficient attractiveness of jobs in the sphere of agriculture for young and qualified people • Disproportion between environmental protection conditions and demands for area and traffic development; sustainability policies not being respected; unnecessary or inappropriate seizures of high-quality land resources • Endangered natural environment quality as a result of the growing and uncoordinated individual car transportation • Ongoing absence of the whole-life education system and qualification and certification acknowledgement systems

4.10.D Priority axis: Tourism

STRENGTHS

• A significant natural potential, attractive area with good preconditions for tourism development, variety of landscape types and attractive natural localities (water surfaces and streams, rock towns, protected areas...) • Area suitable for all-year performance of activities connected with recreation and sport • Basic technical and tourism-related infrastructure available (hotels, bed-and-breakfast-type of accommodation facilities, sports facilities, marked tourist routes) • Developing offer and quality of winter resorts of nation-wide importance • Rich cultural-historical heritage of the region, including a UNESCO-listed monument (the Litomyšl castle)

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• Competitive price of basic tourist services from an international point of view • High-quality traditional footpath network

WEAKNESSES

• Disproportional distribution of recreation and tourist activities´ intensity with respect to the nature, sports and culture offered within the NUTS II Northeast Region, considerable disproportion between the degree of development of individual localities and recreation centres • Lack of finance capital (both private and public) for investments in tourism • Insufficiently exploited potential of tourism as a result of unsystematic coordination and poor promotion • Problematic accessibility and lack of traffic infrastructure in certain tourist areas and points of tourist attraction • Low number of comprehensive tourism-related commodities • Insufficient development and enforcement of tourism organization (destination management) • Quality of the predominant offer of lodging and boarding services and their structure is disproportional and lags behind the expectations of the demand side • Absence (or limited offer) of associated infrastructure and services (activities) in winter and summer resorts • Absence of tourist information and guiding systems in certain parts of tourist regions • Low yield of lodging capacities • Incomplete bike paths (fragmented bike path system, absence of services on bike paths, low- quality surfaces of exploited roads) • Low number of categorized and certified accommodation facilities • Absence of professional associations of businesses dealing in tourism

OPPORTUNITIES

• Promotion of attractiveness of the Czech Republic as an international tourist destination • Development of new forms of tourism • Increased interest of tourists in new, specific tourism-related commodities • Taking advantage of good reputation of well-known winter resorts in order to extend the aggregate offer of the “winter tourism“ commodity • Development of the tourism-focused cross-border cooperation • Introduction of a functional system for coordination of tourist activities to be based on mutual cooperation of regions, private and public spheres, special interest groups and professional associations • Growing interest of tourists in exploitation of region-specific cultural attractions (traditional crafts, folklore) • Development of conference and incentive tourism • Extension of the scope of services offered by cultural institutions in order to develop the travel industry • Showing other regions of the Czech Republic to the Prague visitors • Promoted importance of cultural monuments and their exploitation for development of tourism • Exploitation of sustainability principles in a way that helps tourist regions become more attractive and competitive, gradual transition from certification of quality to environmental certification

THREATS

• Efflux of certain part of foreign demand as a result of its dissatisfaction with unsatisfactory offer supplied (accommodation, boarding, comprehensive tourism-related commodities) and quality provided by businesses dealing with travel industry • Uncoordinated development and low quality of tourism-related services (insufficient offer of boarding and lodging services) • Low competitiveness of certain less attractive areas • Deteriorating condition of historical properties and tourism-related infrastructure due to the lack of financial resources

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• Insecure long-term flow of financial resources into tourism • Tourist areas being overloaded with individual car traffic as a result of neglected public transportation support (namely the railway transportation is concerned) • Famous winter and summer resorts get overloaded • Slow development of an adequate tourism-focused organization, management and information infrastructure • Low degree of coexistence between environmental protection conditions and demands for tourism development • Ongoing lack of a viable national tourism strategy • Efflux of permanent residents from areas that are most valuable for their nature and offer of tourist activities

4.10.E Priority axis: Development of corporate environment

STRENGTHS

• Long tradition of technical know-how thanks to traditional engineering, chemical, glass and electro technical industries • Availability of technical universities possessing scientific research potential for innovative business development • Sufficient diversification of industrial basis with significant proportion of small- to medium-sized businesses and their relatively even distribution across the region • Significant presence and growing number of foreign businesses and businesses with foreign capital participation

WEAKNESSES

• High number of brownfields of industrial and other nature, problematic exploitation of old industrial premises and former military areas • Development areas for support of investments being insufficiently prepared and funded • Vocational education being inconsistent and insufficiently interconnected with labour market – ongoing lack of technical experts in engineering and IT branches in particular • Insufficient interconnection and cooperation of scientific potential at universities with manufacturing plants and businesses in the region • Underdeveloped sector of the so-called strategic services (IT, e-business, marketing, human resources development) • Availability of economically weak micro regions of mainly rural character with low-quality infrastructure, lack of stable businesses and jobs

OPPORTUNITIES

• Creation of an investment support system and development of areas and premises for arrival of new investors oriented at value-added production • Exploitation of the innovations transfer to raise competitiveness of all entities in the region; introduction and development of the so-called business incubators, technological, scientific and technical parks • Development of strategic services, progressive branches with high added value and high-tech industry in cooperation with foreign entities and businesses getting also the regional basis of scientific research and scientific and technical potential of universities involved • Development of business activities in the fields of IT, e-business, support of new technologies aimed at raising competitiveness of the business sphere • Creation and extension of clusters, role of which is to support cooperation of entities active in related branches aimed at facilitation of expansion to foreign markets • Taking advantage of a favourable image of the Northeast Region known as a region of qualified but also relatively cheap human resources to attract corresponding investments and activities • Taking advantage of the geographic position and attractiveness of the NUTS II Northeast Region to boost business activities of both domestic and foreign investors

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THREATS

• Lack of qualified work force in the region, general fall of interest in technical fields and insufficient interconnection of the education system with the needs of the industry; efflux of tertiary education graduates leaving for different territories (namely for Prague) – weak intellectual basis of the region • Low level of support given to the spheres of science, research and innovation and translation of their results into practice; insufficient growth of labour productivity affecting the wages paid throughout the region and thus also affecting the population’s living standard • Reduced attractiveness of the region for foreign investors due to its unsatisfactory traffic connection and insufficiently prepared development areas; lack of financial resources for reproduction and development of the technical infrastructure • Growth of mainly the long-term unemployment as a result of incomplete restructuring of firms and their low competitiveness in the European market and subsequent reorientation of the interest of both foreign and domestic businesses dealing with simple production towards different territories with cheaper work force • Insufficient development of small- to medium-sized businesses active in secondary and tertiary sectors; reduced capability of the local market to absorb an eligible work force

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5 Strategy

5.1 Strategy resources

There are two documents used as a basic internal resource for selection of a strategy, i.e. the socioeconomic analysis and the SWOT analysis. The socio-economic analysis of the Northeast Cohesion Region identified all problematic issues for further development of the region and subsequently defined areas put under focus of the later defined region’s development strategy. Role of the SWOT analysis was to identify the region’s strengths with a big development potential upon which can be the strategy implemented and also its weaknesses that need to be eliminated or suppressed in order to eliminate the impact of potential risks. Strengths of the Northeast Cohesion Region are mainly consisting in the dense traffic network (roads, railways, airports), stable economic background, high number of universities, available social and medical services, high number of natural and cultural-historical attractions and high-quality tourism conditions. The region’s strengths are of a permanent character and can be used as a high-quality foundation-stones for the build-up and implementation of the strategy. The region’s weaknesses involve areas that have so far been ignored or condition of which incurred a significant deterioration over the time. In the region there can be found economically weak areas with high unemployment rate and low economic performance. From a region-wide perspective there can be seen poor condition of namely the traffic infrastructure, high number of dilapidated and unexploited premises and properties, poor social infrastructure (including education and health infrastructure), insufficient provision of the services falling under the civic amenities and no interconnection of public services resulting in low effectiveness of expenditures. These areas will need to be intensified and further improved through public interventions based on the implementation of the strategy, since they represent important parts slowing the region’s development down. Inattention to these issues would hamper the whole region’s development for long decades. On the other hand, there are opportunities for the region that may become a significant impulse to a much more intense boost of the region’s economic development once the strengths has been reinforced and the weaknesses eliminated. In this sense the opportunities to develop new products and services of high added value in the sphere of strategic services can be used as well as the scientific and technical potential of the region, transportation system development, introduction of an effective system for the management of tourism-related information and activities, citizen-focused public service development and exploitation of the region’s geographic and natural conditions. The region already faces several risks arising from an insufficient development of key areas for economic performance and competitiveness. The risks mainly relate to low attractiveness of the region due to poor infrastructure, low science- and research-related expenditures as well as low amount of funds spent on progressive technologies and human resources development. As a big risk for future is seen the deteriorating demographic structure of the region’s population and the missing life-long education system. Based on the processed socio-economic and SWOT analyses a global target has been identified for setting the basic direction of the region’s development. These analyses also allowed for identification of key areas to be under region’s concentration in order to reach that global target. The key areas of the region have become foundation-stones for specific ROP Northeast targets identification – concrete areas where the public interventions´ effects/benefits will be maximized by the region. The basic external resources for definition of a strategy are the priorities of the superior programme documents of all the three regions constituting the NUTS II Northeast Region, EU and the Czech Republic. On the regional level the strategic development documents defining the main development priorities are concerned, further there are thematic conceptual documents defining objectives of a particular area. On the national level there are the National Development Plan and the related National Strategic Reference Framework creating a link between the national and the European priorities. On the European level there is Community strategic guidelines document defining the basic development strategy of the EU in terms of the economic and social cohesion.

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5.2 Main characters of the strategy

The strategy itself and the exactly-specified regional public interventions derived from it focus on the most-problematic spheres of the region’s territorial development. Regional interventions form a part of the whole public intervention system under which also the operational programmes are falling. Through an effective exploitation of financial resources from regional and sector/thematic operational programmes a comprehensive solution to all key issues of the region will be assured and the global and specific targets will be attained. While the interventions in terms of sector operational programmes focus on particular topics, the ROP Northeast accentuates a comprehensive approach being significantly focused on both the improvement in physical environment and its attractiveness not only for the region’s inhabitants and visitors and the increasing accessibility and population’s mobility and the increasing quality of life in the region in general. Development of preconditions for growing investments in the region also represents a part of the above. With respect to the territorial differentiation the ROP “Northeast” is oriented towards providing solutions to issues of urban and rural areas and towards reinforcement of relations between towns and their rural background respectively. From this point of view the main support recipients are the spheres of traffic accessibility, tourism development, education, health, social and traffic infrastructures a.s.o. Part of the interventions concerns revitalization and refurbishment of selected town quarters. Through implementation of the programme the infrastructure owned mainly by regional and municipal governments will be appreciated and quality of public services will be enhanced. Public interventions will also have a positive impact on the natural environment and the traffic infrastructure in particular. By means of support provided to small towns and rural areas balanced development of the whole region will be maintained. The application of equal opportunities principle has been incorporated into the entire document.

5.3 Strategy of the Northeast Cohesion Region

The strategy of the Northeast Cohesion region is based upon the strategic development documents of the Hradec Králové, Pardubice and Liberec regions and is fully compatible with them. The goal of the NUTS II Northeast Cohesion region strategy over a long-term, 20-year horizon is to make the Northeast region an attractive, prospering and competitive region with a stable social environment which respects the principles of sustainable development. The goal is to make the region a strong, indivisible and integral part of the European arena. A high quality of life should be enabled and provided for citizens. All areas of life should be harmoniously developed in a balanced fashion which looks forward to future generations. This overall target will be attained by the gradual achievement of targets in individual priority areas. The following six areas comprise the priorities of the region: Transportation and infrastructure Economics and employment Tourism Human resources Natural environment

Transportation and infrastructure This priority area is aimed at quality improvement in the transportation infrastructure, improved access and services throughout the entire territory, modernization of the technical infrastructure and last but not least, quality improvements in the information infrastructure and in telecommunications technology. For balanced development in the region, it is necessary to ensure that, in all its aspects, conditions are created to ensure quality transportation access throughout the territory and to improve the technical and informational infrastructure in a way which respects the natural environment.

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One of the presumptions concerning economic growth in the region is the ensuring of a quality transportation infrastructure, which is an important precondition and presumption for the development of the territory and for influencing the attractiveness of the locale. And inadequate infrastructure fundamentally decreases the attractiveness of the region and its municipalities for investors and thereby lowers competitiveness. The substandard technical condition of the regional transportation network complicates transportation in the territory of the region. It is thus necessary to connect the region to the trans-European transportation network and to reconstruct the existing highway network, as well as facilities which are directly connected to it. Air transportation makes possible rapid connections between European regions and the territory of the region. The support provided by a combination of transportation and the building of multimodal terminals will lead to a reduction in stress on the highway network attributable to cargo transport. As concerned to rail transport, attention is focused on the modernization of the republic-wide network backbone with its connections to neighboring regions and the preservation or renewal of regional rail lines based upon need. Transportation services represent an important quality-of-life factor in the region and play a key role in the choice of living locations and work locations by citizens.

The quality of the technical infrastructure represents one of the fundamental conditions for comprehensive development of the region and is irreplaceable for both economic development activities and in securing the many needs of modern life. This is what makes it necessary to reconstruct the existing, aging technical infrastructure and support the development of new infrastructure. The development of an informational network is very significant for the economic development of the region, especially for its outlying areas. Access to progressive forms of telecommunication and information infrastructure may form the basis for problems caused by distance for both business and education and social development to be overcome. In developed countries, the importance of modern information in telecommunications technologies are increasing, since they form pillars of the knowledge economy. The region also requires that communication backbone infrastructure is provided for and that the network be built in areas of the region with inadequate access so that optimal access to information and telecommunication technologies may be achieved for all citizens of the region.

Balanced urban and rural development The priority area is aimed at these strategic goals: development of municipal areas, increasing the economic potential and attractiveness of rural areas and the development of citizens' associations. Within the territorial structure, cities represent important regional centers with labor, lifestyle and service functions. They represent an important concentration of activities with high growth potential which must be strengthened and developed. At the same time, large cities are also naturally concerned with the degradation of some of their parts, which are gradually losing their function. Support for the revitalization process of such disintegrating problem areas which have already lost their functionality is one of the targets of this priority. Increasing the quality-of-life in cities requires further development of public facilities, stimulation of housing development, the prevention of criminality and pathological phenomena and the creation of areas for sport, rest and recreation.

In accord with the stated goal of balanced development in the region, it is necessary to strengthen rural areas. Stress must be laid on an increase in economic potential and attractiveness of rural areas. Support for new activity not only allows for a reduction in the dependence on cities but also the creation of new workplaces, increased inflows and a resulting elevation in the standard of living in rural areas. It is necessary to create a set of conditions which will make rural areas more attractive and facilitate the quality of life of their residents.

One of the key factors for the balanced and comprehensive development of the territory with regard to respecting the principles of sustainability is the introduction of modern planning methods for municipalities, cities and regions. By means of developing and carrying out quality strategic development concepts, territorial plans and other documents for midterm and long-term planning, municipalities can specify the main directions and goals of development, including the means for their attainment.

Economics and employment The economics and employment priority is aimed at the development of commercial infrastructure, mutual cooperation by companies, tertiary educational institutions and research institutions, and

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further at the support of research, development and innovation and at increased employment and an employable citizenry.

Development of the commercial sphere comprises a pronounced influence on economic prosperity and employment in the region. Support for the commercial environment plays a significant role in increasing economic competitiveness.

Support for private companies is one of the key factors in the development of regional economics for the Northeast Cohesion region and in increasing overall employment, since the private sphere forms one of the chief sources of income in the regional budget.

Support for the origin and development of new firms and enterprises generally enrichens the variety of economic activity. It contributes to broader diversification of economic activities as one of the key conditions for reducing the risk presented by the disappearance of individual economic activities to employment in the region. The creation of positive conditions for the development of business, which facilitates the origin of new jobs and in the final analysis contributes to a reduction in unemployment in the region, should be especially attained by the construction and reconstruction of requisite commercial infrastructure.

In attaining the stated economic development targets, further support conditions which have an influence on the realization of the stated direction of development cannot be overlooked. These especially concern an emphasis on mutual cooperation by companies, institutions of tertiary education and research institutes and on an improvement in communication and overall cooperation between public administrative bodies and the commercial sphere. This essential area of cooperation requires attention be given to the commercial utilization of research and development results. This will create conditions for an attractive business environment within the region. These are determining factors, since cooperation between all these key actors makes it possible for private firms to utilize results, with the potential for increasing their technical and technological level, thereby increasing the quality of their products and services. Support for research, development and innovation (systemic and technological) is therefore a very desirable and irreplaceable condition for development of the entire region, with a significant impact on the development of private companies.

Tourism The Tourism priority area is aimed at increasing the share which tourist activities contribute to the prosperity of the region, at more effective use of the potential of rural and municipal areas for tourism, increasing the capacity of the tourism infrastructure and at its modernization.

The Northeast Cohesion region possesses a significant potential in the area of tourism connected to its large number of natural, cultural and historic monuments and attractions. A necessary precondition for greater use of this potential is an adequate offering of quality services and products by tourism providers, which would facilitate the attractiveness of the region and thereby increase the visitor count and receipts for tourism service providers. An important factor in the development of tourism is making use of a broad range of cultural and social activities and organizing them in the offerings of tourism providers.

In order to develop tourism in rural and municipal areas, it is desirable to support and make use of the social/cultural, cultural/historical potential of municipalities and cities and specific cultural regions. Another of the basic conditions for intensifying tourism in potentially attractive tourist locations is the creation of facilities for visitors: accessibility of services, information services, etc. Significant opportunities in the conditions of the region are also offered by the development of modern alternative forms of tourism: ecotourism, agricultural tourism and geotourism. It is important to support the activities of associations and organizations concerned with traditions and regional and local specifics. Increasing the level of basic and supplemental infrastructure and improving the quality of services provided by individual facilities for tourism in the region contributes to the attractiveness of the territory for tourists, leading to a growth in income in the tourist sector. This goal also requires attention be paid to the necessary repair and maintenance of cultural/historical and technological monuments.

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Human resources This priority area aims at the development of education among the citizenry, at the development of lifelong learning, and further at accessible, quality social and health services in the overall quality-of- life of residents.

It is essential to stress strategic management and development of human resources for the creation of competitiveness and a dynamic region. Only a region open to various sources of input, innovations in thought and approach is capable of reacting flexibly to the challenges of the future and of effectively withstanding the changes influencing its social/economic and cultural development.

To achieve the goal of increasing the quality of life for residents, it is necessary to stress an increase in education and an improvement in the health of residents, both of which factors have a direct influence on the maintenance of competitiveness and the sustainability of development for the entire region. To fulfill the outlined developmental directions in the area of human resources development, the chief factor is stressing the process of lifelong learning, whose importance and necessity in the process of learning for every individual should be emphasized and accented at all levels of schooling, beginning with the initial entrance of the individual into the educational system.

Along with the requirement for growth in the education of residents comes the necessity for coordination between schools and the labor market and the qualification demands of employers, which should have the effect of strengthening the adaptability of the labor force in the functioning of graduates from all schools in the labor market, something which depends upon the formulation of concrete demands on knowledge and abilities by employers and flexible reactions by educators in offering corresponding educational programs, along with flexible reactions to trends in individual professional areas and curricula adapted to them.

Increasing the quality of life of residents depends upon access to quality social and healthcare services. Relieving inequalities in the distribution of social services and time-based problems of healthcare access in areas at the periphery of the region make more effective coordination and cooperation by health and social care facilities desirable.

In ensuring the quality of life of residents of the region, community and cultural life and the development of varied interest activities undertaken by residents in their leisure time play a key role. In this way, conditions are created for a healthy lifestyle and room is made for non-formal and informal instruction as part of a comprehensive process of lifelong learning.

Natural environment The target of this priority area is to improve the state and preservation of the natural environment, to provide for protection and considered use of the landscape and natural potential and to develop the system of environmental training, education and enlightenment. The ties between socioeconomic development and the quality of the natural environment are close, making it necessary to consider the natural environment over the long range as a factor which impacts upon local and regional competitiveness. Investment in the natural environment strengthens the sustainability of economic growth and lowers outlays (or prevents outlays from arising) from negative externalities of economic development. The quality of the natural environment is closely tied to the attractiveness of the entire region. Individual goals in this area include a reduction of all negative admissions into the environment (atmosphere, aquatic and ground), efficient waste management, utilization of alternative energy sources, etc.

In the territory of the Northeast Cohesion region, a number of important protected areas are to be found of both a regional and national nature but also of pan-European importance. It is necessary not only to ensure the preservation of nature itself but also to take a considered approach to tourism and a well-reasoned approach to the economics of agricultural areas.

Support for environmental training, education and enlightenment is one of the basic components of the ecological awareness of residents and a way to instill them with responsibility and respect for future generations. It is necessary to support the most varied forms and methods of ecological training and education, e.g., instruction at all levels of schooling, meetings and lectures and management and development of a network of ecological advisory centers. An important role is played in this by

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enlightenment and getting the public connected to efforts to increase interest in protecting the natural environment. The goal of this process of environmental training, education and enlightenment is to bring the principle of sustainable development to bear on all activities of everyday life.

Possibilities for financing priority areas by means of EU cohesiveness policy tools

Priority NUTS II Northeast – Transportation and Infrastructure Operating program Priority axis o Modernization of the TEN-T rail network o Construction and modernization of the TEN-T highway and motorway network o Modernization of the rail network outside TEN-T OP Transport o Modernization of Class I highways outside TEN-T o Support for multimodal cargo transport and development of inland waterway transport

OP Business and Innovation o Energy efficiency Development of transportation Regional Operational Programme o infrastructure o Strengthening of access, protection of OP Cross-border Cooperation the natural environment and risk Czech Republic – Republic of Poland prevention

Priority NUTS II Northeast – BALANCED DEVELOPMENT OF CITY AND COUNTRYSIDE Operating program Priority axis Development of urban and rural areas Regional Operational Programme o

Integrated Operational Programme National support for territorial development o Strengthening of access, protection of the natural environment and risk OP Cross-border Cooperation prevention Czech Republic – Republic of Poland o Support for cooperation between local communities

Priority NUTS II Northeast – ECONOMICS AND EMPLOYMENT Operating program Priority axis o Business startups o Company development Innovation OP Business and Innovation o o Financing for entrepreneurship and innovation o Business development services o Development of R&D capacity o Development of cooperation between the public and private sectors in R&D OP R&D for Innovation o Strengthening of capacity of schools offering tertiary education

o Adaptability OP Human Resources and Employment o Public administration and public services

Continuing education OP Education for Competitiveness o o Tertiary education, R&D

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Development of the business Regional Operational Programme o environment o Modernization of public administration Integrated Operational Programme o Introduction of ICT in territorial public administration OP Cross-border Cooperation o Improved conditions for development of Czech Republic – Republic of Poland the business environment and tourism Priority NUTS II Northeast – a TOURISM Operating program Priority axis Regional Operational Programme o Tourism o National support for tourism Integrated Operational Programme o National support for territorial development OP Cross-border Cooperation o Improved conditions for development of Czech Republic – Republic of Poland the business environment and tourism Priority NUTS II Northeast – HUMAN RESOURCES Operating programme Priority axis o Initial education OP Education for Competitiveness o Continuing education o Tertiary education, R&D o Adaptability Active labor market policies OP Human Resources and Employment o o Social integration and equal opportunities o International cooperation Strengthening capacity of universities for OP R&D for innovation o tertiary education Regional operational programme o Development of urban and rural areas Increasing quality and access to public Integrated Operational Programme o services o Improvement of conditions for development of the business OP Cross-border Cooperation environment and tourism Czech Republic – Republic of Poland o Support for cooperation between local communities Priority NUTS II Northeast – NATURAL ENVIRONMENT Operating programme Priority axis o Improvement of water management infrastructure and reduction of flood risk o Improvement of air quality and reduction of emissions o Sustainable use of energy resources o Quality improvements in waste handling and removal of old ecological burdens OP Natural Environment o Limiting industrial pollution and environmental risks o Improving the state of the natural environment and countryside o Developing infrastructure for environmental education, counseling and enlightenment Energy efficiency OP Business and Innovation o

o Strengthening of access, protection of OP Cross-border Cooperation the natural environment and risk Czech Republic – Republic of Poland prevention

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5.4 The issues tree

The issues tree represents basic development barriers/problematic areas including their causes and potential impacts. The ROP Northeast focuses on elimination or reduction of causes behind the occurrence of problematic areas and reduction of the intensity of their impact.

Picture No 13: The issues tree

Low traffic safety Reduced Poor condition of the investments, efflux natural environment of investors Increased regional Increased occurrence Recession of rural Low possibility to of social-pathological disparities areas find a proper job for phenomena Efflux of the demand Increased More intense the workforce Impacts unemployment for services Loss of brownfiled-related Lower revenues from Population moving out problems competitiveness tourism from the region Population moving out Low innovation Low workforce mobility from rural areas capacity

Ongoing devastation of Stagnation of further Recession of cultural Economy of a low-road traffic infrastructure development, monuments and travel- character enlargement of regional industry-related by areas disparities background Consequences

Region with low economic competitiveness, high unemployment, territorial disparities and low living standard of population compared with the advanced European regions Main problem

Poor traffic infrastructure Disparities between Unexploited tourism Low competitiveness urban and rural areas, potential of the region of the business sector public services of low

area quality Problematic

Poor condition of roads Unexploited areas and No cooperation No mutual cooperation and related structures dilapidated properties between public and among businesses Insufficient traffic incl. brownfields private sector No interconnection accessibility and traffic Insufficient services in Undeveloped between the education information system system and the labour serviceability of area terms of civic market Insufficient connection amenities Poor condition of Unprepared with superregional Obsolete health and cultural monuments development areas traffic networks social infrastructure Insufficient associated and unexploited Disturbed living infrastructure properties environment Products and services Obsolete education with low added value Causes infrastructure Occurrence of social- pathological phenomena No interconnection between health and social services

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5.5 Global target and specific targets of the ROP “Northeast”

The basic resource for the selected ROP “Notheast” strategy is represented by the definition of a global target as incorporated in the basic document of the Czech Republic for the programme period 2007-2013, i.e. the National Strategic Reference Framework, which contains the following statements: “Transformation of the Czech Republic and its socio-economic environment in compliance with sustainability principles into area attractive for both investors and work and life of the population. The permanent reinforcement of competitiveness will bring a sustainable growth, pace of which will be higher than the average growth of the EU 25. The Czech Republic will seek an employment growth and balanced and harmonic development of regions resulting in higher quality of life of the population“. Global target of the Northeast Cohesion Region for the programme period of 2007 - 2013 is: “Growing physical quality of the region making it more attractive for investors, businesses and inhabitants. Increased attractiveness of the region will move it towards the average socioeconomic level of the EU.“ The global ROP “Northeast” target is in agreement with the Community’s Target 1 – The Convergence. Target of the convergence is to support the growth potential of the individual European regions in order to reach higher rate of growth. The target of the convergence was adopted by the Community in response to the growing variances in economic performance and competitiveness of the enlarged EU. Key target of the cohesion policy is to support the growth-boosting conditions and factors leading to real convergence. Target 113 – Convergence concerns those regions, where the GDP per person expressed in purchasing power parity is under 75% of the average value of the Community. Higher economic growth rate of the Northeast Cohesion Region will gradually help decrease the performance gap between the region and the advanced regions of the EU. In this sense the global ROP “Northeast” target focuses on the enhancement of the physical environment’s quality, which influences to a certain extent the ability of the region to reduce the performance gap. The fact that the global target is based on the “Europe and European regions more attractive for investors and work force“ and the “Improved knowledge and innovations: a way to growth“ and the “Creation of more and better job opportunities“ policies means that it is in compliance with the General Principles of the Cohesion Policy on Growth and Employment Support14 (Community strategic guidelines, 2007-2013). The ROP “Northeast” system of priority axes and their areas of intervention is focused on fulfilment of priorities set by the renewed Lisbon strategy and is fully complementary to the Community strategic guidelines. The Regional operational programme for the Northeast Cohesion Region is focused on problematic areas, which are in need of an effective and efficient solution represented by regional public interventions. One of the determining factors for definition of the scope and focus of public interventions in terms of the Regional operational programme is the specification of interventions among the operational programmes on national and regional level. In this context the specific ROP “Northeast” targets have been defined as follows: Specific target 1: Increased accessibility of the region and higher traffic effectiveness while respecting the natural environment protection Specific target 2: Improved quality of life and public services for the inhabitants with an emphasis on reduction of regional disparities Specific target 3: More effective exploitation of the region’s natural and cultural potential Specific target 4: Raising the attractiveness of the region for businesses and investors

The focus of the Regional operational programme of the NUTS II Northeast Region is based on and tied to the strategy defined by the National Strategic Reference Framework 2007 – 2013, which on one hand is reflecting the targets and intentions of the key general and branch-specific strategies of the Czech Republic (the Strategy for the Economic Growth of the Czech Republic, the Strategy for

13 See the European Community Council Regulation No. 1083/2006 of 11th July 2006 on general provisions concerning the European fund for Regional Development, the European Social Fund and the Cohesion Fund and on cancellation of the European Community Regulation No. 1260/1999. 14 See the Committee Notification, Cohesion Policy on Growth and Employment Support: Strategic Principles of the Community, 2007-2013 (KOM (2005) 0299), the Brussels, 5th July 2005

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Sustainability of the Czech Republic and other) and immediately responds to the needs of the Czech Republic and, on the other hand, defines the directions for the Czech Republic’s economic- and social-cohesion-related contribution towards the achievement of the European Union’s target defined in the Lisbon strategy within the next seven years. According to conclusions made by the European Union Council the achievement of the Lisbon targets necessitates involvement of all regions including their regional and local participants and social partners in such cases especially, where the low distance of territories plays a significant role. Activities to be carried out within the ROP Northeast will boost the economic performance and competitiveness of the region and thus contribute towards the achievement of the global target of the economic and social cohesion defined by the Community strategic guidelines and National Strategic Reference Framework respectively.

Picture No 14: The ROP “Northeast” targets tree

Global ROP ”Northeast” target „Growing physical quality of the region making it more attractive for investors, businesses and inhabitants. Increased attractiveness of the region will move it towards the average socio-economic level of the EU.“

Specific target 1 Specific target 2 Specific target 3 Specific target 4 Increased Improved quality of More effective Raising the accessibility of the life and public exploitation of the attractiveness of the region and higher services for the region’s natural and region for traffic effectiveness inhabitants with an cultural potential businesses and while respecting the emphasis on investors natural environment reduction of regional protection disparities

Priority axis 1 Priority axis 2 Priority axis 3 Priority axis 4

Development of the Development of urban Tourism Development of the traffic infrastructure and rural areas business environment

5.6 Selected strategy

The ROP “Northeast” specific targets and their definitions and contents respectively, have been chosen based on the socio-economic and the SWOT analyses. The content and focus of specific targets fully reflect the region’s intention to concentrate on areas offering the biggest potential and effective and efficient exploitation of public interventions as financial tools, through which the global ROP “Northeast” target is to be achieved. During processing of the ROP “Northeast” the people in charge of its processing coordinated their work with central institutions of the national government (Ministries) as they were involved in creation of the thematic operational programmes falling within the entire set of the Czech Republic’s operational programmes. Based on consultations there were identified key areas for regions´ development (support) to be under focus of the nation-wide programmes and the ROP “Northeast”. The specific ROP Northeast targets represent just a part of the overall Czech Republic’s strategy contributing to the achievement of the Community targets. The set of specific targets chosen represents a final alternative based on a long-lasting process of making decisions on what thematic areas and territories shall be supported and developed. The regions´ basic strategic documents processed before the processing of the ROP “Northeast” started were used as a background for decision on where the support should be directed to. Regions´

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priorities have primarily been focused on raising the socio-economic level in their territory, which mainly concerned areas with the biggest development potential and elimination or a considerable reduction of weaknesses, which to a large extent limit further development of regions or increase the risk of impact of threats that shall be avoided by the regions. The specific ROP “Northeast” targets have been defined in connection with the NRP targets and the NSRR targets respectively, and it is possible to say that the regional specific targets are complementary to the national targets in situations where a region itself can use the public interventions for its development in a better way and based on better knowledge of a given case. Improvement of traffic infrastructure being necessary for economic and social development of a region, improvement of physical environment in urbanized districts, effective exploitation of natural and cultural potential and development of conditions for the growth of region’s economic background will represent areas where traces of the highest efficiency and effectiveness of public interventions to be furnished in order to achieve a global ROP Northeast target will be well visible. These areas have been used as a basis for definition of specific ROP “Northeast” targets and related priority axes. Regarding the amount of allocated resources, respective specific targets and related priority axes were assigned their weights depending on how serious the situation of a respective area was felt to be, how much the respective area could contribute towards the global target achievement and how expensive the respective solution to the problematic area would be. Based on the above-stated facts the weights assigned to respective targets and the strategy as such can be regarded as a document that emphasizes balanced development of the region with a view to eliminate regional disparity. Individual spheres of support /priority axes will influence and complement each other, which will multiply the effect of public interventions. In order to support the development of the region it could be possible to adopt a different strategy and different alternatives of the chosen strategy respectively, with its content involving different or fewer targets. However, the content and the number of specific targets represent an internally-tied system covering areas, modification or alteration of which still falls within the region’s competence. Besides that, the ROP “Northeast” forms a part of the set of operational programmes (thematic programmes and regional programmes) covering the area of all regions of the Czech Republic. In this way the ROP “Northeast” complements the function of the thematic operational programmes within the territory of the Northeast Cohesion Region.

Specific target 1: Increased accessibility of the region and higher traffic effectiveness while respecting the natural environment protection Attractiveness of the region for investment is influenced by a number of factors. To the most significant ones belong the high-quality transportation system and traffic infrastructure and namely the density and quality of road and railway networks, which all have an essential influence on accessibility of all parts of the region. In this respect the region possesses the dense road and railway networks, several regional and one international airport. Traffic network and the car traffic network especially is overloaded and damaged as a result of the growing number of vehicles used. The resources spent so far on road repairs cannot cover the growing need of investments in this sphere. This makes itself felt through higher accident rate, lower accessibility of certain areas and environmental disturbance. In the region there is an apparent lack of new stretches of the D11 highway and expressways. The centres of municipalities get more and more overloaded with the traffic due to missing by-pass roads, which would take the traffic out of the urban areas. An unsatisfactory condition of bridges caused mainly by an excessive load of road freight traffic has recently been identified as a considerable risk. Another issue that concerns the area of Pardubice in particular is the poor condition of infrastructure of the regional airport, which considerably limits the potential inherent in this kind of transportation but also the region’s potential regarding new business and tourism-related opportunities. Another important factor of a significant influence on the region’s attractiveness is the quality and scope of transportation services playing also major role with respect to mobility of the people and the labour force in particular. Level of transportation service in the region is insufficient and closer coordination and relation between the public road and railway transportation are missing. Currently large part of the population living in bigger towns is served by existing integrated transportation systems. People in rural areas often cannot get access even to the basic transportation services, which results in gradual efflux of the population from rural areas and worse economic standard of these areas.

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The specific target will be achieved through subsidized construction and refurbishment of the traffic infrastructure, through development of integrated transportation systems aimed at raising the volume and quality of transportation service provided across the region’s territory and through development of public international airports. The global target will be achieved through increased attractiveness of the physical environment of the whole region’s area, which is necessary for enhancement of quality of life of its population and for increased amount of investments to be based on improved accessibility of the region as well as larger availability of labour force. Improved traffic accessibility will partially equalize the conditions for access of rural communities to education, cultural and other social activities. This will prepare the ground for maintenance of social coherence, evenly inhabited region, economic prosperity and competitiveness of the region in general. The specific target will be realized through the Traffic infrastructure development priority axis Relation to other specific ROP “Northeast” targets: Namely the improvements in road infrastructure, traffic accessibility and transportation service within the given territory will result in increased mobility of the population and higher availability of education opportunities regarded as important for economic growth and higher competitiveness of the region. The improved traffic accessibility and mobility will intensify the links between urban and rural areas and thereby the demand for regional disparity reduction and balanced development of the region will be met. The first specific target is closely tied to the second specific target defined as “Improved quality of life and public services for the inhabitants with an emphasis on reduction of regional disparities“ and the related “Development of urban and rural areas“ priority axis. The improved traffic accessibility and serviceability of the given territory will generally increase the region’s attractiveness and assure favourable conditions for exploitation of the region’s large tourism- related potential being one of the sources of economic prosperity of rural areas in particular. In this respect the specific target is strongly tied to another specific target defined as “More effective exploitation of the region’s natural and cultural potential“ and the related “Tourism“ priority axis. Once the specific target has been achieved, preconditions for an increased region’s attractiveness for investors will be established, which represents a necessary condition for the development of both existing and new economic activities in the region. Intensification of the existing economic potential of the region will accelerate the process of convergence towards the advanced EU countries (link to the specific target defined as “Raising the attractiveness of the region for businesses and investors“ and the related “Development of the business environment“ priority axis). Improved road condition and development of existing road network will optimize the exploitation of specific roads, which will divert the traffic away from urban areas and positively influence the quality of both the life of the population and the living environment. High-quality traffic infrastructure will also contribute towards accident rate reduction.

Specific target 2: Improved quality of life and public services for the inhabitants with an emphasis on reduction of regional disparities The region is characterized by a scattered, inhomogeneous habitation structure and uneven habitation density. A high living standard concerning mainly the sphere of inhabitation and availability and quality of health, social and other public services is more typical for towns rather than for rural areas. The necessity of investments in the neglected public properties and premises and cultural and historical heritage (neglected downtowns and areas with historical monuments) represents a common issue for urban and rural areas. Besides that the urban areas struggle with higher occurrence of social- pathological phenomena, while the rural areas face higher unemployment. While the towns in particular have high number of unexploited and neglected properties and premises of mainly industrial nature (brownfields), rural areas get affected by a different problem consisting in gradual imperceptible efflux of population, higher average age of the population, lack of jobs and low job-related mobility connected with a problematic traffic serviceability. Meeting the demands for an increased population safety and safety risk elimination (rescue and prevention systems) means another important area. The specific target will be achieved mainly through enhanced quality of public service infrastructure, specifically through new construction and refurbishment of health facilities, social service facilities, properties for education and other civic amenities. The increased attractiveness of urban and rural areas shall be attained based on regeneration and revitalization of unexploited premises and properties and improved look of public areas.

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The global target will be achieved by means of improved living conditions of urban and rural areas. There will be preconditions established for improvement of social and health services and their effective and efficient correlation and for the growth of the number of educated population and qualified work force being regarded necessary for increased employment and economic growth. The specific target will be realized through the Development of urban and rural areas priority axis. Relation to other specific ROP “Northeast” targets: The scope and quality of supplied services is directly linked to economic performance and competitiveness. The specific target also deals with regeneration and revival of certain parts of urban and rural areas involving namely the existing unexploited premises and properties to be used for development of the public services offered to the population. These premises can also be used as business incubators for new and developing businesses, training centres, research grounds, public service spots and centres providing space for cultural and other activities of citizens´ interest. The aim is to stabilize the population, increase its level of education and ensure adaptability of the work force with respect to its eligibility and establish conditions for a harmonic and balanced development of the region through an even habitation structure and evenly-spread economic activities. In this sense there is a strong link between this specific target and another specific target defined as “Raising the attractiveness of the region for businesses and investors“ and the related “Development of the business environment“ priority axis.

There is also another close link to the specific target defined as “More effective exploitation of the region’s natural and cultural potential“ and the related “Tourism“ priority axis. The number of visitors to the region and the related number of overnight stays and profit of service providers can be increased by improvements in the physical environment of both urban and rural areas.

Specific target 3: More effective exploitation of the region’s natural and cultural potential So far the big cultural and natural potential of the region has not been fully exploited. There exist tourist centres equipped with basic and associated infrastructure providing a number of cultural, sports and tourist activities, their mutual correlation is missing though. There is no information system to interconnect the very extensive range of existing services. The low standard of lodging and boarding facilities and their low presence in a number of localities, insufficient maintenance of monuments, concentration of visitors in only the well-known tourist resorts, limited range of new or comprehensive tourism -related commodities belong to region’s weak points. The specific target will be achieved through development of the basic and associated tourism-related infrastructure, which will provide for an increased capacity of boarding and lodging facilities. Also the coordinated activities focused on provision of a comprehensive supply of products and services and an effective marketing and creation of new travel-industry-related commodities will contribute to the achievement of the target situation. Achievement of the specific target will boost prosperity of an industry that is based on long tradition in the region and that has a high potential for its further growth. The global target will be achieved through increased attractiveness of the physical environment and provision of favourable conditions for tourism-related business activities. This will prepare the ground for tourism to play an important role in region’s sustainability. The specific target will be realized through the Tourism priority axis. Relation to other specific ROP “Northeast” targets: Improvement to the existing basic infrastructure and enhanced correlation between information and services provision can bring significant multiplicative effects that may further boost the growth of economic prosperity of all entities active in this sphere, involving mainly entrepreneurs and public entities represented by municipal governments in particular. In this sense the specific target has a close link to the improvement of the business environment (this particular ROP “Northeast” priority axis, however, has a different subject and industry focus). Growing prosperity of the travel industry may significantly contribute towards increased employment, stabilization of the population and overall improvement in the economic situation of urban and rural areas in particular. Increased attractiveness of the physical environment and its maximum exploitation for the life of inhabitants and for the elimination of regional disparities is a common theme for not only this respective specific target but also for another one defined as “Improved quality of life and public

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services for the inhabitants with an emphasis on reduction of regional disparities“ and the related “Development of urban and rural area“ priority axis. The travel industry shows also a close link to the specific target defined as “Increased accessibility of the region and higher traffic effectiveness while respecting the natural environment protection“ and the related “Development of the traffic infrastructure“ priority axis, mainly with respect to the provision of preconditions for an increased mobility of the population and subsequently higher number of visitors to localities attractive for tourists.

Specific target 4: Raising the attractiveness of the region for businesses and investors Transformations and restructuring of the Czech economy contributed to economic growth of many companies and industries, however, on the other hand several industries and companies fell into recession or even went bankrupt. This has resulted in many dilapidated and no-longer-exploited industrial properties and premises located in mainly the central parts of urban areas, which are abandoned and considered as an eyesore in the face of municipalities. Another issue relating to the business and employment sphere is the low level of working knowledge and skills of graduates of institutes of education (secondary and vocational schools) that prevents them from getting their first job smoothly. Such situation later triggers unemployment of young people at the very beginning of their professional career and influences negatively their later eligibility for work, work habits acquisition etc. Namely in recent years the demand for products and services of higher level and potentially high value has been growing. This trend escalated the pressure on introduction of innovations into production processes in particular. Innovations have often escaped the focus of the region and there is also no wider collaboration between research and development institutions and the business sector, that makes the exploitation of this sphere’s potential considerably difficult thus reducing the rate of utilization of capacities and causing commercialization of these activities. The specific target will be achieved trough investments in regeneration and revitalization of neglected and unexploited properties and premises and traffic and technical infrastructure of new small industrial zones and their connection to the existing infrastructure. To the achievement of the specific target will also contribute the support of mutual collaboration of education institutions, typically of secondary and vocational schools with labour authorities and businesses aimed at gaining and raising working skills and experience of school graduates in practice, i.e. directly in businesses and in manufacturing and other processes. Also development of activities that are supposed to be concentrated in a form of a single platform providing ground for exploitation of the region’s innovation potential and dealing with activities contributing to a substantial growth of efficiency and competitiveness will help achieve the specific target. The global target will be achieved by means of an enhanced physical attractiveness of properties and premises and industrial zones for investors. Creation of environment comfortable for business development and reinforcement of collaboration between businesses and education institutions will support the rise in qualification of employees being a necessary precondition for growing efficiency and competitiveness of the economy. The growth of innovation activities based on collaboration between the private and public sectors will contribute towards the achievement of the same target. The specific ROP “Northeast” target shall be realized through the Development of the business environment priority axis. Relation to other specific ROP “Northeast” targets: The specific target is linked closely to another target defined as “Improved quality of life and public services for the inhabitants with an emphasis on reduction of regional disparities“ and the related “Development of urban and rural area“ priority axis with respect to the improvement of the physical environment of mainly the central parts of urban areas that is to be based on investments in unexploited and dilapidated properties and premises in order to provide for their further exploitation by businesses or public services providers. There is also a link to the sphere of investments in education- related infrastructure, where a stress is laid on work experience acquirement being a precondition for an easier eligibility of job applicants for the labour market. Business sector’s efficiency and competitiveness based on knowledge and utilization of research and scientific findings becomes vital to the survival of businesses in the global market. Only high-quality and educated work force has a potential to attract investments producing services and products of high added value. Development of collaboration between businesses and education institutions will increase competitiveness and maintain stable employment rate and quality of life of the region’s

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inhabitants. Investments in technical infrastructure will improve physical environment (relation to the specific target defined as “Improved quality of life and public services for the inhabitants with an emphasis on reduction of regional disparities“).

Table No 12: Matrix of global SWOT and strategic ROP “Northeast” targets coincidence

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ob do yv pr at Zv ýši av els t y tvo ef dů a atr ektre pr ra pří akt ivnsp sluo ze ro ivit ostekt že m dn u ov i b na íh re a án ve sni o gio Matrix of global SWOT and strategic ROP re í řej žo vy nu targets coincidence giooc ný vá uži pr nu hr ch ní tí o an do a re ef po y živgio stu ektpo dni živ ot pn nál ivnte ká ot a níc ost kv ostnci ní ní h i alit i álu a ho dis inv Zv u Zv re pr Zl pa est ýš ýš gio ost ep rit ice en disparities of regional on reduction ith an emphasis en nu Increased accessibility of the region and higher traffic higher and region of the Increased accessibility ř protection living environment the respecting while effectiveness e šit the inhabitants for services and public of life quality Improved w and cultural natural of the region´s effective exploitation More potential and businesses for of the region the attractiveness Raising investors SPECIFIC TARGETS í dí í SWOT STRENGTHS SLongTRÁN industrialKY tradition, stable agricultural production and diversification of the manufacturing industry XXX XX XXX Area withtl high-qualitykéh ů livingl environment and significant natural resources including rich underground and surface water res. XXX XXX Attractive area with good tourism development potential consisting namely in potential of natural and cultural-historical attractions and existing basic technical XXX XX XXX XX and tourism-related infrastructure Cultural, social and health service available all over the area and superregional sphere of action of specialized health facilities XXX XXX Increasing level of educated pop. and presence of 5 universities in the reg. incl. techn. studies with scientif. and research potent. for development of innovation X XX XXX businessi č íh Advant. location of metrop. agglomerations, dense road and railw. network XXX XXX XXX Presence of int. public airport in Pardubice and upgraded I. railw. corridor XXX XX WEAKNESSES Presence of economically low performing regions with lack of job opportunuties, stable businesses and high number of deteriorating properties and XXX XXX XXX XXX brownfields

Underdeveloped or even missing technical and traffic-related infrastructure XXX XXX XXX XXX (absent highways and expressways, poor condition of roads and rails) Insufficient traffic accessibility and transp. service in rural areas XX XXX XXX Disproportional intensity of recreation and tourism wrt. the scope of natural, sports and cultural activities offered in the NUTS II North-East,large disproportion XXX XXX XX betw. level of development of indiv. recreat. centres and localities Poor social infrastructure, insuff. provision of civic amenities and insuff. or missing premises for cultural and leisure-time and XXX XXX XX X other social group activit. in rural area Insuff. correlation betw. vocational preparation and labour market and missing technical experts XXX XXX Disturbed liv. environment in industrial and urban areas, particlularly in municipalities with exisiting heavy transit traffic XXX Insuff. exploited tourism-related potential as a result of unsystematic coordination and low promotion XX XXX XXX OPPORTUNITIES Exploit. of geogr. position and attractiveness of the NUTS II North-East for devel. of domestic and foreign business activities XXX XXX Develop. of strategic services, progressive ind. fields of high added value and high-tech industry in cooperation with foreign entities and regional scientific XXX XXX and research platform

Exploit. of natural conditions for develop. and modernizing agricult. and forestry XX XX XX orientedk ji towardsdi new iprogressiveědělt formsí li andt ínatur and landscape protection Supported exploitation of alternative and renewable power resources XXX XXX X XXX Development of new forms of tourism and increased tourists´interest in new specific tourism commodities providing jobs and alternative sources of XXX X XXX XX income Introduction of functional system for tourism-related activities coordination based on mutual collab. betw. regions,public and private sphere, interest and profess.groups X XXX XX Development of combined traffic (construction of multi-mode logistics centre XXX XX in Pardubice, completed navigability of the Labe river to Pardubice, develop. of public airports Development of integrated transportation systems incl.railways modernization and incr. share of public transportation XXX X XXX

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THREATS Growing unemployment resulting from low competitiveness of businesses on the European market XXX XXX XXX XXX Deteriorated region´s attractiveness for investors due to lack of funds allocated to infrastructure, insufficient traffic connection and unprepared development XXX XXX XX XX grounds Low support of science,research and innovations and translation of scientific and innovation findings into practice; insuff. labour productivity growth with negative impact XXX on living standard of the population Delayed completion of regional trunk roads and continuously growing intensity of traffic XXX XXX Disproportion between conditions of living environment protection and demands on area and traffic development, inadherence to the sustainable development policy due to inappropriate economic activities and insufficient landscape cultivation and un- XXX XX XX necessary and incompetent seizure of high-quality land resources Efflux of part of foreign demand due to unsatisfactory services supplied (lodging, boarding, comprehensive tourism-related commodities) and insuff. quality offered XXX XX XXX X by entities dealing in the travel industry Missing system of whole-life education and insuff. attractiveness of job opportunities mainly in the sphere of agriculture leading to increased number and area of problematic XX XX XX regions Lack of funds for maintenance of the scope of public transportation and for development of technical infrastructure including information technologies XXX XXX XXX XXX Generalif č decreaseíhth ofl populationií and deteriorating demographic structure of the population, gradual ageing of the population, rising proportion of old and handicapped people triggered by the unfavourable demoraphic XXX situation Long-term financial resources for tourism are not guaranteed X XXX X Key: Link: X – very weak to weak, XX – medium to strong, XXX – very strong

5.7 Relation of the ROP “Northeast” to superior programme documents

5.7.A Relation of the Regional Operational Programme Northeast to the National Strategic Reference Framework

The strategic target 1 of the NSRR “The Competitive Czech Economy“ is to be achieved through the ROP “Northeast” priority axis 3 “Tourism development“ in terms of the sphere of basic infrastructure and associated tourism-related activities support (3.1) and the support of tourism-related marketing and coordination activities (3.2). A close link can also be traced in the priority axis 4 “Development of the business environment“, in terms of which the revitalization of brownfields for new business activities is to be supported. Support of innovation activities is slightly reflected in the support of infrastructure for introduction of incubators (4.1). The strategic target 2 of the NSRR “An open, flexible and coherent society“ is to be achieved through the ROP “Northeast” priority axis 2 dealing with the improvement in public service infrastructure aimed at education, social and health services. The ROP “Northeast” priority axis 4 “Development of the business environment“ stresses markedly the importance of improved preparation of the graduates for their professions by means of investments in more intense link between the education institutions and businesses (4.2). The strategic target 3 of the NSRR “An attractive environment“ is linked closely with the ROP “Northeast” priority axis 1 dealing with improvement in traffic infrastructure (1.1) and support of an increased number of environment-friendly vehicles (1.2). The next sphere represents the support of integrated transportation systems development (1.2). The ROP “Northeast” priority axis 2 contributes to the achievement of the target by means of investments in public service infrastructure and improvement in public areas. Its link to the ROP “Northeast” priority axis 3 is very weak, it rather represents an indirect impact to be realized through improvements not only in the sphere of tourist marks and bike paths availability, but also in other activities raising the population’s interest in spending its leisure time in the nature. The strategic target 4 of the NSRR “The balanced development of the area“ is to be achieved through the ROP “Northeast” priority axis 1 representing an increased population’s mobility and the related stronger relationship between urban and rural areas. There is a very strong link with the ROP

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“Northeast” priority axis 2, as it is directly focused on development of public service infrastructure and improvements to the quality of public areas in both urban and rural localities. The ROP “Northeast” priority axis 3 contributes towards a balanced development of area by means of development of services raising the employment rate and rural areas´ economy.

Table No 13: Links of ROP Northeast specific targets and priority axes to NSRR priorities

ROP “Northeast” specific targets NSRR priorities ST 1 / PA 1 ST 2 / PA 2 ST 3 / PA 3 ST 4 / PA 4 ST 1 The Competitive Czech Economy Competitive business sector XX XX Support of VaV capacities for innovations X Tourism-related sustainability XX ST 2 An Open, Flexible and Coherent Society Education XX XX Increased employment rate and employability X XX Social solidarity reinforcement XX Information society development Smart State administration ST 3 An Attractive Environment Living environment quality protection and XX XX X X improvement Traffic accessibility improvement X X ST 4 The Balanced Development of the Area Balanced development of regions XX XX XX Development of urban areas XX XX X Development of rural areas XX XX XX XX – Strong link between the NSRR priority and the ROP “Northeast” specific target/priority axis X – Medium to weak link between the NSRR priority and the ROP “Northeast” specific target/priority axis

5.7.B Relation of the ROP to the Community strategic guidelines

The priority 1 of the SOZS “More attractive Europe and European regions for investors and work force“ is linked closely to the ROP “Northeast” priority axis 1 “Development of the traffic infrastructure“. Provision of an efficient, flexible and safe traffic infrastructure (1.1) is a necessary precondition for economic development, increased productivity and, as a result of that, an improved perspective of the regions´ development enabled by simplification of the turnover of people and goods. Traffic infrastructure helps market integration, raises the number of business opportunities and boosts effectiveness. A significant factor contributing to region’s development is the improvement in traffic accessibility (1.2), which simplifies mobility of the work force. Both spheres of the priority axis can directly influence the balance of regions´ development through reinforcement of the relationship between urban and rural areas. Development of traffic infrastructure and traffic accessibility provides the ground for increased amount of investments in the region and for general improvement in the physical environment and life quality. Road traffic safety enhancement represents another major contribution of the priority axis. The priority 2 of the SOZS “Improved knowledge and innovation to growth“ is to be achieved through the ROP “Northeast” priority axis 4 in relation to creation of a favourable environment for establishment of business incubators and subsequent establishment and development of businesses with large innovation potential. The aim is to develop an environment for information creation and sharing, transfer of technologies and investments in human capital. The ROP “Northeast” priority axis is also focused on improvement of correlation and reinforcement of collaboration between businesses and education institutions (4.2), higher eligibility of the graduates for the labour market and thereby a faster spreading of information important for innovations development and productivity enhancement. The SOZS is linked strongly to the ROP “Northeast” priority axis 2 in terms of support of the education-related infrastructure, ensuring the availability of information- and communication- technologies-related infrastructure for education activities that may help acquire information useful for increased productivity, digital management development and society open to social classification. The program-based knowledge promotion bound not only to big towns but also to medium and small towns represents a very significant factor for the knowledge to be spread.

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The priority 3 of the SOZS “Development of more and better jobs“ is to be realized through the ROP “Northeast” priority axis 2 when it comes to support of investments in public service infrastructure, concerning namely investments in creation of physical conditions for development of education activities aimed at qualification acquisition and its further raising and acquisition of new knowledge and skills. These investments will reinforce the education system’s and specialized training system’s efficiency so that the graduates may find it easier to get a better job. Another close link may be found in the area of intervention of investments in health and social services aimed at an optimum and efficient interconnection of the system under which these public services are being provided and their improved quality. The goal is to have a high-quality health care as one of conditions for ensuring higher participation of the working population in the labour market, longer working life, higher productivity and lower cost of health and social care. The SOZS priority has a close link to the ROP “”Northeast” too when it comes to the creation of conditions for reinforcement of collaboration between businesses and schools, so that the graduates can gain their working skills and experience (4.2). Part of the priority called Administrative capacities correlates with the ROP “Northeast” priority axis 5 Technical assistance dealing with creation and maintenance of administrative capacities for the administration of the ROP “Northeast”. „Territorial dimension of cohesion policy“ gets fully reflected in almost all of the ROP “Northeast” priority axes, mostly, however, in the priority axis 2 „Development of urban and rural areas“. The ROP “Northeast” focuses on investments in renewal of selected town districts, regeneration and revitalization of neglected and unexploited properties and premises (brownfields) in order to get the infrastructure necessary for provision of public services both in urban and rural areas built and developed. The aim is to increase the economic and social cohesion and thus contribute towards achievement of balanced development of the region. The necessary part of the ROP “Northeast” based support is the development of cultural and historical heritage for future generations through refurbishment of public areas in both urban and rural localities with a view to improve the living conditions of the population. The support focuses also on the increased safety of the population and on creation of conditions for risk prevention throughout the region’s territory. This shall bring an increased quality of life to the population and new businesses as well as qualified staff to the region and at the same time prevent the population from leaving the rural areas. The SOZS priority links closely to the ROP “Northeast” priority axis 3 „Tourism development“, which is to a large extent focused on the balanced development of the territory and particularly on intensification of economy in rural areas and the related territorial economic diversification. The priority axis defined as „Development of the business environment“ meets the territorial dimension in the sphere of revitalization and regeneration of brownfields and creation of conditions necessary for a region-wide improvement of business-related infrastructure. The territorial dimension of the ROP “Northeast” is fully reflected in an emphasized collaboration of regions on achievement of targets set by the programme document and in exchange of experience and well-proven practices.

Table No 14: Link of specific targets and priority axes of the ROP Northeast to the priorities of the Community Strategic Guidelines (SOZS)

ROP “Northeast” specific targets SOZS priorities ST 1 / PA 1 ST 2 / PA 2 ST 3 / PA 3 ST 4 / PA 4 1. More attractive Europe and European regions for investors and work force Extension and improvement of traffic-related XX X infrastructure Stronger correlation between environment

protection and growth Finding solution to intense exploitation of

traditional power resources in Europe 2. Improved knowledge and innovation : a way to growth Increased and improved investments in X X research and technological development Simplified innovations and supported enterprise XX XX Supported information society open to all XX Better access to funds 3. Creation of more and better jobs More people employed, reduced fluctuation of work force and upgraded social protection systems

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Increased adaptability of work force and XX XX businesses and labour market flexibility Increased investments in human capital by XX XX means of better education and qualification Administrative capacities Assisted maintenance of wholesome work force XX 4. Consideration of territorial dimension of cohesion policy Contribution of municipal governments towards XX X X employment Supported economic diversification in rural XX XX X areas Cooperation Cross-border cooperation Supranational cooperation Interregional cooperation XX XX XX - Strong link between the SOZS priority and the ROP “Northeast” specific target/priority axis. X – Medium to weak link between the NSRR priority and the ROP “Northeast” specific target/priority axis.

5.7.C Relation of the Regional Operational Programme to the National Reform Programme

The National Lisbon programme (the National Reform Programme) feeds the Czech environment with targets set by the Lisbon strategy. According to the EC requirements the National Reform Programme focuses on measures relating to the macroeconomic, microeconomic and employment policies, to be adopted within the coming 3 years and is supposed to help reinforce the political responsibility of individual member states for achievement of targets set by the Lisbon strategy and allow for evaluation of respective reforms carried out on the level of individual member states. The focus integrated in the NPR´s content reflects efforts to concentrate on reforms leading to improved growth potential and employment within the EU providing the macroeconomic framework remains healthy. It is necessary to claim that only minor part of the NPR´s priority measures (accounting for the total of 46) is connected with the program document referring to regional level with these measures being mainly of a national meaning. Also only a minor part of the NPR´s priority measures is linked with interventions funded from the EU structural funds. Unlike the NPR the ROP “Northeast” focuses mainly on development of physical infrastructure and, based on their substance, the activities drafted in the ROP “Northeast” may contribute to fulfilment of the NPR´s priorities indirectly. In certain cases, however, a high-quality physical infrastructure and environment present a key precondition for fulfilment of the NPR´s priority measures. The public ROP “Northeast”-based interventions are neutral towards the NPR´s priority „Macroeconomic stability and sustainable growth“. Measures defined through this priority focus on medium-term financial stabilization of public budgets, pension scheme stabilization and financing of the health care system. Among other spheres under focus are the restructuring of the tax burden and increased participation of employable work force. The ROP “Northeast” -based public interventions are also neutral towards the „Business environment“ priority, which is to be realized through priority measures focused on the assessment of impact of new legislation and reduced administrative burden on the part of businesses, simplified establishment of an enterprise, reinforced creditors´ position during bankruptcy proceedings, functional financial markets and modernization of tax administration. The NPR´s priority „Research and development, innovation“ is to be realized through a support (4.1.) to be provided in order to improve the infrastructure for development of small business incubators as a basis for new business activities sourcing from innovations. Providing the favourable conditions for establishment and development of innovation-based businesses are created, the relevant activities will be emerging and links among cooperating companies possessing potential for region’s development through improved business efficiency and creation of jobs will be established. The NPR´s priority „Sustainable exploitation of resources“ has a positive relation to the ROP Northeast ´s topic Support of schemes improving transportation service in territories (1.2), with regard to the supported introduction of environment-friendly technologies into public transportation and renewal of vehicle fleets with their environment-friendly way of operation taken into consideration.

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The supported sphere of Regional road traffic infrastructure development (1.1), which complements the basic highway and expressway network completion has a very close relation to the NPR priority „Modernization and development of traffic and ICT networks“ . The entire ROP “Northeast” priority axis 1 „Traffic infrastructure development“ contributes towards implementation of the NPR priority „Flexible labour market“ and specifically to its „Increased territorial mobility“ priority measure. Mobility of the work force is one of the basic conditions for reduction of regional unemployment and disparities with respect to economic development of the territory. The sphere of Supported development of collaboration of secondary and vocational schools, other regional education institutions and labour authorities, development of innovative activities in the region (4.2). is also very closely related to the NPR priority „Integration within the labour market“. The priority axis focuses on acquisition of work experience by young people and thus contributes to fulfilment of the NPR priority measure „Reduced number of unemployed people under 25 years of age“. Such activities will also significantly contribute to the fulfilment of the „Supported collaboration among employers, employees and education and specialized vocational institutions“ priority measure falling under the NPR priority „Education“. The ROP “Northeast” priority axis 5 Technical assistance has a cross-sectional relation to the NPR providing that the Northeast Cohesion Region in order to support its priorities will adopt measures leading to both the maximum exploitation of resources allocated from structural funds and increased absorption capacity and effective exploitation of these resources.

Table No 15: Link of specific targets and priority axes of the ROP Northeast to the priorities of the National Reform Programme ROP “Northeast” specific targets NPR priority ST 1 / PA 1 ST 2 / PA 2 ST 3 / PA 3 ST 4 / PA 4 Macroeconomic stability and sustainable growth Business environment X X XX Research and development, innovations X XX Sustainable exploitation of resources X Modernization and development of the traffic- XX X related and ICT networks Labour market flexibility X X Integration within the labour market XX XX Education XX XX XX - Strong link between the NPR priority and the ROP “Northeast” specific target/priority axis. X – Medium to weak link between the NPR priority and the ROP “Northeast” specific target/priority axis.

5.8 Relation of the ROP “Northeast” priority axes to the strategic documents of regions within the Northeast Cohesion Region

The ROP “Northeast” is strongly tied with both existing and prepared regional development strategies and thematic conceptions, which is evident in the contents of priority axis and structure of the supported spheres. The public ROP “Northeast” interventions will become an important program- making tool for achievement of targets and fulfilment of priorities set in all the three regional strategic documents and conceptual materials. The supported spheres and their focus as incorporated in regional strategic documents comply not only with the ROP “Northeast” priority axes but also with other thematically-focused operational programmes being prepared by the Ministries responsible for respective sectors. The focus on improvement of the physical environment in various spheres of public life and the essential impact the physical environment has on social-economic situation in the regions can be traced in all the three strategic documents. Financial resources allocated from structural funds will significantly help solve problematic areas and implement schemes that so far could not have been realized either at all or in a desired scope due to the lack of financial resources. Viewed from the point of a time plan, the perspective of regional strategies and development programs respectively extends beyond the very next program period and financial perspective of the EU (2007-2013).

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Table No 16: Priorities of strategic documents of respective regions and the ROP “Northeast” priority axes

Priorities of strategic documents ROP “Northeast” priority axes of respective regions PA 1 PA 2 PA 3 PA 4

THE HRADEC-KRÁLOVÉ-REGION Business activities and employment X X X XX Human resources XX XX Rural areas and agriculture X XX X X Infrastructure and traffic XX X X X THE LIBERECKÝ REGION Economically strong region with growing living standard of the population X XX X X and balanced territorial development Growing living standard of the inhabitants of the Liberec-Region X X X X High-quality traffic-related and technical infrastructure, optimized transportation service in the territory reflecting the sustainability of the traffic, provision of an access to the region from the outside. Proper XX X X X logistics structure availability and preconditions for allocations of investors in the region. Wholesome natural environment and exploitation of natural resources in X X X X compliance with sustainability principles Growing economic, social and cultural contribution of tourism with respect X XX X to sustainability. Balanced territorial development of rural areas, agriculture and forestry based on sustainability principles and environment protection X XX X X requirements. THE PARDUBICE-REGION Economy X X X XX Availability of technical facilities, traffic accessibility and traffic serviceability XX X X X of the territory Human resources and high-quality of life X XX X XX Rural areas and agriculture X XX X X Living environment XX XX X X Tourism X X XX X Factors (information society development, intensified planning and decision-making systems, introduction and good functionality of regional X X X X statistics and information system, development of national and international partnership, crisis management system reinforcement) XX - Direct link (thematic affinity) X - Secondary link (contribution to other spheres)

5.9 Relation of the ROP priority axes to the Rural Development Programme

The ROP “Northeast” has a strong thematic and territorial relation to the Programme for development of rural areas and specifically to its axis 3 focused on the „Quality of life in rural areas and rural economy diversification“ via the supported sphere 2.3. „Development of rural areas“ and priority axis 3 „Tourism“. Similar supported area in terms of the PRV can be identified in a measure focused on The Tourism support (III.1.3) and Development of Rural Areas and basic services for economy and population (III.2.1). These supported areas concentrate on improvements to tourism-related infrastructure and public properties and areas in order to raise the attractiveness of municipalities for tourists and inhabitants of rural areas.

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The thematic focus of both operational programmes is complemented by a territorial definition representing a division line for public interventions. The border has been set based on an agreement between the Czech Regions Association and the Mze. In terms of the EAFRD the rural development programme will provide support for interventions in renewable agricultural resources, wastewater treatment plants with max. capacity of 2000 equivalent population, local roads and waste treatment worth max. 5 mil. CZK in municipalities with the population of max. 500 and agricultural brownfields (brownfields of agricultural nature) not exceeding the area of 5 ha in municipalities, population of which is max. 2000. The ROP Northeast will provide support to rural development activities concerning the civic amenities and cultural heritage of municipalities with population of at least 500 except for waste treatment and wastewater treatment works.

5.10 Compliance of the ROP “Northeast” -based public interventions with regulations of the EC concerning structural funds and the Community target

5.10.A Coherence of the ROP “Northeast” focus with the regulations issued by the European Parliament and Council (EC)

The ROP of the “Northeast” Cohesion Region satisfies the conditions for exploitation of resources from the European Regional Development Fund in respect of both the GDP rate per person, adopted strategy and focus and contents of individual priority axes and spheres to be supported by the programme. In terms of the, Convergence” the European Regional Development Fund concentrates its assistance on support of integrated regional and local economic sustainability as well as mobilization-based employment and on reinforcement of internal capacities via operational programmes targeted at modernization and diversification of economic structures and via creation and protection of sustainable jobs. The contents and focus of priority axes and areas supported by the ROP “Northeast” are fully compliant with the contents and focus of the European Parliament and Council (EC) Regulation No. 1083/2006 of 11.7. 2006 on general provisions of the European Regional Development Fund, the European Social Fund and Cohesion Fund and on cancellation of the Regulation (EC) No. 1260/1999 and with the European Parliament and Council (EC) Regulation No. 1080/2006 of 5.7. 2006 on the European Regional Development Fund and on cancellation of the Regulation (ES) No. 1783/1999.

5.10.B Compliance of public interventions with the Community target Convergence

The ROP “Northeast” -based public interventions to be funded from both the ERDF financial resources and the national budget of the Czech Republic are in compliance with operations defined by the „Convergence“ target, contents of which is the support of the growth potential of the European regions with a view to achieve higher growth rate. The ROP “Northeast” priority axes focus on development of the physical and human capital as well as economy and social environment of the region. Public interventions in the form of individual areas supported via priority axes of the ROP “Northeast” have been chosen in such a way that the public resources can get exploited effectively and to the largest possible extent with a view to obtain the highest possible yield for the community from implementation of particular activities/schemes supported. The public resources shall be allocated to those areas (see the strategies) where the highest contribution to achievement of the target defined as convergence of the “Northeast” Cohesion Region with the advanced EU regions and countries is expected. The ROP “Northeast” promotes concentration of the maximum possible number of supported activities within the so-called integrated schemes, where the highest effectiveness of invested resources can be anticipated. Public interventions will find a fertile ground in those areas where an effective function of market powers meaning the possible achievement of community benefits just for private money cannot be expected. Co-financing consisting of public and private/public (national) financial resources represents an effective combination ensuring the maximum effectiveness of resources spent. As far as the volume of public resources needed for co-

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financing is concerned, the limit for public resources to be involved in all types of interventions is sufficient for not making the applicants disadvantaged, should they lack their own financial resources. This will ensure that the initiative and motivation of potential scheme holders will be exploited to the largest possible extent.

5.11 Reasons for public interventions within the NUTS II Northeast Region with respect to regions´ competencies

The regions have been established on the basis of the Constitutional Law No. 347/1997 Coll. on establishment of higher territorial self-governing units and on the change of the constitutional law No. 1/1993 Coll. issued by the Czech National Council. Regions represent statutory corporations that possess their own assets and have their revenues defined by law and use their own budgets for performance of their economic activities under conditions defined by legislation. Regions manage their affairs independently. The par. 2 letter d) of the Act on Regions No. 129/2000 Coll. endows the regional government with specific rights, one of which is the right to coordinate the territorial district development, to approve region’s territorial district development schemes under special laws, to provide for their implementation and monitor their performance. At the same time the regions support development of territories defined in the region’s territorial district development programmes in line with their needs (§ 8 of the Act No. 248/2000 Coll.) and in scope defined by § 3 of this law. When performing the State administration the regions are regarded as administrative districts and as such bear a responsibility for executing the powers they have been endowed with. Under § 35 of section 1 of the Act on Regions No. 129/2000 Coll. the regional governments´ competencies involve the competence to make decisions based on the delegated powers but only to extent stipulated in the law. When executing their own and delegated powers, the regions protect the public interest. Activities financed from the NUTS II Northeast Regional operational programme are in compliance with the territorial district development programmes of the Pardubice, Hradec Králové and Liberec- Regions and fall into spheres of supported regional development defined by § 3 of the Act on Regional Development Support No. 248/2000 Coll.

5.12 Absorption capacity of the region

The absorption capacity of the “Northeast” Cohesion Region is based on shared data provided by respective regions for the period 2007-2013. The preparedness of the region for the ROP Northeast implementation was proved by preliminary survey carried out in individual regions. The region is prepared for implementation of schemes corresponding with the ROP “Northeast” focus. More detailed description of the absorption capacity is presented in the appendix to the ROP “Northeast” called Absorption capacity.

5.13 Horizontal matters

In accordance with a general provision and General Strategic Principles of the Community, to horizontal themes have been defined for the 2007-2013 period: equal opportunity (Provision article no. 16), sustainable development (Provision article no.17). These themes are cross-sectional and have been taken into consideration in all four priority axes of the Regional Operational Program Northeast. The fifth priority axes, Technical Aid is neutral with regard to this theme. Generally, these themes are taken into account throughout the management of the Regional Operational Program Northeast, on the one hand in all programming documents – the Operational Manual, Implementation Document, Handbook for Applicants and Beneficiaries, etc. – and on the other hand incorporated into the evaluation process and the choice of projects presented. The goal is to improve the quality of projects presented and to implement interventions with a positive impact in

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these areas. The task of the Management Authority is to diligently monitor the attainment of horizontal themes including deepening knowledge on the part of its employees

Equal treatment of men and women and prohibited discrimination Equal opportunities and prohibited discrimination are the basic democratic principles of social and professional development and represent the basic elements of social dimension of the sustainability. The equal opportunity principle means doing away with discrimination on the basis of sex, race, ethnic origin, religion, handicap, age or sexual orientation. The equal opportunity principle also relates to other disadvantaged groups like migrants, long-term unemployed, persons with minimal qualifications, persons with poor access to transport, drug addicts, released prisoners and recent graduates: generally speaking, groups threatened with social isolation. The ROP “Northeast” Management Authority fully understands and supports the thinking behind equal opportunity. The ROP “Northeast” has been drawn to also include the equal treatment principle in all spheres supported by the programme. The ROP “Northeast” Managing Authority shall, in cooperation with applicants, ensure that projects presented respect these principles. Apart from the primary project goal, applicants will be motivated to consider expanding project activities with projects that impact positively on equal opportunities. Influence of the project on equal opportunities will be subject to an acceptability check. During project evaluation, those projects which are aimed at equal opportunities will obtain a higher point count over those that are positive or neutral to this theme.

The principle of equal opportunities and a ban on discrimination runs throughout the priority axes:

In the framework of interventions directed into Priority Axis 1, “Transportation Infrastructure Development”, emphasis is placed on accessible transport (barrier-free access as well as the possibility of movement within the place itself to make use of necessary facilities, e.g., the WC). Various needs and requirements of disabled citizens, seniors, parents with children and all other population groups with limited mobility, orientation or with some other disability are taken into consideration here. Priority Axis 2, "Development of Urban and Country Areas" contains support for development of the developmental infrastructure and the infrastructures of human resources, health care, social services, education and other areas which create conditions for improvement of the population life quality. Such projects which enable equal access to their outputs shall be favoured here.

The principle of equal opportunities has also been brought into priority axis 3 „Tourism“ and 4 „Development of the business environment“ in the form of creation of equal opportunities for awarding jobs in the newly-rising and developing business sector. Here the applicant implements these principles into the project in an appropriate way and thus improves the quality of the intention and meets equal opportunities goals. Sustainable development Sustainable development is economic growth which harmonizes economic and social progress with total environmental preservation. The environment protection policy of the Community represents a key basis for the creation of content and a focus of ROP “Northeast” -based public interventions. Simultaneously, the ROP “Northeast” Management Authority is bound by Law no.100/2001 of the legal code on the evaluation of influences on the environment in its current version to ensure monitoring of the programmes’ influence on the natural environment and public health.

The link to the environment is obvious from the way the global target and the specific targets were defined. Emphases have been put on preservation and renewal of natural wealth, cultural character and environmental stability of the landscape and better environmental awareness of the population and its involvement in the decision-making process. Applicants/recipients will be asked to declare the environmental impact of their schemes. Projects with demonstrably positive impact shall be given

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preference in the course of project evaluation. Projects with negative impact will be eliminated during the acceptability check.

The goal is to take the area of environmental protection into consideration in the course of overall evaluation and project selection in the process of granting the allocation. It is desirable to support those projects which (aside from their primary focus and purpose) will have a better impact on the natural environment. Potential negative impacts are being closely monitored within the framework of legislative procedures (i.e., EIA) and the influences of the project on the natural environment are determined by the relevant environmental legislation. Close cooperation between the Management Authority and Department of Environmental Protection in individual regions which form the cohesion region will be initiated. Those projects which lead to lowering energy consumption and improved energy efficiency (traffic, buildings, etc.) will be supported in all support areas. Other examples of such projects are projects which respect the principle of energy independence in which, with the help of renewable energy sources (solar, hydro, geothermal energy, biomass) no additional demands on public energy supplies will be made. A further important area concerns projects which plan to limit production of so-called greenhouse gases and other pollutants or involve the use of renewable energy sources.

The priority axis 1 „Traffic infrastructure development“ contributes towards improvement of the environment through support of schemes oriented on reduction of the power-demandingness of the traffic, on increased exploitation of public transportation, on other kinds of transportation (cycling) and on increased proportion of vehicles featuring environment-friendly drive unit in total traffic volume. The priority axis 2 „Development of urban and rural areas“ has the environment topic incorporated in activities focused mainly on regeneration and revitalization of neglected properties and areas (brownfields) and on an increased attractiveness of public areas in municipalities (i.e. green areas).

Priority Axis 3 "Tourism" is tied to improving the natural environment by supporting projects for the renovation and construction of basic and accompanying infrastructure needed for the development of new forms of environmentally-friendly tourism (hiking and walking, bicycle tourism, equestrian and agricultural tourism, ecotourism, etc.).

Regeneration and revitalization of brownfields is contained in Priority Axis 4, "Development of the Commercial Environment". Projects realized in this priority axis of contribute to the improvement of the natural environment by improving the physical state of these properties and their reemployment for manufacturing and services which do not threaten the natural environment. Interventions targeted at the area "Support for the Development of Cooperation with Secondary and Vocational Schools, Other Regional Educational Institutions and the Labour Office, Development of Innovation Activities in the Region" will support projects featuring activities which target maintaining the principle of sustainable development in the socioeconomic sphere as well.

Regeneration and revitalization of brownfields has been incorporated into the contents of the priority axis 4 „Development of the business environment“. Schemes to be implemented in connection with this priority axis will contribute towards better environment through improved condition of the mentioned real-estates and their reuse for manufacturing activities or services provision that will no longer represent a threat for the environment. In interventions aimed at the area "Support for Development of Cooperation with Secondary Schools and Vocational Schools, Other Regional Educational Institutions and the Labour Office", support projects will be prepared containing activities aimed at fulfilling the principles of sustainable development on the socioeconomic level as well. The Managing Body is responsible for effectively monitoring the impact of the Northeast ROP on the natural environment. Monitoring the impact of the program on the natural environment is carried out on the basis of environmental indicators which form components of the ROP Northeast indicator set, and on the basis of environmental criteria which serve to make the impact of individual projects on the natural environment more concrete, while simultaneously serving as information sources for project evaluation. Declaration in accordance with Article 10 of European Parliament and Council Directive 2001/42/EC on Assessing the Impact of Some Plans and Programs on the Natural Environment

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In connection with this directive and with the goal of monitoring significant impacts from ROP Northeast on the natural environment so as to forestall any negative impact, environmental indicators have been made an indivisible component of the ROP Northeast indicator set. These indicators are based on recommendations from the SEA evaluation (Chapter J Determining Monitoring Indicators for the Impact of the Concept on the Natural Environment). In choosing them, stress was laid upon their taking into account all the fundamental impacts of ROP Northeast on the natural environment: influence on air quality especially from the standpoint of transportation, revitalization of brownfields, waste management and the connecting of partner entities into the realization of projects. Claire emphasis was also placed on accessibility to relevant and objective data and being in agreement with current National Index indicators for the program period 2007-2013. The process of monitoring indicators is further described in Chapter 7, Indicators for Evaluation and Monitoring.

ROP Northeast Environmental Indicators

National Index Indicator Unit of measure Source code Exposure of residents to excess concentrations of 65 31 02 % ČMHÚ PM10

Lowered omissions of primary particles and kt/yr (in potential 21 23 00 ČMHÚ precursor secondary particles particle creation)

2 21 11 00 Measured omissions from stationary sources – SO2 000 t./km ČMHÚ

2 21 12 00 Measured omissions from stationary sources – NOx 000 t./km ČMHÚ

21 13 00 Measured omissions from stationary sources – CO 000 t./km2 ČMHÚ

Number of projects aimed at environmentally aware 37 33 00 Count Region transportation forms

Total surface area of revitalized unused or 65 20 00 ha Region abandoned brownfields

22 01 00 Number of waste management projects Count Region

07 42 70 Number of connected partners Count Region

Quantification of overall current values and values presumed for the year 2015 are given in Chapter 7 concerning the ROP Northeast indicator set. The plan for monitoring impacts due to the implementation of the ROP on the natural environment is based upon the supposition that the tools for implementing the ROP are individual projects carried out within the framework of individual support areas. The proposed system takes into account the reality that, in monitoring environmental indicators within the territory of NUTS II, it is marginally difficult to differentiate the impact of ROP Northeast on the natural environment from the impact of other activities/interventions (projects financed from other sources than ROP Northeast) and, at the same time, projects carried out under ROP Northeast may not, for these reasons, be significant influences upon these indicators. At the level of the Managing Body, data are put together using IS MONIT7+ and subsequently evaluated for the entire operating program. The results of the evaluation serve as a basis for efficient management of the program and for monitoring information at the program level, annual reports and the final report. These results will be further made available to all relevant bodies (MV, NOK, EK). The set of environmental criteria serves for making concrete the impact of the project on sustainable development. From this standpoint, it is an important tool for project evaluation. The criteria are of both a quantificational and non-quantificational character. The applicant, in creating a project request, gathers relevant environmental criteria for the project. Non-quantificational criteria include detailed specifications for the project's contributions to sustainable

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development. Quantificational criteria offered by the applicant indicate current and target values which may be realized by the project, including a detailed contextual description. On the basis of the evaluation of the overall contribution, the applicant may prepare the project in such a way as to make it more acceptable from a sustained development viewpoint and fulfill the requirements for sustainable development.

On the basis of selected environmental criteria, the Managing Body or an Evaluation Commission which includes participation by environmental experts undertakes an evaluation of the overall influence on the natural environment. Projects with positive outcomes for the natural environment will be given a point advantage over projects which have a neutral influence on the natural environment. Projects with negative impact are automatically excluded from the administration process.

ROP Northeast Quantificational Criteria

code Title

01 Will the project realized have an effect on lowering greenhouse gas emissions (CO2 equivalents)? tonnes/yr

Will realization of the project lead to a reduction in the mission of the chief polluting substances 02 connected to the activity in question (with a focus on solid particles, SO2, NOx, NH3, volatile organic tonnes/yr substances)?

Will the project contribute to increasing the overall extent of non-fragmented areas? Note: non- 04 fragmented areas are areas larger than 100km2 (fragment limits are set by roads with traffic km2 intensity higher than 1000 vehicles per day and by multitrack railroads)

Will the project contribute to the renewal of a stable of aquatic régime for the countryside and 05 elements of ecological stability? Of the project bring about a surplus or decrease in the area of biodiversity foci? (Note: Biodiversity 07 # ha foci include, e.g., 1st and 2nd NP and CHKO zones, NRP, PR, USES)

08 Is the project contained activities leading to the removal of old ecological burdens? Will realization of the project lead to an increase in the production of energy from renewable 09 GJ sources? Will project realization lead to energy savings? (Compare on the basis of end consumption of 10 GJ energy as defined in the statistical yearbook.)

11 Does the project include the use of recyclables? tonnes 12 Will realization of the project lead to a reduction in hazardous waste output? tonnes 13 Will realization of the project lead to an increase in the green areas at the site? ha 14 Will the project be realized with the use of brownfields? ha

15 Will the project invest in the public transportation system? million kc

16 Will realization of the project result in increased rail traffic? tkm

Will realization of the project lead to a reduction in the number of residents living in areas in which number of 17 noise values are exceeded on the noise map? residents number of products 18 Does the project contained support for environmentally aware products? certified under the project

54 Extent of revitalized brownfields under the project. ha

57 Does the project contribute to the expansion/annexation of green areas at the site? ha

75 Area of regenerated zones for business activities m2

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ROP Northeast Non-Quantificational Environmental Criteria code Title

19 Does the project include environmental training, education and enlightenment?

31 Does the project contribute to the reduction of annexation of agricultural land?

32 Does realization of the project contribute to the limitation of fragmentation of the countryside?

33 Does realization of the project contribute to an improvement in the retention function of the countryside? Does realization of the project contribute to a reduction in the consumption of mineral raw materials for realization of the 34 project? 35 Does the project contribute to a reduction in the production of waste?

37 Does the project contribute to the protection of natural elements in built-up areas?

38 Does the project contribute to an increased number of persons using public transport?

39 Does the project lead to a reduction in the load on commuter and cargo traffic?

40 If the project is realized on the territory of CHKO, is it in accord with the plan for care?

41 If the project is realized on territory belonging to NATURA 2000, is it in agreement with the conditions for preservation?

45 Does realization of the project contribute to energy savings or increased energy production from renewable sources?

50 Does the project contribute to a reduction in noise stress on residents?

51 Does the project contribute to the strengthening of the ecological awareness of residents? Does the project have a positive influence on foci of biodiversity (small-surface ZCHU, greenhouse elements USES, 52 EVL)? 55 Does realization of the project contribute to greater participation in environmentally aware forms of tourism?

56 Will it lead to annexation of forest or agriculture or resources?

59 Is the project aimed at supporting environmentally aware forms of transport?

60 Will the project lead to revitalization or regeneration of the territory?

61 Does the project contain material use of wastes or use of secondary raw materials made from wastes?

Will realization of the project result in minimizing impact on specially protected areas (ZCHU) and territorial ecological 62 stability systems (USES)?

63 Will the project have a positive influence on the natural environment?

64 Will realization of the project lead to the protection and renewal of migration pathways?

66 Will realization of the project lead to a reduction in traffic accidents?

67 Will an environmental management system be introduced as part of the project?

68 Will the realization of the project lead to IDS support?

69 Will realization of the project result in support for the introduction of telematic systems?

70 Will realization of the project result in support for public transport within the transportation services framework?

72 Will realization of the project result in energy savings in the business sector?

Horizontal themes and their fulfillment are an important element of the overall implementation and realization of ROP Northeast. This fact is reflected in the composition of the membership of the Monitoring Committee of ROP Northeast, which includes representatives of nonprofit organizations directly concerned with sustainable development and equal opportunities.

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Contribution of ROP Northeast to the realization of Strategies for Permanent Sustainability of Development.

5.14 Contribution of ROP Northeast to the realization of Strategies for Permanent Sustainability of Development

The activity performed by the Community under the article 158 of the Treaty is concentrated on reinforcement of economic and social cohesion of the enlarged Community, aim of which is provision of support to the harmonic, balanced and sustainability of the Community.15 The ROP “Northeast” as a part of the set of operational documents of the Czech Republic uses its public interventions as its contribution to the sustainability pursuant to the Strategy of Sustainability of the Czech Republic adopted on 8.12. 2004. The ROP “Northeast” provides solutions to problems related to economic, social and territorial disparities consisting in reinforcement of economic growth and competitiveness and employment as well as social integration and environmental quality. The specific targets, priority axes and spheres of the ROP “Northeast” -based support represent public intervention tools that have been formulated in such a way that any lack of balance in mutual relations of economic, environmental and social bases of cohesion is limited to the possible minimum. All priority axes of the ROP “Northeast” fulfil the 3 bases of the region’s sustainability depending on their respective thematic focus. The priority axis 1 „Traffic infrastructure development“ contributes to environmental improvement in terms of sustainability namely through its focus on investments to be allocated to erection and refurbishment of the traffic infrastructure. The priority axis focuses on elimination of unfavourable impact of traffic on the population and the environment. The economic base sources its strength from improved traffic serviceability resulting in increased mobility of work force and the related employment rate. The social base is supported through investments reinforcing the economic self-sufficiency of the population. The realization of the priority axis will improve access to services usually provided in towns (culture, sports a.s.o.). The priority axis 2 „Development of urban and rural areas“ contributes towards sustainability through investments in improvement of the physical environment of urban and rural areas, and thereby also increases attractiveness of rural areas and stabilizes the population living there. These investments support the environmental sustainability base. The social base draws support not only from investments in health, social and education infrastructure but also from interventions aimed at reduced occurrence of social-pathological phenomena and social integration of minority groups into society. Introduction of the sustainability and Agenda 21 principles in the planning and decision-making processes represents one of the important spheres of support. The priority axis 3 „Tourism“ contributes to sustainability through investments in the basic and associated tourism-related infrastructure aimed at provision of an increased economic benefit to rural areas in particular. Part of this priority axis also focuses on tourism in terms of high-quality services and more effective coordination support with a view to exploit the existing potential and achieve economic benefits. These spheres of intervention contribute not only to the economic sustainability base but also to the social sustainability base in respect of increased employment rate. The priority axis 4 „Development of the business environment“ helps sustainability of economy by means of a support aimed at competitiveness of the business sector. The competitiveness of companies has to be also based on the manufacturing of high-quality products with high added value at lower material and power cost. The support provided to education of employees and graduates, which ranks among conditions necessary for the business sector to be competitive and more resistant to the competitive pressures coming from the outside is also linked with sustainability. Attention is being paid to the support of investments in improvement of the business-related infrastructure represented namely by exploitation of dilapidated premises and properties many times hit by ecological damage for the purpose of non-industrial business activities development. Support gets focused on development of services for small- and medium-sized businesses, by means of which such businesses learn how to use the subsidies in order to get a number of their activities improved. The mentioned priority axis contributes to the environmental sustainability base through its support focused on technological development, innovations and exploitation of abandoned properties. The social

15 The Council (EC) Regulation No. 1083/2006 of 11th July 2006 governing the general provisions of the European Regional Development Fund, the European Social Fund and the Cohesion Fund and cancellation of the Regulation (EC) No. 1260/1999.

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sustainability base gets improved through the supported education of employees and employment rate increase. Contribution of the ROP “Northeast” towards the balanced development of the region The principle of a harmonic and balanced development of the region is fully reflected in the whole strategy of the ROP “Northeast”; it has been incorporated in its global and specific targets and eventually also in definitions and namely in the contents of particular priority axes /activities. The ROP “Northeast” as a conceptual document has a clear thematic relation to the NRP/NSRR, specifically to the priority axis Balanced and harmonic territorial development of the Czech Republic, which is focusing on balanced development of regions and urban and rural areas. The ROP “Northeast” takes into consideration the principle of harmonic and balanced development, thus being compliant with the policy of the Community emphasizing the economic and social cohesion of all regions. The territorial dimension of the economic and territorial cohesion policy of the Community contained in the SOZS presents a crucial factor contributing towards prevention of the negative trend of unbalanced regional development, which at the end very strongly influences the growth potential. The principle of balanced territorial development is fully reflected in the ROP “Northeast” priority axis 1 „Traffic infrastructure development“ being focused on improved traffic accessibility and serviceability of the region. The aim is to improve the existing traffic connection of the region in order to provide for development of both the areas with high concentration of economic and social activities and the areas with low economic activity as well as the border areas. The priority axis 2 of the ROP “Northeast” „Development of urban and rural areas“ is focused on improvements to the physical environment of urban and rural areas as a condition for stabilization of population based on higher quality of its life resulting there from. The entire region’s territory is perceived to be important, which is also expressed in the name of this ROP “Northeast” priority axis. An important activity falling under this priority axis is provision of assistance with introduction of the Agenda 21, which concentrates on bringing more quality to the regional development planning process and on promoting more effective exploitation of the region’s potential. The priority axis 3 „Tourism“ contributes towards the balanced development of the region through activities that largely focus on rural areas where tourism is considered to be a significant source of economic benefit representing higher revenues for businesses, local governments and tourist destinations and their operators. That is why tourism belongs to significant instruments used for stabilization of economic activities and population. The priority axis 4 „Development for business environment“ contributes to balanced development of the region through support provided to activities aimed at stimulation of economy and employment in areas where zones reserved for business development or potentially unexploited properties and premises are available. Stabilization of work force by means of collaboration between businesses and schools falls under the focus of this priority axis as well.

5.15 Contribution of the ROP “Northeast” towards the urban area

Urban areas and bigger towns play a key role in the region’s development. They usually represent powerful and natural centres accumulating functions significant for development and functioning of the entire region. They represent not only administrative centres and centres of cultural and social events but also employment centres and work force and human capital concentration points being regarded as the main source of economic growth and efficiency, thus contributing significantly to growing competitiveness in wider surroundings and in the entire region. The towns report higher rate of employment in the tertiary and quarterly spheres thanks to concentration of municipal functions and usually achieve higher level of education and lower unemployment rate. The revitalization and regeneration of brownfields, conflicts of economic, social and environmental interests, urban area’s attractiveness, traffic jams and overloaded traffic capacities of towns, negative impact of social- pathological phenomena and crime rate and other issues are specific to the Northeast Region’s urban areas. Towns and urban areas usually represent a complex set of functions and therefore the solution of their issues, structure and regeneration necessitates a comprehensive and integrated approach that is being dealt with by the ROP “Northeast” through its priority axis 2 „Development of urban and rural areas“. The ROP “Northeast” contributes towards the development of urban areas mainly through the contents and focus of the areas of intervention 2.1. „Development of regional centres“ and 2.2. „Development of towns“. These areas of intervention deal with activities focused on support of both

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the investments in urban areas and their stability in terms of the sustainability (regeneration and revitalization of brownfields, refurbishment of selected town districts) and investments in development of human resources potential being regarded important for intensification of economic efficiency of towns (development of school system, education infrastructure and health and social infrastructure). The ROP Northeast also contributes towards development of urban units through supported activities dealing with introduction of sustainability principles. The urban areas are characterized by their specific issues being different from those of rural areas. Therefore, the ROP “Northeast” tackles this specificity through other priority axes too. Among other things, the priority axis 1 „Traffic infrastructure development“ involves activities focused on the support of elimination of undesired impact of traffic on both the population and the environment with another activities being focused on introduction of integrated transport systems and development of municipal public transport systems. The 1.3 Development of regional airports in Liberec, Hradec Králové and Pardubice represents a support focused entirely on urban areas. The priority axis 3 „Tourism“ contributes towards development of urban areas mainly through the supported sphere 3.1. Development of basic tourism-related infrastructure and associated activities focused on support of revitalization of cultural-historical and technical monuments, modernization and capacity-increase of the basic tourism-related infrastructure and renewal and development of associated infrastructure for tourism. The priority axis 4 „Development of business environment“ deals with reinforcement of urban areas and towns through the supported sphere 4.1. „Supported development of business infrastructure“ involving activities focused on investments in traffic and technical infrastructure of industrial zones and revitalization of brownfields for development of business activities and incubators.

5.16 Partnership process

Processing of the ROP “Northeast” document was based on cooperation of all key regional players within the Northeast Cohesion Region. In the region there were established working groups consisting of representatives of regional authorities, economic and social partners present in individual regions structured by the thematic areas/priority axes. The role of the thematically-focused working groups was to collect suggestions and comments regarding the processing of respective parts of the ROP “Northeast”, to judge the contents and focus of priority axes and concrete public interventions with a view to get a feedback from potential recipients. The document production coordinator was the so-called “ROP team”, which determined the main direction of the work and the contents of its individual chapters and approved individual steps throughout the course. The team acted as mediator for communication between those working on the document and other actors representing departments of the regional authorities, an ex-ante assessor, SEA processor, etc., who were able to actively comment on both the analytical and proposal parts of the program. The highest-level coordination body for programming and preparation of ROP “Northeast” was the Workgroup for Programming and Preparation of ROP “Northeast”, composed of high-level representatives of the following partners: o the regions in the framework of NUTS II Northeast, o regional authorities in the framework of NUTS II Northeast, o cities and municipalities, o regional development agencies, o universities and institutions of higher education, o chambers of commerce, o employers’ associations, o nongovernmental nonprofit organizations active in the area of human resources development, the natural environment and tourism, Further key members of the working group were representatives of the ministries, namely MMR and MF. The Working Group for Programming and Preparation of ROP Northeast served as an umbrella group for four specialized working groups, whose activities were targeted at four areas: Transport and Transportation Infrastructure, Regional and Local Development, Tourism and Development of the Business Environment. These workgroups also featured as members representatives of NNO, among whom were, e.g., the Citizens Advisory Centre (Občanské poradenské středisko, o.p.s.), Hradec Králové; the Coalition of Nongovernmental Organizations of Pardubice (Koalice nevládek Pardubicka), Chrudim; the Club of Czech Tourists (Klub českých turistů), Pardubice and the Český

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Ráj Tourist Region (Turistický region Český ráj), Turnov; these groups had the same opportunity as other members of the working group to express their opinion about the ROP NUTS II “Northeast” proposal. The area of activity of some of the NNO members taking part falls into the sphere of horizontal themes, i.e., equal opportunities for men and women, and sustainable development. The following table contains a list of partners connected with program creation in the area of specialist working groups:

Specialization and Title of entity Type of entity focus Královéhradecký kraj Regional administration ORLOBUS, a.s. Transport provider Contributory organization of the Správa a údržba Hradec Králové Region for highway silnic Královéhradeckého kraje administration and maintenance Contributory organization of the Krajská správa silnic Libereckého kraje Liberec Region for highway Transport and administration and maintenance Transportation Administrator of state owned highways Infrastructure Ředitelství silnic a dálnic ČR and roads KORID Transport provider Pardubický kraj Regional administration Dopravní podnik města Pardubic Transport provider Contributory organization of the Správa a údržba silnic Pardubického Pardubice Region for highway kraje administration and maintenance Statutární město Hradec Králové Municipal administration Občanské poradenské středisko, o.p.s. NNO - equal opportunities Zdravotnický holding Healthcare facilities provider Královéhradeckého kraje Svaz města a obcí Association of cities and municipalities Regional and Local Obec Koberovy Local administration Development Statutární město Liberec Local administration Liberecký kraj Regional administration Město Svitavy Local administration Obec Čepí Local administration Koalice nevládek Pardubicka NNO Statutární město Pardubice Local administration Liberecký kraj Regional administration Municipal/business special-interest Euroregion Nisa group Tourism Město Turnov Local administration Pardubický kraj Regional administration Klub českých turistů Pardubický kraj NNO - tourism Hotel Euro Pardubice a.s. Tourism service provider Regionální hospodářská komora Chamber of Commerce severovýchodních Čech EPIS, spol. s r.o. Business entity - information agency Královéhradecký kraj Regional administration Development of the Liberecká informační společnost, a.s. Business entity - information agency Business Liberecký kraj Regional administration Environment Regioinfo spol. s r.o. Business entity - information agency State agency for the support of CzechInvest business development Město Moravská Třebová Local administration CPN spol. s r.o. Commercial entity

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The focus of the intervention was also discussed with representatives from other administrative bodies in such a way that potential overlaps were eliminated between regional and thematic operational programs. The position of the regions was coordinated in negotiations with the ministries through the mediation of the Association of Regions of the Czech Republic. A very important task in the process of creating ROP “Northeast” was undertaken by the Management and Coordination Committee which coordinated the process, the targeting of issues and the contents of all operational programs with a goal of balanced support for individual regions, and thematic areas of support falling under the competency of individual administrative bodies of the operational programs. The program document proposal underwent public hearings (the latest in August 2007) and, as part of the hearing process, was discussed at workshops in the region. The program document proposal was made public on the internet pages of the Regional Council, along with an invitation to send in feedback. The goal of all the consultations and the public comment process was to align the comments made with the requests of the contractor, as well as with the goals and priorities of the EU and the Council and Parliament of the EU as concerns potential financing of concrete activities from the structural funds. Another important factor in the process was the linkage between the program document and the goals and measures of the national strategic documents, NSRR and other operational programs of the ČR. Through the course of the entire comment process (both in the context of the activities of the above indicated working groups and the public comment process) the chief participants were regional governments, cities and municipalities throughout the region, public transport providers, voluntary associations of cities and municipalities, highway and road administration, the Chamber of Commerce, tourism service providers and others. Among the most frequent requests: o support for ecological variants of public transport including support for cycle paths in cities (accepted) o support for local roads in cities and municipalities (only partially accepted in connection with other activities aimed at regenerating, revitalizing and increasing the security of the environment in cities and municipalities) o support for measures aimed at increasing the security in cities and municipalities (partially accepted, ruling out support for an integrated emergency response system) o support for building and reconstructing water mains and canalization, including ČOV (not accepted for reasons of overlap with the Program for Rural Development) o financing of infrastructure for cycle tourism (accepted and placed on the priority axis devoted to tourism) o placing company in the category of authorized beneficiaries in the framework of supporting cooperation between firms and secondary schools (not accepted) o support for construction of new business properties (not accepted) An interdepartmental comment process on the version of ROP “Northeast” presented to the government took place from 10.-23.10 2006. In comments from the Association of Cities and Municipalities, there was a request, among other things, that support for local roads be placed in ROP “Northeast”. The controlling body of ROP “Northeast” partially accepted this request – support from ROP “Northeast” is directed mainly at highways in Class II and III networks, preferably tied to the TEN- T network. Local roads will not receive blanket support, rather their support will be strictly tied to other activities aimed at regenerating, revitalizing and increasing the security of the environment in cities and municipalities. Individual ministries warned of the threat of overlap with operational programs; these comments were dealt with in cooperation with individual managing bodies – see Chapter 5.16, Coordination with Thematic Operational Programs. Some comments were concerned with other areas which also deserve support from the Northeast region, like business, projects realized via PPP, research and employment of novel technologies and regeneration of housing estates. These activities, however, were not included in to the strategy for ROP Northeast for the reason that these activities are included in other operational programs or because of their incompatibility with support from the structural funds. The remaining comments were of a more or less formal or technical character and, if relevant, were integrated into the program document. The program document was also available to the public in the context of the SEA inquiry process. No significant comments were raised as a part of this process.

The ROP “Northeast” was processed in response to the request of the Applicant – the Regional Council of the NUTS II Northeast Cohesion Region – to process program document upon which the region will become eligible for subsidy from the EU structural funds to be used for realization of the

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main development priorities of all the three regions. The ROP “Northeast” was processed by the following three regional agencies: Centrum evropského projektování /the European Projecting Centre/ (for the Hradec-Králové-Region) charged with processing and coordination of the entire processing procedure, Agentura regionálního rozvoje, spol. s r.o. /the Regional Development Agency, ltd./ (for the Liberec-Region) and Regionální rozvojová agentura Pardubického kraje /the Regional Development Agency of the Pardubice-Region/. These agencies have cooperated closely with representatives of respective sections of their Regional authorities as well as with representatives of other agencies and organizations (e.g. CzechInvest).

5.17 Cross financing

ROP NUTS II is primarily targeted on the support of investment projects. Based on Art. 34, par. 2 of General Regulation it is however possible to assert a so called cross-financing, i.e. to support also activities falling into the area of aid from ESF should the measures be necessary for a satisfactory implementation of the project and are directly related to it16. In this way the cross-financing will complementarily provide for initial realization and course of projects activities otherwise aided from ESF in a close linkage to the building of infrastructure.

Pursuant to Article 34 of the Council Regulation the cross-financing can be applied up to a maximum of 10% of Community funding (i.e. resources from the EU budget) within the framework of each priority axis. MA of ROP Northeast decided to reduce the amount of aid provided within the cross-financing and decreased the limit to 9% in accordance with Methodics on cross-financing in the programme period 2007 – 2013 released on the national level.

Cross-financing can be in ROP NUTS II Northeast applied in Priority axis 2 – Development of Urban and Rural Areas, in Priority axis 3 – Tourism, and in Priority axis 4 – Development of Envtrepreneurial Environment only in a complementary manner to a maximum amount of 9% of Community funding. The limit was set up on the basis of the Methodics on cross-financing in the programme period 2007 – 2013 and its establishment is fully in the competence of MA ROP NUTS II Northeast.

A detailed enumeration of activities aided within the framework of cross-financing to the level of priority axes 2, 3 and 4 is presented in Chapter 6 of the Programme document, and to the level of individual areas of intervention it is presented in the Implementing document.

With the provision of cross-financing, the need of using the instrument will be examined in each individual case as well as its only complementary character and the amount of cross-financing with respect to total public eligible expenditure within the priority axes 2, 3 and 4. Prerequisite for the approval of cross-financing is the necessity of the given activity for a satisfactory implementation of the project. Managing Authority may decide about the application or non-application of cross-financing in a given call. Procedure with the application of cross-financing will be strictly in line with the "Instructions for cross-financing for the programming period 2007-2013" issued on national level so that relevant provisions of the EC regulation are adhered to.

More detailed description of aided activities within cross-financing at a level of individual priority axes

16 Fundamental legislative regulations for cross-financing are as follows: - Article 34 of the Council Regulation (EC) No. 1083/2006 of 11 July 2006 on general provisions about the European Fund for Regional Development, European Social Fund and Cohesion Fund, and about abrogation of the Regulation (EC) No. 1260/1999 - Article 8 of the European Parliament and Council Regulation (EC) No. 1080/2006 of 5 July 2006 on the European Fund for Regional Development, and abrogation of the regulation (EC) No. 1783/1999 - Article 3 of the European Parliament and Council Regulation (EC) No. 1081/2006 of 5 July 2006 on the European Social Fund and abrogation of the Regulation (EC) No. 1784/1999

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5.18 Possibilities of PPP in the ROP „Northeast“

The partnership of public and private sector might, under some conditions, be of great interest for the public sector, especially for preparation and implementation of infrastructure projects. Principal advantages of PPP for public sector are following: • saving of public resources • possibility of increased volume of investment ( leverage effect) • better "value for money" due to private sector' s experience • reduced length of the construction periods • high technical quality of projects • lower level of risk for public sector since some risks are transferred to private sector

PPP projects are not necessarily profitable for public sector. Therefore, to ensure successful use of PPP and to reduce economic risks, public authorities have to focus on several aspects: • to use right PPP model • to encourage competition among prospective private partners • to protect public interest • to guarantee viability of project without any undue profit resulting from public subsidies

The experience in PPP for the realisation of infrastructure projects is limited in the Czech Republic. Moreover some doubts exist whether the related legal framework is sufficiently developed. Therefore Ministry for Regional Development shall lead activities concerning creation of appropriate legal base for PPP projects. This base shall be introduced by the end of 2008 at the latest.

The CR MRD elaborated (pursuant to the Government Decree No 536/2007) the detailed Methodological interpretation of the “Concession Contracts and Concession Procedures Act No 139/2006 (Concession Act)”, as an important aid for the whole process of the PPP projects preparation and implementation; it can be applied namely by regions, cities and municipalities. According to the above Decree, the CR Ministry of Finance prepares partial methodologies for the areas of taxation and finance. In the year 2008 the Czech Republic will thus have a complete legislative and methodological framework for the preparation and implementation of the PPP projects. In 2008, the Ministry of Regional Development will prepare studies identifying types of projects within individual Operational Programmes that would be eligible for the application of the PPP method. Such studies and activities will be supported from the OP Technical Assistance. The first task of Managing Authorities of ROPs, to promote PPP projects, will be in dissemination of the above mentioned information and reports to prospective final beneficiaries in the form of workshops, seminars, conferences, publications, etc. Managing Authorities of ROPs will as well, by December 2008 at the latest, launch call for proposals to support of PPP projects preparation. Technical assistance will be at disposal to final beneficiaries who will plan to introduce PPP projects proposals. Prepared PPP project proposals will be submitted in the course of calls for proposal launched within priority axis or areas of intervention appropriate to the project. The fundamental target of all ROP' s will be to carry out as many PPP projects as possible in the programming period 2007-2013. These projects will create positive experience and it is expected that this will create positive dynamics for other partnerships of this type. When considering implementation of a particular project through partnership of public and private sector it will be inevitable to prevent undue profit and to preserve equal and transparent approach while respecting national and Community law. This applies especially to the area of public support.

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5.19 ROP “Northeast“ cooperation with thematic operational programs

1 Coordination at the NSRR level In keeping with a general provision, the ČR has defined basic institutions for directing and coordinating the NSRR: • National Authority for Coordination • Monitoring Committee – MCC • Payment and Certification Body – National Fund • Auditing Body – Central Harmonizing Unit for Financial Control

The Ministry of Regional Development was appointed the National Coordination Body (NOK) of the NSRR in a governmental decision dated 22.2.2006 (Provision no.198). Its competencies are based on Law no. 248/2000 of the legal code on support for regional development. A special unit has been established under the Ministry of Regional Development which carries out coordination of support from SF and FS. It is responsible for the overall coordination of the NSRR and is the official partner of the EC in dealing with implementation questions touching on economic and social cohesion as a whole.

NOK is responsible especially for:

- releasing of new instructions and methodology obligatory for all the managing authorities, especially in the area of managing, implementation, monitoring, evaluation, data collecting and its electronic interchange, setting and processing of the monitoring committees - supporting of the development of institutional and administrative capacities, knowledege and skills of the staff engaged in implementation of the programmes - ensuring of the determination of the basic criteria fot the project selection for fulfiling of four strategic goals of the NSRF; these criteria are to be encorporated into the single operational programmes - ensuring of the functioning of the working group for evaluation, whose members are, besides a national coordinator, some workers of the managing authorities - ensuring of the fully integrated and unified monitoring system on all the levels of implementation, which ensures all the data needy for the managing, monitoring, and evaluation of the programmes and projects - guaranteeing of the information flow between European Commission and all the managing authorities - condition-making for evalution of all the control mechanisms - supervising over the respecting of the rules given for state aid (and regional aid) regulated by the relevant European and national directives - developing of the methodology for requirements on the applicants and methodology on eligible costs, - developing of the methodology for stating of the indicators and for monitoring of their fulfilment - managing and coordination of monitoring of fulfilment of the horizontal themes – e.g. equal opportunities for men and women - ensuring of the fulfilment of the tasks on informing and publicity on the national level of implementation of the ESC and coordination of activities of the managing authorities in this field - presenting the proposals of the system measures to the government, especially in cases of the low performance in exploiting of the financial aid, objectiv obstructions of its realization, potentional unfulfilment of duties emerging out of the directives - coordination and participation on creating of annual reports presented to European Commission - ensuring of other reports, including a parto of NPD devoted to the support of the Lisbon strategy via EU funds - presenting of the strategic reports on progress

The role of the NSRR Monitoring Committee is provided by the Management and Coordination Committee (ŘKV), established by the Ministry of Regional Development (MMR) on the basis of Law no. 248/2000 of the legal code concerning support for regional development. The role of the ŘKV in

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the 2007-2013 period has been specified by Resolution no. 245 of the Government of the ČR, dated 2.3. 2005.

For the implementation of aid from SF and FS, a unique PCO was set up which is a division of the National Fund of the Ministry of Finance. The executive function of the Auditing Body (AO) is provided by the Ministry of Finance, in particular the Central Harmonization Unit for financial control.

The coordination of all aspects of the implementation system falls entirely under the aegis of MMR – NOK. Other important coordinators in the area of methodical management of financial flows and financial oversight are the MF – PCO and AO. At the national level, the ŘKV is the mechanism for ensuring broader coordination in participation not only by bodies connected with implementation but also by economic and social partners.

In agreement with its Statute, the ŘKV shall especially: • discuss and recommend financial and material changes in approved operational programs, • discuss proposals and changes in procedural approaches and rules for the realization of economic and social cohesion policy, • coordinate system-wide measures necessary for the realization of economic and social cohesion policy (monitoring and information system, institutional structure, etc.).

2) Cooperation at the ROP „Northeast“ level

2.1. Cooperation between MV ROP „Northeast“ and other monitoring committees

Monitoring committees from all seven ROPs will strive to coordinate appointments and meeting locations within their possibilities with an eye to ensuring the most fluent information flow. Tight connections between the managing bodies of the ROP and MV IOP are presumed. The ŘO IOP is represented on the monitoring committee of the ROP „Northeast“ and reciprocally ŘO ROP „Northeast“ on the IOP monitoring committee. The MD, MF, MZe representative is also a member of MV ROP „Northeast“.

2.2 Cooperation between ŘO ROP „Northeast“ and other management authorities

Close cooperation between the ROP „Northeast“ Management Authority and other management authorities is necessary to ensure fluent information flow, strengthen synergy, avoid overlap and ensure the most effective use of SF and FS.

Coordination between individual operational programmes is described in the National Strategic Reference Framework. Based on agreements with MA IOP, OP D and programmes ESF (OP LZZ and OP VK) the cooperation is deepened so that a very close cooperation and synergic effect of activities implemented within these programmes are ensured. This is why the agreements specify and extend the form of cooperation. It is first of all a joint procedure in the call for proposals within individual operational programmes and a mutual cooperation in areas in which coordinated advancement and mutual information about preparation and implementation of individual activities are desirable.

Cooperation with management authorities of other ROPs and the ŘO IOP is key for ROP „Northeast“. NOK will provide the coordination role at the department managing director level.

Another important partner for ŘO ROP „Northeast“ in particular is ŘO OP D, ŘO OP ŽP, ŘO OPPI. Cooperation is carried out at the department director– management authorities level with NOK as the coordinator.

Coordination and cooperation are assured between the Managing Authority of the Rural Development Program, EFF and operational programs of the cohesion policy – by the MMR department coordination group at the central level. This group puts at the disposition of all managing authorities a database of all projects in individual programs.

3. Coordination of ROP „Northeast“ with individual operational programs

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3.1 Coordination with IOP

An agreement for mutual cooperation and coordination in the implementation of the Integrated Operational Program and Regional Operational Programs (ROPs) was made between the Regional Councils of all seven NUTS II cohesion regions and IOP. In accord with this agreement, representatives of ŘO IOP will take part in monitoring committees of ROPs and representatives from ROP managing bodies will be reciprocally present in IOP monitoring committees. The indicated managing bodies will work together in preparing selection criteria, announcing auctions, choosing projects, communicating information about selected projects and other areas, with an eye toward improving coordination, boosting program effectiveness and ensuring the greatest possible synergistic effect.

For coordination of ROPs with IOP, the following mechanisms have been set up:

A) Monitoring Committee –representation of MMR in ROP monitoring committees and reciprocal representation of ŘO ROP in IOP monitoring committees will create the highest level of coordination between IOP and ROPs.

B) Coordination Committee Strategic goal 4 of the NSRF – the Balanced Regions Development This coordination Committee will be a platform for mutual consultation on selection criteria, specification of boundaries, preparation of invitations and informing applicants between ŘO ROP and ŘO IOP. MSC2007 as intermediary will ensure that ŘO ROP and ŘO IOP have access to information about the projects chosen to be carried out under both operational programs. Apart from this, working groups which will ensure coordination of the implementation of midterm national strategies in the Smart Administration area (representing MV, MPSV, MMR and the regions) and in the area of travel (representing MMR and the regions) will be established under this coordination committee. This Coordination Committee will at the same time provide for coordination between ROP „Northeast“, IOP and Prague - Competitiveness.

The IOP managing body in cooperation with the managing body of the Regional Operational Program ensures that activities realized within the IOP framework do not duplicate the ROP activities, i.e., that the same type of activity will not be realized for the same target group.

C) The working group for intervention by ROP „Northeast“, IOP and EAFRD (composed of ŘO ROP „Northeast“ and the SZIF, MZe, MMR workplaces).

D) Factual and territorial definition of intervention IOP and definition of beneficiaries 1) Intervention Area 3.2. – Public health services a) Providing medical technology - IOP will support acute care centres in selected national networks – these centres will be specified by MZd in terms of specialization and location in selected hospitals. ROPs will support complementary investments tied to the development of these centres and further provision of medical technology in other healthcare facilities or parts of healthcare facilities which will not belong to these networks. b) Projects for the prevention of health risks – IOP will support projects realized by state healthcare institutions and health insurance companies and national or supra-regional NNO projects. ROPs will support projects for the prevention of health risks of regional significance.

2) Intervention Area 3.1. – Social integration services a) The transformation of residential social facilities – IOP will involve itself in pilot transformation projects, namely the above specified residential facilities chosen in cooperation with MPSV and the regions. ROP „Northeast“ will complement this by dealing with the infrastructure of social services. b) The return of members of the most threatened and socially excluded Roma localities back to the labour market and into society will be dealt with within IOP using a project system aimed at the most threatened localities, which will chosen on the basis of special studies. These are localities in which there has been a failure identified of the tools utilized at the local and regional levels. ROPs may intervene via the social service infrastructure or via combined interventions employing integrated urban development plans in other localities not specified within IOP. c) Promoting and realizing the tools of social economics – innovative approaches to the development of the social economy will be developed within IOP, while ROP „Northeast“ supports well tried and

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legislatively managed procedures like protected workshops. These types of interventions will be specifically labelled by the ROP „Northeast“.

3) Intervention Area 5.1. – National support of potential of cultural heritage utilization a) The establishment of national cultural heritage centres. The Minister of Culture as an IOP intermediary will prepare proposals for specific centres, with the decision approved by the regions. b) Realization of example projects and the building of infrastructure for modern cultural services. The Minister of Culture will prepare a list of historic sites which will be supported by the IOP. This list will be approved by the region, in which these sites are located. ROP „Northeast“ will follow this with thematically and locally specific invitations to present projects in the area of tourist development (if necessary also in other areas, such as transportation infrastructure and capacity) which are focused on activities complementary to projects supported by the IOP.

E) Regions’ approval of projects presented by the IOP. In the areas of social integration, public health and culture the ŘO IOP will request regions’ approval of projects proposed for realization within the IOP.

F) Urban integrated development plans One condition to get support for housing from IOP will be inclusion of the support into urban integrated development plans. These will be processed by towns for zones fulfilling criteria mentioned in article 47 of Coucil Regulation No 1828/2006 (e.g. chosen problematic housing estates with more than 500 flats, approximately 1,300 inhabitants within towns over 20,000 inhabitants).

3.2 Coordination with the Transportation (hereinafter “OP D”) An agreement for mutual cooperation and coordination in the implementation of the Integrated Operational Program and Regional Operational Programs (ROPs) shall be made between the Regional Councils of all seven NUTS II cohesion regions and OPD. In accord with this agreement, representatives of ŘO OPD will take part in monitoring committees of ROPs and representatives from ROP managing bodies will be reciprocally present in OPD monitoring committees. The indicated managing bodies will work together in preparing selection criteria, announcing auctions, choosing projects, communicating information about selected projects and other areas, with an eye toward improving coordination, boosting program effectiveness and ensuring the greatest possible synergistic effect.

A) Monitoring Committee The MD is represented in the ROP „Northeast“ Monitoring Committee. In this way, access of the ŘO OPD to project selection criteria determination in ROP „Northeast“ is ensured along with reports on the course of ROP „Northeast“ realization.

B) Providing information To inform the MD of the ČR, ROP „Northeast“ Management Authority will provide it with documentation for applicants which will focus on the area “Support of Renewal of Vehicles of Public Mass Rail Transportation”. This will always be done prior to making the particular invitation public. MSC2007 as intermediary will ensure that ŘO ROP „Northeast“ and ŘO OPD have access to information about projects selected for realization in both operational programmes and to reports on the course of the operational programmes’ realization.

C) Consultation ŘO ROP „Northeast“ will take advantage of expert consultation with the MD in the process of determining the technical conditions for selection of rail vehicles.

3.3 Brownfields – coordination with OP ŽP and OP PI The following coordination mechanism for dealing with the area of brownfield regeneration and old ecological burdens is agreed between ROP „Northeast“, OP ŽP and OP PI:

A) Solution for old ecological burdens

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• The Ministry of Environment (MŽP) will be informed in advance about brownfield regeneration projects presented to ROP „Northeast“ and OP PI. MŽP will inform ŘO ROP „Northeast“ or OP PI whether the project presented contains a serious old ecological burden which will be deal with by OPŽP, or which may be dealt with by ROP „Northeast“ (OPPI). This mechanism functioned between OPI and OPPP in the prior programming period. • MŽP will provide ŘO ROP „Northeast“ and OPPI, if necessary, with the information from a database of old ecological burdens whose mapping is being carried out by the MŽP.

B) Providing information • Management authorities will mutually inform each other of prepared invitations in the area of old ecological burden elimination (OPŽP) and brownfield regeneration (ROP, OPPI) • MSC2007 as intermediary will ensure that ŘO ROP and ŘO OPŽP and OPPI have access to information on projects selected for realization in these operational programmes and to reports on the course of operational programme realization.

C) Factual definition of interventions The factual boundary of brownfield regeneration is agreed between ROP „Northeast“ and OPPI based upon the future use of the area: - The PI Operational Programme will support regeneration of brownfields whose future use will be primarily for commercial purposes (future property use will be the responsibility of OKEČ: 15-37 or will concern strategic services or technology centres) - ROP „Northeast“ will support regeneration and revitalization of other types of brownfields on condition that individual invitations will be focused on specific area of use. - In relation to EAFRD, ROP „Northeast“ and OP PI will not deal with regeneration of brownfields for future agricultural use.

The role of ŘKV and NOK is key for coordination with other programmes.

3.4. Coordination with the Operational Programs for Human Resources and Employment (OP LZZ) and for Education for Competitiveness (OP VK) ROP „Northeast“ will support infrastructure necessary for the realization of both these operational programs. Intervention in the framework of ROP SV, OP LZZ and OP VK is thus mutually complementary. The subject of this close mutual cooperation will be regular mutual information exchange and cooperation between managing bodies of the programs financed by ESF and the ROP managing bodies at the level of the Management and Coordination Committee, which is a mechanism at the national level for insuring the broadest possible coordination, with the participation not only of bodies involved in implementation but also of economic and social partners. The ROP „Northeast“ managing body provides managing bodies of the ESF programs with information about regional needs in the areas of education, schooling, health, social services and development isolated in the analysis worked out in the creation of the ROP. The managing bodies of the ESF programs may take these needs into consideration in announcing individual auctions. The ROP managing body will provide information about projects for which the use of cross financing has been designated to the managing bodies of the ESF programs. The ROP „Northeast“ managing body will evaluate projects with an eye to their links to the ESF. The managing body of the Regional Operational Program will provide managing bodies of the ESF programs with documentation for informational purposes concerning applicants. This information will focus on the areas of "schooling, education, healthcare and social services", always before announcement of the pertinent auction. The managing bodies of the Regional Operational Programs will enable participation by employees of the managing bodies of the ESF programs in training and seminars concerning the Regional Operational Programs (and vice versa), as a result of which these employees will be able to provide information for subsidy applicants about the way in which program activities financed by ROP and ESF mutually complement each other. In some cases, the region and its regional authority will serve as intermediary for OP LZZ and OP VK programs, and will thus play a significant role in implementation.

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6 Priority Axes and Areas of Intervention in ROP „Northeast“

6.1 Structure of the Priority Axes and Areas of Intervention in ROP „Northeast“

The Regional Operational Programme of the Northeast Cohesion Region is implemented through 5 Priority Axes that are subdivided into 12 Areas of Intervention. Priority Axes and Areas of Intervention by overview:

Priority Axis 1: Development of Transport Infrastructure Area of Intervention 1.1: Development of Regional Road Transport Infrastructure Area of Intervention 1.2: Support for Projects Improving Regional Transport Serviceability Area of Intervention 1.3: Development of International Public Airports

Priority Axis 2: Development of Urban and Rural Areas Area of Intervention 2.1: Development of Regional Centres Area of Intervention 2.2: Urban Development Area of Intervention 2.3: Rural Development

Priority Axis 3: Tourism Area of Intervention 3.1: Development of Basic Infrastructure and Supporting Activities in the Field of Tourism Area of Intervention 3.2: Marketing and Coordination Activities in the Field of Tourism

Priority Axis 4: Development of Entrepreneurial Environment Area of Intervention 4.1: Support for Development of Entrepreneurial Infrastructure Area of Intervention 4.2: Support for Development of Cooperation with Secondary Schools, Training Institutions and Other Regional Education Institutions and Labour Offices, development of innovative activities in region

Priority Axis 5: Technical Assistance Area of Intervention 5.1: Support for Activities Related to the ROP „Northeast“ Implementation and Management Area of Intervention 5.2: Support for Absorption Capacity of the Northeast Cohesion Region

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6.2 ERDF Financial Allocations to Each ROP “Northeast“ Priority Axis

Priority Axis Share in Priority Axis Area of Intervention ROP „Northeast“

1.1 Development of Regional Road Transport Infrastructure Priority Axis 1 Development of 1.2 Support for Projects Improving 37 % Transport Infrastructure Regional Transport Serviceability 1.3 Development of International Public Airports

2.1 Development of Regional Centres Priority Axis 2 Development of Urban 2.2 Urban Development 34 % and Rural Areas 2.3 Rural Development

3.1 Development of Basic Infrastructure and Supporting Activities in the Field of Priority Axis 3 Tourism 22 % Tourism 3.2 Marketing and Coordination Activities in the Field of Tourism

4.1 Support for Development of Entrepreneurial Infrastructure Priority Axis 4 4.2 Support for Development of Development of Cooperation with Secondary Schools, 4 % Entrepreneurial Training Institutions and Other Regional Environment Education Institutions and Labour Offices, development of invovative activities in region

5.1 Support for Activities Related to ROP „Northeast“ Implementation and Priority Axis 5 Management 3 % Technical Assistance 5.2 Support for Absorption Capacity of the Northeast Cohesion Region

For a more detailed breakdown of financial allocations, see Chapter 9 – ROP „Northeast“ Funding.

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6.3 Priority Axis 1: Development of Transport Infrastructure

According to NSRR, the necessary condition for increasing competitive strength of the ČR and its regions is the completion of backbone and auxiliary networks and bypasses of the municipalities and cities, the absence of which is nowadays causing frequent traffic collapses with a negative impact on the environment and traffic safety. In compliance with NSRR and SOZS, environment-friendly means of transport should be preferred, especially mass transport, including creation of integrated transport systems, as well as railway and combined transport. With the sole exception of the capital city of Prague, the development of air transport infrastructure is insufficient. By its focus, the Priority Axis “Development of Transport Infrastructure” significantly contributes to meeting the NSRR priorities listed in Picture No 13:

Picture No 13: NSRR priorities and aim of priority axis Development of Transport Infastructure

NSRR Priorities

Competitive Business Sector Development of Sustainable Tourism Support for R&D Capacities and Innovation Education Increase of Employment and Employability Strengthening of Social Cohesion Development of Information Society Smart Public administration Environmental Protection and Improvement Availability of Improvement Transport Balanced Regional Development Development of Urban Areas Development of Rural Areas

Priority Axis 1: Development of Transport Infrastructure

6.3.A State-of-the-art

The issues of regional transport infrastructure resemble in many respect those of the whole CR. These include a bad condition of regional road networks and an insufficient transport serviceability. With freight transport having been taken off the railways and ships brought to the roads and with the shift of passenger transport performance from public railway and road transports to individual motor transport, the condition of roads deteriorated considerably and traffic load on regional roads increased. The fairly dense regional network of roads is chiefly made up of secondary and tertiary roads, managed by the individual regions. These roads have been handed over to the regions in a much-neglected condition. The main problem is a bad connection of the individual regions and settlements to the supra-regional road network (the TEN-T road network), which is why this connection needs to be improved through a modern backbone network of secondary and tertiary roads. A related problem is an inadequate constructional and technical condition and a high number of spot defects on the secondary and tertiary roads, with an adverse financial situation persevering in respect of maintenance and defect remedying. Traffic is often conducted through city and municipality centres and the roads are

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permanently congested with transit, particularly freight transport, which has a negative effect on both the environment and population. Another area of transport falling largely within the competence of regions is transport serviceability. In the 1990’s, a number of connections were cancelled or considerably limited because of unprofitability, which mostly affected citizens of smaller rural communities, situated off the main traffic arteries, and people living in the regions’ marginal and border areas, as these are also areas with an underdeveloped transport infrastructure. The situation is currently improving, but nationwide variation along with insufficient service in the marginal municipalities persists. This is accompanied by a general trend, marking decreasing interest in public transport to the advantage of individual motor transport, which makes the economic parameters of public transport worse. In the vicinity of large residential agglomerations, the so-called Integrated Transport System (IDS), interconnecting different means of transport, is becoming all the more important. Most regional railway routes, including their additional infrastructure, does not meet the current requirements on fast and high-quality transport and a comfortable and more effective connection of the regional railway routes to the upgraded corridor Prague – Pardubice – Česká Třebová is missing. Problems in the area of railroad transportation include the aging pool of cars. Cycle traffic as part of the daily commute sees above-average use primarily in the flats around Polabí and in the largest cities in the region. In spite of this, the region possesses an inadequate infrastructure for cyclists. From the existing international public airports, it is the international public airport in Pardubice that is best suited for development, being the region’s most significant airport and one of the CR’s five backbone airports and enjoying the status of civil airport. Its main advantage rests in its profitable geographic location in the centre of the CR, allowing its prospective use as a reserve airport for Prague, Brno and Ostrava. The importance of the Pardubice airport will even keep increasing as Hradec Králové, Pardubice and Chrudim are turned into a truly functional agglomeration (now having 250,000 inhabitants). The fact that the airport is situated near the upgraded 1st Railway Corridor, along with the expected canalization of a stretch of the Elbe from Chvaletice to Pardubice and the subsequent construction of the Pardubice port and an adjoining logistics centre, will permit a convenient combination of water – railway – road – air transport that will contribute to the development of the Pardubice-Hradec agglomeration, and even of the whole Northeast region.

Justification of the Type of Public Intervention The development of transport infrastructure requires public interventions, both to ensure optimum transport serviceability, on which the regions expend considerable public funds every year, and to develop regional road networks, which are under the administration of each region. According to the concept of krajs the need of resources for essential reconstructions and enhancement of Class II and Class III roads would be estimated several times higher than currently available within their budgets.

These involve non-profit-making events, which is also the case of investment in the airport infrastructure of the region’s international public airports, the development of which would not be possible without public subsidies owing to their financial demand. In any high-quality transport infrastructure, there is a certain potential for market development within the region, and it is therefore necessary to use the public interventions and offers for public services to ensure certain standard.

The amount of costs for the reconstruction of existing Class II and Class III roads is affected by the extent of reconstructions and constructions. The road sections often include bridges, roadway carrying capacity requires subsoil reconstruction and drainage. Regarding the fact that some roads are situated in mountain or piedmont terrains, the work often includes reconstruction of buttress and approach retaining walls.

The aid amount is also established with respect to historic unit prices. The historic unit prices are calculated from a sample of projects that were administered within the Joint Regional Operational Programme in the territory of NUTS II Northeast. The sample of projects includes projects of lower financial volumes as well as projects requiring a lot of money. The amount of costs for the reconstruction of existing and construction of new Class II and Class III roads depends on the extent of these reconstructions and constructions as well as on project localization.

It is expected that projects within the ROP Northeast will be focused especially on the solution of major communications so that a palpable positive effect can be assured from the implementation of these projects on region’s economy.

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Table: Examples of roadworks realized within NUTS II Northeast with the bill of actual costs Average Year of Total costs costs per Structure Length in km realization (mil. EUR) 1 km road (mil. EUR) Reconstruction of Road II/303 – Part 1. 2005 - 2006 5 2.56 0.51 Modernization of Road II/333 in section Přelouč - Živanice - Lázně Bohdaneč 2005 - 2006 8.78 2.50 0.28 III/29024 Jablonec nad Nisou - Tovární Str. 2006 - 2007 0.29 0.43 1.49 Rekonstruction of Roads II/277 and III/27716 in Český Dub 2005 - 2006 0.36 0.55 1.52 III/28733 Jablonec nad Nisou - rekonstruction Novoveská Str. 2006 - 2008 0.73 0.96 1.32

6.3.B Global target and Specific targets of the Priority Axis

6.3.B.1 Global target of the Priority Axis “Development of Transport Infrastructure”

To improve the region’s transport availability and effectiveness while respecting environmental protection principles

The aim of the Priority Axis is to improve regional road and air transport infrastructure, particularly its backbone network, including the infrastructure of international public airports, and to improve transport serviceability across the region, in agreement with environmental protection respecting the principles of sustainability. The Priority Axis “Development of Transport Infrastructure” is based on specific targets of ROP „Northeast“. Its focus is on supporting regional road infrastructure, development of regional transport serviceability and development of airport infrastructure for international public airports. Modernized transport infrastructure is a necessary precondition for ensuring competition ability across the region. The Priority Axis is developed through 3 Specific targets, resulting from a socioeconomic and a SWOT analysis and focusing on covering activities to be implemented under the present thematic field. In their formulation, account was taken of the results of the 2007-2013 National Development Plan of the CR. The targets are in compliance with EC Regulation on the European Regional Development Fund.

6.3.B.2 Specific targets of the Priority Axis “Development of Transport Infrastructure”

• To improve the condition of regional road transport infrastructure, particularly its backbone network, with an emphasis on improving the region’s transport availability, ensuring the region’s better connection to the superordinated transport network (the TEN-T road network) and increasing traffic safety • To improve the region’s transport serviceability • To improve the region’s conditions of air transport by developing international public airports

Specific target – To improve the condition of regional road transport infrastructure, particularly its backbone network, with an emphasis on improving the region’s transport availability,

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ensuring the region’s better connection to the superordinated transport network (the TEN-T road network)and increasing traffic safety This target focuses on supporting investment in regional transport infrastructure, particularly its transport network (if it regards roads of second and third class which the regions’ property) that will lead to improving the region’s transport availability, ensuring better connection of the region to the superordinated transport network (the TEN-T road network) and increasing safety of traffic, as well as to reducing adverse effects of transport on the population and environment. Within the framework of the ROP „Northeast“, the present Specific target is developed through the Area of Intervention 1.1 Development of Regional Road Transport Infrastructure.

Specific target – To improve the region’s transport serviceability This target focuses on supporting the improvement of optimum transport serviceability and availability across the region, which represent one of the essential conditions of ensuring life quality in the Northeast Cohesion Region. Within the framework of the ROP „Northeast“, the present Specific target is developed through the Area of Intervention 1.2 Support for Projects Improving Regional Transport Serviceability.

Specific target – To improve the region’s conditions of air transport by developing international public airports This target focuses on supporting investment in the development of airport infrastructure of international public airport, which will lead not only to improving conditions of air transport in the region, but also to further economic development. Within the framework of ROP „Northeast“, the present Specific target is developed through the Area of Intervention 1.3 Development of International Public Airports.

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Picture No 17: Target Tree – Priority Axis 1: Development of Transport Infrastructure

GLOBAL TARGET OF PRIORITY AXIS 1

To improve the region’s transport availability and effectiveness while respecting environmental protection principles

The aim is a high-quality condition of the regional road and air transport infrastructure, including optimum transport serviceability across the region, in agreement with environmental protection respecting the principles of sustainability . By improving quality and scope of the transport infrastructure, transport availability, the region’s attractiveness for investors, and labour force mobility will increase.

Specific Target Specific Target Specific Target To improve the condition of regional road transport To improve the region’s infrastructure, particularly its To improve the region’s conditions of air transport by backbone network, with an transport serviceability developing international emphasis on improving the public airports region’s transport availability, ensuring the region’s better connection to the superordinated transport network (the TEN-T road network) and increasing traffic safety

Area of Intervention 1.1 Area of Intervention 1.2 Area of Intervention 1.3

Development of Regional Support for Projects Development of Road Transport Improving Regional International Public Infrastructure Transport Serviceability Airports

6.3.C Strategy

In accordance with the above-provided targets, action will be taken for the development of regional transport infrastructure to ensure improvement of the region’s transport availability and effectiveness. The condition of regional transport and serviceability is a limiting factor for the region’s development. Under the region’s conditions, widening the scope of air transport possibilities is considered another significant opportunity for development. Priority Axis 1 is focused on selected regional transport infrastructure having an influence on the region’s development possibilities, i.e. secondary and tertiary roads, and on international public airports. The Priority Axis further considers transport serviceability and availability across the Northeast Region. The strategy to achieve these targets is derived from a coincidence matrix (table) of the relationship between a thematic SWOT analysis and the Specific targets, provided below. The strategy is based on strengthening the most significant strengths the region has, including a convenient location of the metropolitan agglomerations, a dense network of roads and railways, and the existence of an international public airport. On the other hand, it aims at eliminating the weaknesses, suggesting the resolution of which issues should be given priority. In particular, these include an absence of highways and speedways and the ensuing congestion of the existing regional road network, insufficient transport serviceability of the region and a missing coordination and linking- up of railway and road mass passenger transport. To achieve the set targets such attractive features may be used as the geographically advantageous location of the region, increasing share of the public transport in the overall transport performance and development of air transport. Serious threats to be avoided include postponed completion of the region’s backbone roads, as well as a failure to ensure

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adequate connection of the region to the superordinated road networks, an ever increasing traffic intensity (traffic collapses, accident frequency, deterioration of the environment in cities and municipalities heavily congested with transit, particularly freight transport), and an ever continuing decrease of the population’s interest in public transport. Through mutual interaction of factors of the strategy of Priority Axis 1 “Development of Transport Infrastructure”, ROP „Northeast“ Specific target 1 – “Increasing the region’s transport availability and effectiveness while respecting environmental protection principles” – will be met in particular. The Areas of Intervention for the present Priority Axis have been designed with regard to the Specific targets, decisive competencies of the region and compatibility with other operational programmes and the other ROP „Northeast“ Priority Axes. The remaining transport infrastructure (highways, primary roads, roads of first class, railways, water transport, multimodal freight including public logistic centres’ support ) is contained in the OP D. The question of local municipally owned roads comes under the purview of the OP ČR – Republic of Poland 2007 - 2013 and Operational Programme Free State of Saxony – Czech republic 2007 - 2013 and in the Rural Development programme.

In line with the principle of concentration and in effort to concentrate investments and to prevent aid fragmentation a part of the project will be assessment of integrated approach and total impact of the project.

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Table No 18: Coincidence Matrix of the thematic SWOT analysis and Specific targets – Priority 1 Development of Transport Infrastucture

Coincidence Matrix of the thematic SWOT analysis

and Specific targets to better connection gion’s - Priority 1 an with network, s backbone - Development of Transport Infrastructure

SPECIFIC TARGETS of the regional road transport Improving the condition it particularly infrastructure, region’s transport on improving the emphasis the re ensuring availability, and increasing network transport the superordinated safety traffic serviceability transport region’s Improving the by of air transport conditions Improving the region’s airports public international developing SWOT STRENGTHS Advantageous location of the Hradec Králové – Pardubice – Chrudim and the Liberec- Region – Jablonec Region agglomerations XXX XXX XXX Dense network of roads and railways XXX XXX X st Upgraded 1 Railway Corridor forming part of the Berlin – Prague – Brno – Vienna Corridor X XXX X Existing international public airport in Pardubice, being one of the five backbone airports in the CR X XX XXX WEAKNESSES Absence of highways and speedways and the ensuing congestion of the existing regional road network XXX XX X Inadequate technical condition of secondary and tertiary roads, local roads and railway network XXX XX X Insufficient transport serviceability of the region and a missing coordination and linking-up of railway and road mass passenger traffic XX XXX X Insufficient transport availability and serviceability in some border and sub-mountain areas and less densely populated areas XX XXX X Underdeveloped, or missing technical and transport infrastructure in some rural and less urbanized areas, particularly small municipalities XX XX X OPPORTUNITIES Geographically advantageous location of the region, running from the northern tip of theČRbordering on Germany, over the Czech-Polish border area to the eastern part and frontier with Moravia and penetrating regions of the Czech-Moravian Highlands and extensive areas in the Elbe valley lowlands XXX XXX XXX Increasing share of the public transport in the overall transport performance XX XXX XX Development of integrated transport systems, including modernization of backbone railway networks and construction of interchange terminals between the different means of transport XX XXX X Development of air transport: continuous emphasis on the importance of the international airport in Pardubice, reconstruction of the airport in Liberec and Hradec Králové and regaining of their status as international airports X XX XXX Construction of a multimodal logistics centre in Pardubice XX X XX Completion of the canalization of a stretch of the Elbe between Chvaletice and Pardubice and construction of a terminal port in Pardubice X XX X THREATS Postponed completion of the region’s backbone roads, as well as a failure to ensure adequate connection of the region to the Trans-European Transport Networks XXX XX X Ever increasing traffic intensity (traffic collapses, accident frequency, deterioration of the environment in cities and municipalities heavily congested with transit, particularly freight transport) XXX XX X Further reduction of transport availability and significance of marginal and badly accessible areas XX XXX X Lack of funds to keep the extent of public transport, causing its decline X XXX X Absence of high-quality railway connection of most areas of the region with the other parts of the Czech Republic, except for the regions connected to the 1st Railway Corridor X XXX X Lower attractiveness for foreign investors due to an insufficient transport connection XX XX XX Legend: Relation: X – very weak to weak, XX – medium to strong, XXX – very strong

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6.3.D Area of Intervention 1.1: Development of Regional Road Transport Infrastructure

NUTS II Northeast does not have a sufficient high-quality transport connection of the individual regions and settlements to the supra-regional road network (TEN-T) which must be extended with a modernized backbone network of secondary and tertiary roads. At the same time, it suffers from bad condition of the secondary and tertiary roads as a result of neglected maintenance and continuous congestion of the road network. The high traffic intensity burdens the environment and lowers quality of life. The transport condition brings about a number of other negative impacts. Some of the significant problems include in particular an inadequate constructional and technical condition of the secondary and tertiary roads, a large number of defects and barriers and the related adverse impacts of transport on the population’s living environment. Whereas the largest urban agglomerations in the region are mutually joined to the backbone network of freeways and Class I highways, vehicle access of other areas chiefly depends upon quality and safety of regional Class II and III highways. Good vehicle access for economically weaker areas of the region is no guarantee of their immediate all- around development. Nevertheless, it is one of the most significant factors influencing the extent of use of their existing developmental potential. Investing into the transportation infrastructure furthermore presents one of the greatest multiplication effects. With regard to pronounced internal debt in the area of Class II and III regional highway networks it is thus necessary to financially support modernization and reconstruction of regional highways under the ROP „Northeast“ framework to fulfil one of the chief presuppositions of balanced regional development. Improvement in the current undesirable state will lead to enhanced competitiveness in the region, attractiveness for investors, visitors and residents and further to an improvement in the quality of public transportation which makes use of the regional highway network.

That is why the present Area of Intervention develops the Specific target “Improving the condition of regional road transport infrastructure, particularly its backbone network, with an emphasis on improving the region’s transport availability, ensuring the region’s better connection to the superordinated transport network and increasing traffic safety” (see Target Tree). The Area of Intervention focuses on modernizing, reconstructing and constructing secondary and tertiary roads. Priority support will go to roads emptying into the TEN-T trans-European highway net and connecting further to Class II and III highways in such a way as to fully connect the TEN-T network to urbanized centres, tourism centres and other frequented locations in the region, and furthermore so that remote areas and areas with a small, scattered economic base also gain access to TEN-T. Another interest of the Area of Intervention includes the removal of spot defects and barriers from these roads (improvement of undesirable parameters are technical state of bridges and culverts, re-design of intersections with poor traffic engineering, etc.) and the elimination of adverse effects which transport has on the environment and population (building of bypasses, acoustic walls, etc.). A contribution to the elimination of the negative influences of traffic on the natural environment will be achieved in particular by better quality road surfaces, shortening of driving time and enhanced traffic flow.

Support is aimed exclusively at reconstruction and modernization of existing roads, and thus concerns a set of projects of an investment character. Concretely, it will go to coordinated construction activities designed to re-purpose roads or improve some of their technical specifications, to potentially build upon their existing purpose, capacity or use. Projects involving repair or maintenance will not be supported.

6.3.D.1 Specification of the Area of Intervention • Modernizing, reconstructing and constructing secondary and tertiary roads whose priority will be to connect the region to the TEN-T network. • Removing spot defects and barriers from the secondary and tertiary roads which connect the region to the TEN-T road network and eliminating adverse effects of transport on the population and the environment

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6.3.D.2 Global and Operational Targets of the Area of Intervention Global target : • By modernizing the regional network of secondary and tertiary roads, to improve the quality of transport connection within the region and the region’s connection to the supra-regional transport network (the TEN-T road network).

Operational Targets: • To ensure the region’s high-quality connection along the transport axes • To ensure the region’s connection to the superordinated road network (TEN-T) • To bring the secondary and tertiary roads into a standard condition • To increase traffic safety in order to decrease accident rate • To reduce negative impacts of transport on the environment and public health

6.3.E Area of Intervention 1.2: Support for Projects Improving Regional Transport Serviceability

Despite a fairly dense transport network and the existing Public Municipal Transport systems, public regional transport has not been coordinated and variable enough to be able to compete with individual passenger transport. Public transport integration within the region has not been completed, and nor has the solution for parking fields and interchange terminals, including transport safety and availability for citizens with limited motive and orientation capabilities. Outside the integrated transport system, no sufficient transport connection to marginal and badly accessible areas of the region has been ensured. Public transport attractiveness is lowered by the current standard and comfort of transport often ensured by obsolete transportation means. Fleet renewal, transport integration and a solution for interchanging between different means of transport and the introduction of electronic dispatch systems will reduce passenger handling time and increase traffic safety and speed. An increased competitive strength of environment-friendly mass transport with the aim of keeping a favourable balance between the individual and public passenger transport will eliminate the negative impacts of transport on the population’s living environment. An environment-friendly alternative to other means of transport is provided by cycling, offering considerable flexibility and partially accounting for transport service in the region. The present Area of Intervention develops the Specific target “To improve the region’s transport serviceability” (see Target Tree). The Area of Intervention thus focuses on building public transport infrastructure and technical amenities (railway infrastructure for MHD, transfer stations, parking lots and areas where people transfer from individual automobiles to public transport, stops for rail and non-rail public transportation, introducing management, telematic, informational and dispatching systems which make tariff integration possible). These include activities designed to eliminate the impact of transport on urban and municipal lands in accordance with a program for improving air quality (purchase of buses, Municipal Mass Transport with ecological drive and technical service vehicles with alternative drives, building of auxiliary infrastructure, like natural gas refilling stations for public transport buses and exchange terminals for dependent electric traction vehicles then provision of dust filters for the diesel engines of Municipal Mass Transport and technical service). Another activity is the purchase of specific buses for regional public transport links (low-floor or low capacity vehicles or vehicles operating on alternative fuels with the goal of making buses accessible to older and disabled citizens, optimizing transport serviceability in remote parts of the region and limiting the negative impact of bus traffic on the natural environment). Other objects of intervention include renewal and modernization of the railway rolling stock used for mass passenger transport (trolleybuses and trams which are part of the Municipal Public Transportation and regional rail transportation) and development of infrastructure for cycle transport with the aim of increasing traffic safety as well as attractiveness of cycling as a commuting alternative.

This support area, then, deals with sustainable urban and suburban public transport (especially in agglomerations with more than 100,000 residents) and regional public transport (intercity traffic within the framework of the region or the connection of rural portions of the region to hub cities). This concerns traffic put into service within the framework of the demands of public service, in which the ordering parties are public entities – towns or regions whose obligation is to ensure basic or other traffic serviceability within their territory.

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MA will ensure that a minimum amount of 24.6 MEUR in the area of intervention 1.2 – Support of projects improving transport serviceability in the territory is provided for projects targeted on the development of city transport, or clean city transport including intelligent transport systems in towns with the population over 50,000 respectively (categorization of interventions codes 25 – Urban transport, 28 – Intelligent transport systems, 52 – promotion of urban transport)

Projects for the development of public transport will be evaluated as to whether the project is or is not based upon public support. Greater support will be determined based upon this fact. The provision of public resources is dependent upon legislation in the ČR, as well as EC regulations, in the area of awarding public commissions and ensuring economic competitiveness.

6.3.E.1 Specification of the Area of Intervention • Infrastructure and technical amenities for public transport, integrated transport systems and adoption of environment-friendly approaches within public transport • Support for renewing railway rolling stock used for mass passenger transport • Development of infrastructure for cycle transport with the aim of increasing traffic safety

6.3.E.2 Global and Operational Targets of the Area of Intervention Global target : • To ensure high-quality standard for transport serviceability in the region by integrating different means of environment-friendly transport Operational Targets: • To improve transport serviceability in the region through public transport • To improve environment-friendly transport • To increase attractiveness of public transport • To improve availability of public transport to citizens with limited motive and orientation capabilities • To increase traffic safety in cycle transport

6.3.F Area of Intervention 1.3: Development of International Public Airports

Airports present an opportunity for development not just in terms of the region’s accessibility, but also as an opportunity for economic development. They provide a different kind of transport availability than roads, allowing a very fast connection over long distances. The Cohesion Region Northeast needs a high-quality and readily available air connection, providing the fastest means of passenger transport, chiefly in the economic and entrepreneurial field, to other European regions; therefore, new airport and connecting infrastructure must be built and the existing infrastructure modernized, including transport connections and international public airport in the region. In the Cohesion Region Northeast the only one public international airport is going to be supported.

The present Area of Intervention develops the Specific target “To improve the region’s conditions of air transport by developing international public airports” (see Target Tree). The Area of Intervention focuses on developing airports infrastructure at international public airport in the NUTS II Northeast Region. It involves transport connection of the airport terminals, reconstruction, modernization and building of airport infrastructure with regard to constructional, technical and security airport equipment, while meeting other conditions of air traffic reflecting the airport status.

6.3.F.1 Specification of the Area of Intervention • Development of air traffic at international public airport within the NUTSII Northeast Region

6.3.F.2 Global and Specific targets of the Area of Intervention Global target :

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• To ensure the region’s high-quality air connection in terms of increased transport availability at regional and national level and further economic and social development Operational Targets: • To build an international public airport with sufficient capacity in the region • To improve quality of air traffic at international public airport in the region

6.3.G Categorization of the Areas of Intervention

Categories of aid from structural funds for the programme period 2007-2013 are defined in Appendix No. II to the implementing regulation on detail rules for the application of the general regulation, consisting of an objective definition of the eligible Area of Intervention and its respective code. Each Area of Intervention may include one or more categories, depending on Specific/Operational Targets of the Area of Intervention.

Category Designation 18 Mobile Rail Assets 23 Regional/Local Roads 24 Cycle Tracks 25 Urban Transport 28 Intelligent Transport Systems 29 Airports 52 Promotion of Clean Urban Transport

6.3.H Form of Support

Non-returnable direct aid (subsidy). In the new programme period 2007-2013, the co-financing rate from the EU (SF) funds will only be applied to eligible public spending. Co-financing from national public funds will be provided, based upon the type of beneficiary, from the state budget, from regional budgets and municipal budgets. The amount of support from the structural funds (ERDF) may reach as high as 85% of the total eligible public outlay for the projects. In cases in which the project is based upon public support in the sense of No. 87 Par. 1 Founding Treaty of the European Community, Commission Regulation no. 1628/2006 dated 24.10. 2006 concerning the use of Article 87 and 88 of the Contract for Internal Regional Investment Support will be applied. According to the regional intensity map of public support approved for the Czech Republic for the 2007-2013 period, the maximal intensity of support provided does not exceed 40% of eligible outlays for large firms, 50% for midsized firms and 60% for small businesses. An exception is the purchase and modernization of means of transport, where notification of this support regime will be provided to the European Commission, while support may be provided only upon approval of the regime by the European Commission on conditions determined in its decision. Following ES Regulation (ES) no.1998/2006 dated 15.12. 2006 concerning the use of Article 87 and 88 of the Contract on De Minimis Support, it is also possible to provide de minimis support in the area of transport. In support area 1.3., Directions of the Community Concerning Airport Financing and State Support for Airline Start-ups with Regional Airport Service (2005/C 312/01) will be used.

In order to ensure higher concentration of investments and to prevent fragmentation of resources, supported will be –in line with the principle- only projects with a minimum amount of total eligible expenditure of 5 mil. CZK. Stratification by areas of intervention is as follows: Area of intervention Minimum Total Eligible Expenditure (mil. CZK) 1.1 Development of regional road transport infrastructure 5 1.2 Support to projects improving transport serviceability in the 5 territory 1.3 Development of public international airports 10

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6.3.I Form of support

Individual projects

6.3.J Indicators and Their Quantification

Specification and quantification of the indicators to evaluate the Specific targets of Priority Axis/Areas of Intervention are included in Chapter 7 – Indicators for Monitoring and Evaluation.

6.3.K Beneficiaries

• Regions • Municipalities • Organizations established or founded by the regions, municipalities and the state • Voluntary municipal unions • Nongovernmental non-profit organizations • Business entities

These Beneficiaries will fulfil the individual intervention fields of this priority axis. A detailed specification of the Beneficiaries by intervention field is given in the implementing document.

6.3.L Target Groups

• Regional population and people working in the region • Domestic and foreign visitors to the region and tourists • Local business sector • Domestic and foreign investors

6.3.M Flexibility

Not considered.

6.3.N Large Projects

Not considered within the ROP „Northeast“.

6.3.O Coordination with Interventions of Other Programmes

The ROP „Northeast“ Priority Axis 1 “Development of Transport Infrastructure” bears a relation to the following operational programmes with a nationwide or regional focus: OP Transport The ROP „Northeast“ focuses on road transport infrastructure in the ownership of regions, particularly on modernizing the reconstruction and construction of secondary and tertiary roads. Priority support will be given to roads connecting region to the TEN-T road network, eliminating adverse effects of transport on the population and environment (building of bypasses and anti noise barriers on Class II and III roads, support for purchase of ecological vehicles for public transportation – trolley buses, trams, buses which use ecological fuel, rail wheel vehicles for regional personal transportation, development and modernization of public transportation rail infrastructure), building integrated transport systems, developing sustainable municipal and regional mass transit and improving

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transport availability and serviceability in the region’s rural areas and the development of bike transport. Another area of priority is the development of air traffic at an international public airport. The Transport operational programme scope includes support for activities which are not dealt with within the framework of ROP „Northeast“. It regards construction and modernization of infrastructure of nationwide importance, i.e. highway and road networks within TEN-T, railway networks within TEN-T, modernization of of primary roads outside of TEN-T, support or multimodal freight transport including support of public logistic centres, development of inland water transport, and modernization and development of the Prague Metro and road traffic control systems in the capital city of Prague. The scopes of the ROP’s and OP D’s areas of public intervention are totally different, and they basically complement each other thematically. The Transport operational programme doesn’t solve the problematic of renewal of the public mass transportation fleet. Areas of public interventions on the part of ROP „Northeast“ and OP D vary in their content focus and in fact complement each other.

Because issues to do with traffic in the Northeast region are complementarily dealt with in particular by the Regional Operational Program and OP D, a coordinating system between these two operational programs is proposed, especially with a view to keeping both sides mutually informed: • A representative of the managing authority for the OP D (hereinafter ŘO OP D) is a member of the Monitoring Committee of the ROP „Northeast“. This guarantees, among other things, access for ŘO OP D in determining criteria for project selection within the ROP and to information about the course of realizing the ROP „Northeast“; • The managing authority of the ROP „Northeast“ (hereinafter ŘO ROP) informationally provides the ŘO OP D with the documentation for applicants which will be aimed at the area Support for Renewal of Vehicle Pools for Rail Personal Public Transportation, and this shall always be done before announcing the pertinent invitation; • ŘO ROP avails itself of specialist consultation with the MD in determining technical conditions for choosing rail vehicles; • Representatives of the MD will be consulted as experts in the evaluation of projects in the area Support for Renewal of Vehicle Pools for Rail Personal Public Transportation; • MSC2007 as intermediary will provide for ŘO ROP and OPD to have access to information about projects chosen for realization under both operational programs.

OP Crossborder Cooperation Czech Republic – Republic of Poland 2007 - 2013 The ROP „Northeast“ is thematically related to the Operational Programme Czech Republic – Poland 2007 - 2013, containing a priority focusing on strengthening transport availability solely in border areas. The operational programme’s public interventions are focused on modernizing and developing transport infrastructure in border areas, on improving access to the existing transport networks, and on local roads to complement the existing road network. The public intervention fields of these two programmes do not overlap as their scope and territorial focus are different. The ROP „Northeast“ public interventions in the area of transport infrastructure will thus be complemented through interventions focusing solely on the border areas, their objective consisting in crossborder cooperation by improving transport availability. OP Free State of Saxony – Czech Republic 2007 - 2013 The scope of the Operational Programme Free State of Saxony – Czech Republic 2007 - 2013 includes the support for transport infrastructure, particularly the connection of the border areas to the national and Trans-European transport networks, environment-friendly systems of public transport, and the improvement of information and navigation systems. The scope and territorial focus of the ROP „Northeast“ is different and does not interfere with any activities supported within the crossborder cooperation. EAFRD – Rural Development Programme From the EAFRD through the Rural Development Programme (RDP), areas and activities related to construction and reconstruction of local roads, stops and other small investment are funded. The RDP is locally focused on supporting activities in municipalities with less than 500 inhabitants, including investment to be made directly in the municipality’s territory. In this way, the RDP complements the

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ROP „Northeast“ through a number of activities for the improvement of transport infrastructure and transport serviceability. The ROP „Northeast“ Priority Axis and the aforementioned operational programmes complement and condition each other, and as specifically supported projects are implemented, they will create sufficient synergic effects to intensify the results and impacts of these programmes. At the same time, they will contribute to meeting the targets and priorities of the superior programme document (NSRR).

6.3.P Financial Plan

Tables with financial plans are contained in Chapter 9 – ROP „Northeast“ Funding.

6.4 Priority Axis 2: Development of Urban and Rural Areas

The Priority Axis “Development of Urban and Rural Areas” aims at responding to the major problems identified under the NSRR Priority “Balanced Regions Development”, especially to the ever increasing differences between urban and rural areas and their specific problems. The Northeast Cohesion Region, too, has been affected by depopulation of the badly accessible areas, which is to do with a lack of job and retraining opportunities in the country, but also with a worse availability of public services. Just like the other cities of the ČR, the cities in the Northeast Cohesion Region are also put at risk by an ever deteriorating demographic and social situation and an unsuitable transport, civic and environmental infrastructure. Considering the complexity of its focus, the Priority Axis “Development of Urban and Rural Areas” will contribute to meeting several NSRR Priorities at a time:

Picture No 18: NSRR priorities and aim o priority axis Development of Urban and Rural Areas

NSRR Priorities

Competitive Business Sector Development of Sustainable Tourism Support for R&D Capacities and Innovation Education Increase of Employment and Employability Strengthening of Social Cohesion Development of Information Society Smart State administration Environmental Protection and Improvement Availability of Improvement Transport Balanced Regions Development Development of Urban Areas Development of Rural Areas

Priority Axis 2: Development of Urban and Rural Areas

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6.4.A State-of-the-art

The issues of urban and rural areas in the Northeast Cohesion Region resemble in many respects those of the whole Czech Republic. A disintegrated and non-homogenous population structure and uneven population density are characteristic of the region. Two significant urban areas of nationwide importance are found here – the Hradec-Pardubice agglomeration and the Liberec-Jablonec agglomeration. These partially urbanized areas lie in the hinterland of the former district cities, serving as regional residential centres. A higher share of population living in smaller municipalities is typical of the traditionally agricultural areas of the region, the sub-mountain areas, and the eastern parts of the region. Most heterogeneous and disintegrated is the population structure of the Pardubice-Region; on the other hand, the Liberec- Region belongs to those with an above-average level of urbanization. Rural regions are all municipal regions with less than 5.000 residents. Typical features of the urban areas include a generally higher standard of living, especially in terms of housing, availability and quality of health, social and other civic services. A network of education institutions offering a wide range of fields to study has been developed. The cities represent administrative, cultural, and social centres of the region. City dwellers show higher employment in the tertiary and quaternary sectors, achieving a higher level of education. Age structure of the population is usually unfavourable, with older age categories being more strongly represented. A potential threat contingent on the urban environment is a higher occurrence of social-pathological phenomena (drugs, crime, …). Urban regions tend to suffer from higher pollution of the environmental components (higher emission burden, higher concentrations of noise and dust, higher production of communal waste). The cities deal with problems connected with intense traffic. Green and recreational space areas per dweller are also smaller. The urban structure and value of cities tends to be impaired by the existence of unutilized, mostly industrial brownfields17. The rural areas of the Northeast Region are affected by gradual depopulation and population ageing. However, this phenomenon is not seen in those municipalities in the hinterland of big cities, where suburbanizing processes are underway. Rural areas with a recreational function are becoming also attractive. Small settlement dwellers outside the suburbanized areas show higher employment in the primary sector. The lack of job opportunities and the limited job mobility being primarily due to the problematic transport serviceability are causing a higher level of unemployment. The deterioration in

17 Brownfields – uncared and currently unused or little used sites and facilities that have lost their function and use, which are abandoned or unused or little used.

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quality of the human resources and other negative synergic effects are the result of selective migration from the peripheral rural areas mostly to the cities. The quality and availability of health, social and other civic services rendered is fairly low. The scope of education possibilities in the rural areas is also different. The offer for leisure and community activities is not wide enough. Municipalities usually have older housing stocks with inferior technical amenities. Technical infrastructure does not always reach the necessary level. A low degree of waste water treatment and unsecured medium and small sources of air pollution, the occurrence of old environmental burdens, and the existence of unused, mostly agricultural, civic and industrial brownfields tend to be problematic. Rural areas generally provide a higher quality of natural environment. The Priority Axis 2 “Development of Urban and Rural Areas” is chiefly met by the ROP „Northeast“ Specific target 2: “To improve quality of life and public services for the population while emphasising reduction of regional disparities”. The Priority Axis 2 focuses on the reduction of differences between the urban and rural areas and the solution of their specific problems, with particular regard to the quality of life of their population and the development of civic infrastructure, as well as a balanced development of these areas. Share of financial funds on Priority Axis 2 Development of Urban and Rural Areas is 34% of the total allocation of ERDF sources in terms of the ROP „Northeast“, out of which 80% will be given to urban development and 20% to rural development.

Justification of the Type of Public Intervention In the Northeast Region, the difference between quality of life in the cities and in the country and in their potential and competitiveness with other regions is significantly increasing. The purpose of public intervention is thus to contribute to a balanced development of the urban and rural areas and to the solution of their specific problems, to emphasize the positives and stimulate the negatives of these areas in order to enhance the region’s overall attractiveness for the life of its people, and to contribute to its economic performance and social stability. There are certain negatives which must be eliminated in order that their areas may be used subsequently to improve the quality of life of citizens. Chief among these would be brownfields under public ownership, whose revitalization is plagued by a chronic lack of funding. Public interventions in this Priority Axis 4 support primarily areas where a certain standard is to be ensured in the public sector and the fields leading to an increased quality of life in the urban and rural areas and thus contributing to the development of their attractiveness and potential.

The main and pivotal axis of the general strategy of ROP Northeast is Development of of urban and rural areas. The fact was reflected also into the draft financial plan which singles out for it a considerable share of programme resources. At that, the proposed amount of resources reflects not only significance of the priority axis but also funds required for implementation of the set up number of projects in the given area.

Preliminary data provided by 3 towns – poles of development, which may become beneficiaries in the area of intervention 2.1 – Development of regional centres demonstrate that each of the town is capable of preparing a minimum of one Integrated Urban Integrated Development Plan (UIDP).

However, strategic planning of towns is in a majority of cases at such a level that a submission of more UIDPs would be possible. The plans are targeted for example on regeneration of deprived town centres and municipal zones of historic monuments, revitalization of prefabricated housing estates or on other activities focused on the change in the overall town attractiveness. Most towns are interested to include into their UIDP also some activities using resources from other priority axes of ROP Northeast.

Determining factor is the UIDP size established at 10 mil. EUR, resp. the endeavour of MA ROP NE will aim at an average UIDP size of 15 mil. Establishment of the allocation for area of intervention 2.1 – Development of regional centres therefore takes into account the condition that a minimum of 1 UIDP from each pole of development can be aided with an average UIDP size being 15 mil. EUR.

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6.4.B Global and Specific targets of the Priority Axis

6.4.B.1 Global target of the Priority Axis “Development of Urban and Rural Areas”

To improve quality of life and public services for the population while emphasizing reduction of regional disparities

The goal is to strive for a balanced development of the region while respecting the principles of sustainability and achieve general improvement of the quality of life for people living in the urban and rural areas. The present Priority Axis aims at reducing regional disparities limiting increased economic prosperity and effective decision-making concerning long-term development of the region.

The Priority Axis “Development of Urban and Rural Areas” focuses on reducing regional differences between the urban and rural areas of the Northeast Region, particularly in the fields of the quality of life, human resources, civic infrastructure, and sustainability. It is based on a real need for supporting the development of urban and rural areas leading to their increased economic performance and competitive strength, to their mutual cooperation and cohesion, and to increased standards and attractiveness of living while respecting the principles of sustainability. The Priority Axis is developed through 4 Specific targets, resulting from a socioeconomic and a SWOT analysis. In their formulation, account was taken of the results of the 2007-2013 National Development Plan of the CR. The targets are in compliance with EC Regulation on the European Regional Development Fund.

6.4.B.2 Specific targets of the Priority Axis “Development of Urban and Rural Areas” • To strengthen the position and development of regional urban centres, particularly their social and physical structures • To strengthen the development of and increase in the quality of life in urban environments, particularly their social and physical structures • To strengthen the position of rural areas, mainly by increasing attractiveness of their physical structure and ensuring high quality of life for their population

Specific target - To strengthen the position and development of regional urban centres, particularly their social and physical structures This target focuses on supporting activities and projects leading to increased living standards of the population in big cities and aims at improving their image, as well as human and economic potential. Within the framework of the ROP „Northeast“, it is developed through the Area of Intervention 2.1 “Development of Regional Centres”.

Specific target - To strengthen the development of and increase in the quality of life in urban environments, particularly their social and physical structures This target focuses on supporting activities and projects leading to increased living standards of the population in cities and to improving the image of urban settlements, as well as their human and economic potential. Within the framework of the ROP „Northeast“, it is developed through the Area of Intervention 2.2 “Urban Development”.

Specific target - To strengthen the position of rural areas, mainly by increasing attractiveness of their physical structure and ensuring high quality of life for their population This target focuses on supporting activities and projects leading to an increased attractiveness of the rural areas in terms of a high-quality standard of living and to an improved civic infrastructure. Within the framework of the ROP „Northeast“, it is developed through the Area of Intervention 2.3 “Rural Development”.

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Picture No 19: Target Tree – Priority Axis 2: Development of Urban and Rural Areas

GLOBAL TARGET OF PRIORITY AXIS 2

To improve quality of life and public services for the population while emphasising reduction of regional disparities

To strive for a balanced development of the region while respecting the principles of sustainability . To achieve general improvement of the quality of life for people living in urban settlements and rural areas. To reduce regional disparities limiting increased economic prosperity. To make effective decisions about long-term development of the region.

Specific Target Specific Target Specific Target

To strengthen the position To strengthen the development To strengthen the position of and development of of and increase in the quality of rural areas, mainly by regional urban centres, life in urban environments, increasing attractiveness of particularly their social particularly their social and their physical structure and and physical structures physical structures ensuring high quality of life for their population

Area of Intervention Area of Intervention Area of Intervention 2.1 2.2 2.3

Development of Urban Development Rural Development Regional Centres

6.4.C Strategy

The strategy to achieve the targets is based on a coincidence matrix relating a SWOT analysis and the Specific targets of the Priority Axis “Development of Urban and Rural Areas”. One of the basic materials for deciding strategy for Priority Axis 2, Development of Urban and Rural Areas, consisted of strategy documents of the regions. Output from these priority axis working group meetings was incorporated into this strategy whose members are also representatives of cities and municipalities. The chief strategic and program documents at the regional level are the Strategy for Development of the Region and Program for Development of the Region. A listing of the relevant documentation is given in Chapter 3.2, Documentation at the National Level. These documents are long-term conceptual documents for the regions, which specify priority activities important for development of the region on the basis of analyses. The prosperity of the region depends upon multiple factors. Over the long-term, another important condition for boosting competitiveness and prosperity in the region is the development of human resources, educational growth, social services and the development of healthcare. The strategy for development of human resources in the regions is tied to the priority of the government of the Czech Republic given in "Strategy for the Development of Human Resources in the Czech Republic" for the 2005-2010 period.

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Urban areas are continually impacted by the worsening of the natural environment, a higher concentration of industry and the frequent occurrence of unused brownfields with a low level of interest in their revitalization. Characteristic is high-quality human resources also accompanied by a higher occurrence of social-pathological and other undesired phenomena. Within the area of the Northeast cohesion region, there is a perceptible regional imbalance in social services networks. Basic social services are inadequate in some areas, and some areas hardly possess any coverage at all. Good accessibility to services is important for users and their families. Often it is necessary to provide services directly in their homes. Broad availability of services is of significant importance for good linkage between social services and healthcare, with a concurrent improvement in the quality of life for the target groups. Heightened availability of services also solves ethical problems to do with the right to utilization of social services. The health of the population and individual citizens is without doubt one of the basic conditions for regional prosperity, the success of its people, and their contentment. Healthcare, as a category, is not exclusively about medicine but is broadly humanitarian. In achieving the highest possible development and healthcare, a comprehensive approach to prevention, diagnostics, therapy and rehabilitation is necessary. This presumes improvements in the quality of medical technology. Another element of health policy and strategy for the development of the region is the introduction of a conceptual approach by the regions to healthcare development. Activities in the area of healthcare are highly important for long-term, sustainable social and economic development in the region. The health of the population and individual citizens is without doubt one of the basic conditions for regional prosperity, the success of its people, and their contentment. The existence of five universities in the Northeast region contributes to an overall growth in education. Development in the region will depend more and more upon the qualification and quality of human resources in this region. Demands for the future are flexible people with a broad general education and the capability for lifelong learning and changing qualifications. A greater number of people, both currently and in the future will be involved in lifelong learning programs. Awareness must be focused on new, contemporary educational programs and on further education. In this connection, something that cannot be overlooked is the importance of developing interest-based activities of citizens, especially children and young people and those with disabilities. The health, education and social stability of the populace is a precondition for the development and reinforcement of stability in the region, and an adequate network of quality social, healthcare and educational facilities is one of the key areas of human resources. From the standpoint of regional administrative centres, services and cultural/social life, the position of cities is strong. The strategy of Priority Axis 2 is complemented at the same time by the realization of activities in the rural areas which make up a substantial part of the region. Rural development is dependent upon enhancing the general quality of the people’s life and attractiveness of the rural areas, chiefly by increasing the housing quality, strengthening the social and health infrastructure and the insufficient provision of public utility services, strengthening an active community life and creating a basis for its development, supporting increased interest in revitalizing the existing brownfields, while eliminating negative impacts on environmental quality. ROP „Northeast“ in Priority Axis 2 focuses on material investment in the areas of education, social services and health care. Provision of support must be in accord with national legislation and EU legislation and the managing body simultaneously ensures that it will be in accord with material and processed rules for public support valid in the period in which the support is provided. ROP „Northeast“ ensures support of the infrastructure through mutual complementarity with the cofinance activities of ESF. The subject of this cooperation will be regular mutual information exchange and cooperation between managing bodies at the level of the Management and Coordination Committee, which is a mechanism at the national level for insuring the broadest possible coordination, with the participation not only of bodies involved in implementation but also of economic and social partners. The ROP managing body provides managing bodies of the ESF programs with information about regional needs in the areas of education, health and social services, along with information about projects which use cross-financing, and provide information about approved projects. The managing bodies of the ESF operational programs provide ŘO ROP with information about auctions and project aims. The ROP managing body enables employees of the managing bodies of ESF operational programs that take part in training and seminars concerning ROP „Northeast“, on the basis of which these employees will inform applicants for subsidies from ESF and ROP. The ROP „Northeast“ managing body will take ties between projects and ESF activities into account in evaluating them. The result of this cooperation between the managing bodies of the ESF and ROP „Northeast“ operational programs will be functional projects with mutually complementary activities.

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This priority axis will be subject to territorially-integrated approach. Development and regeneration of urban areas representing the core of this priority axis will be aided both through individual projects and through integrated plans of town development with an aim to strengthen the principle of complex approach to problem solutions and to enhance synergic effects of the programme. Also, the interventions from ROP NUTS II Northeast will be differentiated according to individual types of territories.

In line with the principle of concentration and in effort to concentrate investments and to prevent aid fragmentation a part of the project evaluation will be assessment of integrated approach and general impact of the project.

Table No 19: Coincidence Matrix of the thematic SWOT analysis and Specific targets – Priority 2 Development of Urban and Rural Areas

in urbanlife

Coincidence Matrix of the thematic SWOT analysis and Specific targets

- Priority 2 - Development of Urban and Rural Areas

structures

environments, particularly their social and physical SPECIFIC TARGETS To strengthen the position and development of regional urban centres, particularly their social and physical structures To strengthen the development of and increase in the quality of areas,To strengthen the position of rural attractiveness of their mainly by increasing structure and ensuring high quality physical of life for their population SWOT STRENGTHS Availability of elementary social and health care services across the region XXX XXX XXX A rising housing quality and interest in inhabiting certain rural localities, mainly the hinterland of cities and recreationally attractive areas X XX XXX Development of the non-profit sector, active community life, developing influence of the non-profit sector also in the field of cultural, health and social services XX XX XX Supra-regional sphere of action of regional hospitals in specialised fields X X X Existence of 5 universities in the NUTS II Region, offering fields of study in the technical, economic and natural sciences and humanities XX X X Increase in the general level of the population’s education X X X A region with high-quality environment, without extremely heavy environmental burdens X X Large conservation areas, including the Krkonoše Mountains National Park. Existence of a biospheric reservation. X Significant natural resources – mineral wealth, forests, lands, rich underground and surface water resources – an area important in terms of water supply and distribution X WEAKNESSES Insufficient material and technical equipment for teaching at several schools XXX XXX XXX Inadequate condition of many school premises and buildings XXX XXX XXX Existence of unutilised and dilapidating buildings and neglected areas in the region (mostly agricultural buildings, buildings for civic amenities and other) and low interest in their revitalisation XXX XXX XXX Disturbed environment in the industrial and urbanised areas with a higher concentration of industry; old environmental burdens unresolved XXX XXX X A lack of stabilised business entities and job opportunities in the rural areas, a missing network of shops and services, low mobility of labour force due to bad transport serviceability XXX Inadequate or missing spaces for cultural, leisure and other community activities in small municipalities XXX A persisting emission burden, mostly from small, medium and mobile sources XX XX XX

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of pollution, an increased noise load, particularly in municipalities with an unresolved transit transport A scattered dwelling structure – a large number of small municipalities vs. high population density in agglomeration areas X X XX A highly eccentric position of regional cities within the Hradec Králové and the Pardubice-Regions X X X Bad social infrastructure and insufficiently secured services for civic amenities in the country XXX Insufficient technical equipment and information sharing across the health infrastructure XX XX X A high proportion of prefab house apartments found in the cities, bad technical condition of the prefab houses XX XX OPPORTUNITIES Continuing optimisation and increasing quality and technical equipment of the health, social services, development of new services XXX XXX XXX Improving conditions for the development of organisations, synergies and activities in the field of the population’s leisure XX XX XX A higher quality of education at all types of school through modernised school equipment, including high-quality learning tools, devices and computers X X X Supporting alternative or super-standard education programs X X X Reconstruction of school premises and buildings X X X Development of environment-oriented and multifunctional agriculture focusing on the preservation of landscape functions as a source of new jobs in the country X XXX Using waste for power and materials and supporting utilisation of products made from wastes X X X Defining indicators for sustainability in each region X X X A higher use of support programs to support agriculture, forestry and rural development XXX Creating an appropriate environment (both legislative and financial) and strengthening focus on using local renewable sources of energy and on using secondary raw materials X X X Using agrotourism as an alternative source of income and job opportunities X XXX Ensuring protection of a first-rate land stock for the sustainability of landscape and natural values X X XX THREATS Growth of social-pathological and other undesirable phenomena (crime, drugs, gambling, alcoholism, deteriorating health condition of the population, etc.), particularly in the urban areas XXX XXX XX An overall long-term decrease in population, mostly by natural movement, a deteriorating demographic structure of the population, gradual population ageing, an increasing share of old and handicapped citizens as a result of the adverse demographic situation XX XX XX Development of unsuitable economic activities having an impact on the environment, increasing eutrophication of waters, insufficient landscape care XX XX XX Growth in the number or areas of problematic microregions due to a lack of job opportunities X XXX Another decline in agricultural production leading to land disturbance XXX Insufficient attractiveness of job opportunities in the field of agriculture for young and qualified people XXX An unbalance between landscape and environmental protection conditions and requirements for regional development, non-compliance with the principles of sustainability , useless and inappropriate appropriations of high-quality land stock X X XX Environmental quality jeopardized as a result of a growing and non-channelised individual motor transport XX XX XX Continuing absence of a lifelong education system and qualification recognition and certification systems X X X Relation: X – very weak to weak, XX – medium to strong, XXX – very strong

6.4.D Area of Intervention 2.1: Development of Regional Centres

The goal of Support Area 2.1 – Development of Regional Centres is to strengthen the role of cities as poles of growth and development in the region. Support will be realized solely by integrated and holistic means – through an integrated plan for city development (hereinafter UIDP).

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The definition of the IUDP: an IUDP includes a set of time related actions (projects) which are implemented: A) In a selected zone of a municipality (zone based approach). The IUDP in principle covers for example the following types of interventions: Regeneration and revitalisation of brownfields Revitalisation of specific municipal zones Modernisation of public space Development of infrastructure in the area of schools and education Development of health care infrastructure Strengthening of social cohesion, quality of life, health of urban population

The purpose of the zone based integrated urban development approach is to concentrate financial resources on a limited selected zone of a municipality and to tackle all the existing problems (deprived area) or to support growth potential (growth pole) in a complex way in this zone.

B) Through a thematic integrated approach (e.g. urban public transport, greenery) in the whole municipality.

Consequently, the integrated approach should achieve a defined target of a selected urban zone or of a thematic area of a given municipality.

Minimum size of the IUDP budget is set as 10 MEUR in order to reach sufficient concentration of financial resources and to avoid their scattering. The managing authority of the ROP Northeast commits itself further make effort to reach 15 MEUR as average value of the IUDPs.

The IUDP contains activities co-financed by the ROP Northeast. It can also mention, separately for information, important projects in the selected zone of the municipality or in the selected thematic area of a given municipality which are co-financed from other operational programmes. However, these important projects to be co-financed from other (thematic) Operational Programmes are operationally not part of the IUDP. Those projects co-funded from other (thematic) operational programmes will get during the evaluation by the relevant MA of the corresponding OP 10 % bonification in line with the government resolution No. 883 of 13 August 2007.

UIDP Area of Focus Indicative amount spent from the ERDF via the IUDP in municipalities with more than 50,000 inhabitants is mentioned under the code 61 in categorization of intervention - Integrated projects for urban a rural regeneration and it represents 87,051,270 EUR.

Cities with population greater than 50,000 residents are obligated to prepare an UIDP in order to draw on the fund within the Area of Intervention 2.1 – Development of Regional Centres, which is focused on the development of these cities. Specifically, within the ROP „Northeast“ framework, the following cities are in question:

No. of city inhabitants as of Region City January 1, 2006 LBK Liberec 97,950 HK Hradec Králové 94,431 PK Pardubice 94,431

In the cities above, individual projects within Support Area 2.1 – Development of Regional Centres cannot be presented. The MA of the ROP may also publish call for proposal for IUDP for municipalities with < 50,000 inhabitants. These IUDPs will not be financed from the above mentioned IUDP funding under the urban priority axis dedicated only to towns with more than 50,000 inhabitants. Doing that, the MA of the ROP may adjust the IUDP provisions (modify the IUDP minimal budget) for municipalities with less than 50,000 inhabitants taking into account geographic, demographic and economic potential of such municipalities in the region.

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Under the code 61 in categorization of intervention - Integrated projects for urban a rural regeneration – financial means are reserved only for UIDP in municipalities of over 50,000 inhabitants.

Indicative amount spent from the ERDF determined for projects realized in the rural areas (in municipalities of less than 5,000 inhabitants) represents 44,639,117 EUR.

Areas of intervention of the IUDP approach The IUDP is designed to tackle: Deprived areas (zones) with a concentration of negative phenomena, such as high unemployment, criminality, social exclusion, etc. Growth areas; there, the leverage effect of structural funds may be used to enhance the competitiveness of the zone. Thematic area of a municipality A geographically limited zone for the realization of the IUDP is a continuous area in the territory of the municipality which should be selected on the basis of the following criteria:

A) Deprived area – in a regional context shows unfavourable values of at least 2 indicators based on article no.47 Implementing Commission Regulation 1828/2006: a) a high level of poverty and exclusion; b) a high level of long-term unemployment; c) precarious demographic trends; d) a low level of education, significant skills deficiencies and high dropout rates from school; e) a high level of criminality and delinquency; f) a particularly rundown environment; g) a low level of economic activity; h) a high number of immigrants, ethnic and minority groups, or refugees; i) a comparatively low level of housing value; j) a low level of energy performance in buildings.

B) Area with high growth potential is characterized by some of the following indicators: a) High concentration of economic activities b) High potential for stimulation of business and development of services c) Significant employment in administration and service sector d) High concentration of educational activities e) High importance of the transport system providing the citizens with the mobility and contributing to the development of the municipality f) High importance for assurance of health, social, culture and educational needs of citizens, the improvement of life quality in the municipality

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g) High innovation potential, especially in relation to the development of the business sector and educational institutions, aimed at reaching synergies

IUDP preparation In the initial phase Managing authority of the OP launches a call for proposals inviting municipalities to prepare and submit IUDP proposals. Managing authority specifies in this invitation the type and characteristics of an IUDP, its content, the selection criteria, etc.. Consequently the municipality prepares an IUDP (selects the zone/theme on the basis of the above indicated criteria, determines the strategy and quantifies goals, consults with partners, etc.). The municipality can prepare and submit several IUDPs, whose justification and prioritization is based upon the vision of the municipality's of the needs of selected zones/theme.

The integrated urban development plan should contain among others the following information: • Socio economic analysis and SWOT analysis of the municipality • Justification for selection of the given zone/theme in the municipality on the basis of above mentioned criteria • Zone / theme area description • Quantification of targets; definition of indicators • Description of expected results • Description of partners, their involvement in both the preparation and implementation of the IUDP (application of partnership principle) • Budget and time schedule (description of the means of financing) • Description of administrative capacity and management of the IUDP. • Impact of the IUDP on horizontal themes etc. • Important projects co-financed from other operational programmes can be mentioned in the IUDP but they do not represent operationally the part of the IUDP).Their list shall be annexed to the IUDP • Description of activities to achieve defined IUDP target (including indicative list of principal projects)

Evaluation of IUDP The municipality submits an IUDP to the OP Managing Authority which evaluates and approves/refuses it. While evaluating the IUDP, the OP Managing Authority pays special attention to: • Criteria set by the call for proposal • Justification of selected zone / thematic area, analysis of initial situation for the IUDP implementation strategy • defined target, selected strategy, indicative list of actions / projects to achieve the chosen target, budget and time schedule, foreseen results, respect of partnership principle, impact on horizontal themes, administrative capacity, management of the IUDP, indicators etc. • technical quality and maturity of the proposed IUDP Once the IUDP is approved by the Managing authority the municipality pre-selects most suitable projects to reach the defined objective of the IUDP. The pre-selection of individual projects is in the competence of the municipality, which in line with principles of transparency, equal opportunities and respect of partnership principle establishes procedures for the assessment and selection of projects. he projects pre-selected by the municipality are then submitted directly to the MA OP…, which assesses them. The MA of the OP… can reject these pre-selected projects only on the basis of the formal / technical (e.g. ineligibility, insufficient budget). IUDP implementation During the implementation phase of the IUDP the municipality follows closely progress of all projects and reports to the Managing authority. Individual projects are implemented by the project holder (the municipality or its partners). Managing authority monitors projects as in the case of all other projects within the OP. The interventions implemented via the IUDP will be carried out while respecting the legislative framework of the Czech Republic and the European Communities (especially in relation to the public

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procurement, rules for state aid, principles of free competition, eligibility etc.) to ensure the effective use of EU Structural Funds, as well as to ensure public interest and to prevent undue profits.

Focus of Area of Support 2.1 – Development of Regional Centres The support is aimed at regenerating and revitalizing brownfields located within urban areas designed for citizen facility development or development of business activities. The subject of this support will be all types of brownfields excluding brownfields in which activities under OKEČ No 15 – 37 section D Processing industry and strategic services, technological centres (a detailed account is available in OPPI subprogramme ICT and strategic services) and activities of agriculture character or touristic activities will be consequently carried on. The purpose of regeneration and revitalization is to make them an integral part of active urban life, as well as at renewing selected urban quarters and buildings to increase urban attractiveness and the quality of life in them, including revitalisation and landscaping of the public spaces leading to the restoration of their functional use. The Area of Intervention further focuses on the development of infrastructure in the field of education and training and in the field of health and social affairs to increase the life quality standards with respect to sustainable residential development and to developing the human resource potential, including strengthening of social cohesion and health of the urban populations. Local roads within the framework of the present Area of Intervention may be treated only as part of an integrated approach to the solution of the region’s problems under the supported activity. Support is not focused on the area of housing and regeneration of common areas within problematic housing estates.

6.4.D.1 Specification of the Area of Intervention • Regeneration and revitalization of brownfields and investing into the transportation and technical infrastructure of industrial zones and smaller-sized localities • Regeneration of selected city areas and infrastructure development in the area of education, healthcare and social affairs

6.4.D.2 Global and Operational Targets of the Area of Intervention Global target : • Strengthening a balanced economic and social development of big cities as regional centres Operational Targets: • To regenerate and revitalise the urban environment • To develop an infrastructure in the field of education and training, health and social affairs

6.4.E Area of Intervention 2.2: Urban Development

The Area of Intervention 2.2. “Urban Development” focuses on supporting the development of cities in the Northeast Cohesion Region with a population over 5.00018. The support is aimed at regenerating and revitalizing brownfields located within urban areas designed for citizen facility development or development of business activities. The subject of this support will be all types of brownfields excluding brownfields in which activities under OKEČ No 15 – 37 section D Processing industry and strategic services, technological centres (A detailed account is available in OPPI) and activities of agriculture character or touristic activities will be consequently carried on. In this area of support, only brownfields under the ownership of public entities will be supported. The support´s purpose of regeneration and revitalization is to make them an integral part of active urban life, as well as to renew selected urban quarters and buildings to increase urban attractiveness and the quality of life inside them, including revitalization and landscaping of public spaces leading to the restoration of their functional use. The Area of Intervention further focuses on the development of infrastructure in the field of education and training and in the field of health and social affairs to

18 According to ČSÚ data as at 01.01.2006

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increase the life quality standards with respect to sustainable residential development and to developing the human resource potential, including strengthening of social cohesion, health and safety of urban population. Local roads within the framework of the present Area of Intervention may be treated only as part of an integrated approach to the solution of the region’s problems under the supported activity. Support is not focused on the area of housing and regeneration of common areas within problematic housing estates.

6.4.E.1 Specification of the Area of Intervention • Regeneration and revitalization of brownfields 19 and investment into transport and technical infrastructure of industrial zones and smaller-sized localities • Renewal of selected city parts and development of infrastructure in the fields of education, health and social matters

6.4.E.2 Global and Operational Targets of the Area of Intervention Global target : • To strengthen economic and social development of cities Operational Targets: • To regenerate and revitalize the urban environment • To develop an infrastructure in the field of education and training, health and social affairs

6.4.F Area of Intervention 2.3: Rural Development

The Area of Intervention 2.3 “Rural Development” focuses on supporting the development of rural municipalities in the Northeast Cohesion Region with a population ranging between 500 and 5.000.20 Regions and organizations founded by them can also carry out projects in municipalities with less than 500 residents. As part of the field, activities are supported which aim at regenerating and revitalizing brownfields located within urban areas designed for citizen facility development or development of business activities. The object of supported activities will be all types of brownfields excluding:: • brownfields with tha extent up to 5 ha, on which agriculture activity was operated in the past and that are located in municipality with less than 2000 habitants. • brownfields in which activities under OKEČ No 15 – 37 section D Processing industry and strategic services, technological centres (A detailed account is available in OPPI) and activities of agriculture character will be consequently carried on. • brownfields with the future use for tourism.

In this area of support, only brownfields under the ownership of public entities will be supported.The purpose of regeneration and revitalization is to make them an integral part of active life, as well as at rural development, at improving quality of life in the rural areas, chiefly by strengthening the units of

19 The object of supported activities will be all types of brownfields excluding:: • brownfields with tha extent up to 5 ha, on which agriculture activitiy was operated in the past and that are located in municipality with less than 2000 habitants. ¾ brownfields in which activities under OKEČ No 15 – 37 section D Processing industry and strategic services, technological centres (A detailed account is available in OPPI) and activities of agriculture character will be consequently carried on..

19 Brownfields – uncared and currently unused or little used sites and facilities that have lost their function and use, which are abandoned or unused or little used.

20 According to ČSÚ data as at 01.01.2006

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rural settlement and their infrastructure of public utility services for the population, including revitalization and landscaping of the public spaces leading to the restoration of their functional use. The Area of Intervention further focuses on the development of infrastructure in the field of education and training and in the field of health and social affairs to increase the life quality standards with respect to sustainable residential development and to developing the human resource potential, including strengthening of social cohesion, health and safety of the urban populations. Local roads within the framework of the present Area of Intervention may be treated as part of an integrated approach to the solution of the region’s problems under the supported activity. Support is not focused on the area of housing and regeneration of common areas within prefab housing estates.

6.4.F.1 Specification of the Area of Intervention • Regeneration and revitalization of brownfields21 and investments into transport and technical infrastructure of smaller industrial zones and localities • Rural development, improving the quality of life in rural areas and development of infrastructure in the fields of education, health and social matters

6.4.F.2 Global and Operational Targets of the Area of Intervention Global target : • To increase attractiveness of the country for the life of its people Operational Target: • To regenerate and revitalize the rural environment, including its cultural heritage • To develop an infrastructure in the field of education and training, health and social affairs • To introduce sustainability and the local Agenda 21 in self-administration activities

6.4.G Categorization of the Areas of Intervention

Category Designation 61 Integrated Projects for Urban and Rural Regeneration 75 Education Infrastructure 76 Health Infrastructure 79 Other Social Infrastructure 80 Promoting partnerships, pacts and initiatives through the networking of relevant stakeholders

6.4.H Form of Support

Non-returnable direct aid (subsidy).

21 The object of supported activities will be all types of brownfields excluding:: • brownfields with tha extent up to 5 ha, on which agriculture activitiy was operated in the past and that are located in municipality with less than 2000 habitants. ¾ brownfields in which activities under OKEČ No 15 – 37 section D Processing industry and strategic services, technological centres (A detailed account is available in OPPI) and activities of agriculture character will be consequently carried on.

26 Brownfields – uncared and currently unused or little used sites and facilities that have lost their function and use, which are abandoned or unused or little used. .

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In the new programme period 2007-2013, the co-financing rate from the EU (SF) funds will only be applied to eligible public spending. The amount of support from the structural funds (ERDF) may reach as high as 85% of the total eligible public outlay for the projects. In cases in which the project is based upon public support in the sense of No. 87 Par. 1 Founding Treaty of the European Community, Commission Regulation no. 1628/2006 dated 24.10. 2006 concerning the use of Article 87 and 88 of the Contract for Internal Regional Investment Support will be applied. According to the regional intensity map of public support approved for the Czech Republic for the 2007-2013 period, the maximal intensity of support provided does not exceed 40% of eligible outlays for large firms, 50% for midsized firms and 60% for small businesses. In certain cases, it is also possible to apply ES Regulation (ES) no.1998/2006 concerning the use of Article 87 and 88 of the Contract on De Minimis Support, it is also possible to provide de minimis support in the area of transport.

In order to provide for a greater concentration of investments and to prevent fragmentation of resources projects to be aided will be only those with a minimum amount of eligible expenditure as indicated in the below table:

Area of intervention Minimum Total Eligible Expenditure (min. CZK) 2.1 Development of regional centres 5 (for 1 action within UIDP)22 2.2 Development of towns 5 2.3 Development of rural areas 1

There are only 2 activities within the areas of intervention 2.2 and 2.3 in which also projects with a lower minimum amount of total eligible expenditure can be aided, viz: 1) Investment into equipment and furnishing of secondary schools conditioning the introduction of new educational programmes or alternative educational forms 2) Investment into equipment and furnishing in connection with extended education offer. Area of intervention Minimum Total Eligible Expenditure (mil. CZK) 2.2 Development of towns 1 2.3 Development of rural areas 0.5

6.4.I Types of support

Individual projects, individual projects in the framework of UIDP.

Funds may employ the Jessica financial engineering tool for the preparation and financing of projects of cities, municipalities, municipal clusters and organizations founded by them under ROP „Northeast“ for the purpose of enhancing the financial effect and recycling finances. For sustainable urban development in cities, a unified approach will be promulgated. For this reason planning and decision- making about municipal investments must be made on the basis of UIDP The Managing Authority will consider, within the framework of the new JESSICA initiative, the possibility of a contribution to urban development funds which invest in direct revenue-generating municipal projects on the basis of UIDP.

6.4.J Indicators and Their Quantification

Specification and quantification of the indicators to evaluate the Specific targets of Priority Axis/Areas of Intervention are included in Chapter 7 – Indicators for Monitoring and Evaluation.

22 10 mil. EUR for 1 UIDP, resp. Managing Authority will strive for a minimum average UIDP size to be 15 mil. EUR

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6.4.K Beneficiaries

• Regions • Municipalities • Organizations established or founded by the regions • Organizations established or founded by municipalities • Voluntary municipal unions • Non-governmental non-profit organizations • Providers of health and social services (entities with legal subjectivity) • Economic Chamber and its bodies • Interest groups of legal entities

These Beneficiaries will fulfil the individual intervention fields of this Priority Axis. A detailed specification of the Beneficiaries by intervention field is given in the implementing document.

6.4.L Target Groups

• Regional population and people working in the region • Local business entities and entities ensuring regional services • Entities operating in the non-profit sector • Domestic and foreign visitors to the region and tourists

6.4.M Flexibility (Cross-financing)

The operational program is financed only by ERDF. Cross-financing provides the opportunity for supplementary methods within a given limit per priority axis to finance measures (activities) falling under the ESF, provided such measures (activities) are necessary for satisfactory implementation of projects and are directly tied to them. In application of cross-financing, it shall be proceeded in accordance with “Directives for cross-financing for programming period 2007-2013” released on a national level, so that all the relevant EC directives are hold on to.

Cross-financing may be used for these activities:

o educational and social activities accompanying investment into the infrastructure

o education of personnel having to do with the introduction of new services (educational, social, leisure time) o the creation of educational programs connected to the educational infrastructure

The applicant chooses the possibility for cross-financing or activities implemented under cross- financing directly in the subsidy application. The necessity and relevance of these activities will be judged during project evaluation, and only when the project is approved and chosen for financing will the allocation for these activities be stated in the Contract for Subsidy Provision. The applicant shall state expenditure trends in each monitoring report and payment request, making sure that the given limit of overall eligible project expenditures is not exceeded. This will ensure holding to the given limit for cross-financing on the priority axis.

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- OP LZZ – Area of intervention 3.1 Support to social integration and social services, Area of intervention 3.2 Support to social integration of the members of Romany localities, Area of intervention 3.3 Integration of socially excluded population groups on labour market, and Area of intervention 2.1 Strengthening active policies of employment (for activities targeted onto return onto labour market and in the society, including innovative tools, extension or completion of education for members of target groups, a.o. ethnic minorities) - OP LZZ – Area of support 3.1 Support to social integration and social services (for education focused on strengthening of cohesion and development of partnerships at local and regional levels – in towns and rural areas) - OP LZZ – Area of intervention 3.4 Equal opportunities of males and females on labour market and harmonization of working and family life (for development of education provided to employers and employees and to other subjects working in the area of harmonization of working and family life) - Exchange of experience and transfer of good practice between member countries in the solution of social inclusion of specific target population groups (persons socially excluded or threatened by social exclusion, a.o. ethnic minorities) and further professional education (OP LZZ – Area of intervention 5.1 International cooperation)

The applicant will choose the possibility of cross-financing or activities to be implemented within cross- financing as early as in his application for subsidy. The need and relevance of these activities will be assessed during the project evaluation, and in case that the activities and the project are selected for financing, the financial allocation for them will be stated in the contract on aid provision. Development of the withdrawal within the framework of cross-financing will be provided by the applicant in each monitoring report with the request for payment, where non-overdraft of the set-up limit – contribution from the Community will be watched. Large projects are not considered in the Cohesion Region Northeast.

6.4.N Large Projects

Not considered for the Northeast Cohesion Region.

6.4.O Coordination with Interventions of Other Programmes

The ROP „Northeast“ Priority Axis 2 “Development of Urban and Rural Areas” bears a relation to the following operational programmes with a nationwide or regional focus: Integrated Operational Programme The scope of Priority Axis 2 ROP „Northeast“ includes the “Development of Urban and Rural Areas”, especially by improving the infrastructure of public services, particularly in the health, education, training and social services, by improving public spaces, regenerating and revitalising any improperly used or unutilised areas and buildings, and by supporting State administration in the regions, while applying projects aimed at the region’s sustainability. Another part of the ROP „Northeast“ is support of activities related to the preservation of the cultural heritage and traditions. On the other hand, IOP focuses on the infrastructure designed to increase the population’s security, ensure the prevention and find risk solutions by implementing specific projects at national level for all bodies of the life support system (police, fire department, first-aid service). Another sphere of activity is the strengthening of capacities (professional base) of the regional State administration bodies. These interventions further include building a data- and information-base for the management, monitoring and evaluation of the region’s sustainability, aimed at improving the quality of the information environment, both at the national and regional level. As for the support of investment in the social integration and health care infrastructure, the IOP focuses on general investment projects within the defined national network of social and health care facilities. The IOP is further focused on taking central system action for the prevention of health risks and on the development of health and social care for persons disadvantaged by their health condition or age. On the other hand, the scope of the ROP „Northeast“ in this field includes the support for infrastructure projects in health and social services beyond the national network.

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Public interventions of the IOP and ROP „Northeast“ complement each other in the restoration and economic use of the immovable historical and cultural heritage, with the ROP „Northeast“ focusing on regenerating urban and municipal regions of local importance. The IOP merely considers national cultural monuments and monuments put on the UNESCO World Heritage List. The IOP complements the ROP „Northeast“ in improving the environment, particularly in the cities, through public interventions in the refurbishment of prefab apartment houses and complex revitalisation of the environment in the prefab housing estates. OP Business and Innovation Regeneration of brownfields with future use for business purposes (note: future use of the property will fall under OKEČ 15-37 or will concern strategic services or technology centres) on the condition that large projects will be supported. Regeneration of all other brownfields with the exception of future agricultural use will be supported via ROPs. The thematic scope of the ROP „Northeast“ is similar, except that it defines the subsequent use of these revitalized properties – as an infrastructure for civic amenities. The ROP „Northeast“ Priority Axis 4 focuses on regeneration and revitalization of the brownfields for business entities. OP Education for Competitiveness In the field of education, the boundary line between the ROP „Northeast“ and the Operational Programme “Education for Competitiveness” is defined mainly by the type of intervention. The ROP „Northeast“ public interventions, funded from the ERDF, focus on “hard” investment, i.e. on the support for the renewal of the physical infrastructure in education and training. On the other hand, the OP Education for Competitiveness, funded from the ESF, is focused on “soft” projects, including system changes, a support for qualification extensions and increasing the level of the population’s education in general. The public intervention fields of these two operational programmes do not overlap because of their different scopes. With the public interventions co-acting, considerable synergies can be achieved. Coordination between ROP and OP VK is mentioned in chapter 5.16. OP Human Resources and Employment Public interventions under the ROP „Northeast“ Priority Axis “Development of Urban and Rural Areas” focus on increasing quality of the infrastructure base for ESF interventions in the field of education, health and social services (the ROP „Northeast“’s emphasis being on the “hard projects”) and therefore mutual complementarity with the Operational Programme “Human Resources and Employment” is expected, the scope of which includes interventions focusing on the establishment and development of systems in the field of public services for employment with a nationwide impact. Coordination between ROP and OP LZZ is mentioned in chapter 5.16. EAFRD – Rural Development Programme From the EAFRD through the Rural Development Programme, renewable sources of energy, WWTP up to 2000 EO, local roads and waste management up to 5 mil. CZK in municipalities with a population less than 500, agricultural brownfields (brownfields having an agricultural basis) up to 5 ha in municipalities with a population less than 2000, as well as elementary civic amenities (education, health and social services) in municipalities with a population less than 500 will be supported. The ROP „Northeast“ has a similar focus, but its regional focus is different (municipalities with a population over 500), excluding activities related to the renewable energy sources, waste management and WWTP. From the EAFRD through the Rural Development Programme, fields and activities connected with the construction and reconstruction of local roads in municipalities with a population less than 500 are also funded. The ROP „Northeast“ Priority Axis and the aforementioned operational programmes complement and condition each other, and as specifically supported projects are implemented, they will create sufficient synergic effects to intensify the results and impacts of these programmes. At the same time, they will contribute to meeting the targets and priorities of the superior programme document (NSRR).

6.4.P Financial Plan

Tables with financial plans are contained in Chapter 9 – ROP „Northeast“ Funding.

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6.5 Priority Axis 3: Tourism

The relation of the ROP „Northeast“ to NSRR in the field of sustainable tourism in the Northeast Cohesion Region is very strong, as the most attractive mountain localities of theČRare found there, allowing tourists to spend their winter and summer holidays. In accordance with the findings of the NSRR, not even in this region has the tourist potential been fully used these days, which is due to an insufficient infrastructure and low quality of the basic and additional services but also to problems connected with skilled labour. The Priority Axis “Tourism” should therefore contribute to the development of sustainable tourism in the cohesion region, meeting the following NSRR Priority:

Picture No 20: NSRR priorities and aim of Priority Axis 3 Tourism NSRR Priorities

Competitive Business Sector Development of Sustainable Tourism Support for R&D Capacities and Innovation Education Increase of Employment and Employability Strengthening of Social Cohesion Development of Information Society Smart State administration Environmental Protection and Improvement Availability of Improvement Transport Balanced Regions Development Development of Urban Areas Development of Rural Areas

Priority Axis 3: Tourism

6.5.A State-of-the-art

A typical feature of the Northeast Cohesion Region is a great potential for natural beauties and historical-cultural monuments. Tourist-attractive places are followed by a great number of social, cultural and sporting events. There are areas attracting greater interest of tourists and other visitors, around which a richer offer for accommodation and catering capacities, active leisure, information centres, and a number of related tourism services is centred. The more intense development of tourism infrastructure and services thus more or less focuses on areas with a considerably higher potential for traditional tourism. There are objective conditions (natural environment, cultural and historical heritage, etc.) for all the segments of tourism identified in virtually all regions. However, subjective conditions for the development of tourism are very differentiated, with the region’s economic potential for tourism being fairly unbalanced. The coordination of tourism activities within the tourist regions is either completely missing, or insufficient. There is no systematic support for tourism organizations (destination companies) (mainly involving establishment of relationships in the public and private spheres on a partnership basis). What is also urgent is the need for increasing the quality and functional interconnection of the existing regional information systems, including among other things the network of tourist information centres. Activities and actions to ensure a standard level of certain services or products and of selected tourism infrastructure mainly required by foreign tourists are absent. These mostly include meeting the international service standards, which should be considered one of the necessary conditions for achieving a competitive tourism offer. Marketing focusing on the promotion of attractive localities is also insufficient.

November 7, 2007

Regional Operational Programme NUTS II Northeast

The tourism infrastructure in the region has undergone significant changes in recent years, chiefly by increasing the number of accommodation facilities and their sleeping capacity. The new construction, however, concentrated more on tourist centres of nationwide importance (the Krkonoše, Jizera Mountains) and only to a lesser extent on the other, less known centres. As a result, the demand for services is not satisfied because of low capacities or inadequate structures, but mainly because of the quality of accommodation facilities and services.

Tourism development in the region is limited by a lack of activity and invention of the tourism entities in creating program offers which would focus on several days’ stays, by an insufficient promotion of the region, and the level of information service remaining low. Yet, in addition to the tourism categories being considered traditional today (e.g. cycle tourism), the whole region has really good conditions for the development of other categories, within which a lot of new tourism products could be created, e.g. in the field of rural tourism, hippo tourism, adrenaline tourism, fortress and relaxation tourisms, etc. The ROP „Northeast“ Specific target will be met through Priority Axis 3 “Tourism” both by initiating the natural and the as yet unreleased potential in the field and by a free combination of business, partnership, promotion and IT supports, as well as a support for the preservation of cultural and natural heritage from internal and external resources, while respecting the region’s specifics.

Justification of the Type of Public Intervention Although the Northeast Region has, in the tourism field, a significant specific potential for market development, the private sector has failed to either discover this potential in many respects and for many reasons, or use and develop it sufficiently. Thus, the purpose of public intervention is, in the first place, to stimulate or directly initiate activities through which the tourism field in the region will continue to develop and the Strategic Target of the Priority Axis will be gradually met. The present justification should emphasize that no activities in those fields where the market can manage much better itself will be supported. The regions for implementing the public intervention are not strictly defined. As no specific types of region (or area) into which the public support should or should not be channelled have been specified in the ROP „Northeast“ socioeconomic analysis, the support is to be considered as more-or- less general, applying across the NUTS II Northeast Region, with an emphasis on supporting tourism development in the rural areas. Therefore, uniquely defined selection criteria will mainly be used to decide on granting support to individual projects. Even so, the public support under the present Priority Axis should preferably be channelled to areas with an insufficiently diversified potential for economic development and yet a high potential for tourism development. In such cases, direct support to business entities, particularly in the field of improving the quality of tourism infrastructure, is also justified. Here, the support may be granted to relatively small projects, regardless even of any generally declared integrated approach.

Sustainable tourism strategy

A marked portion of the cohesive NUTSII Northeast region is covered by NATURA 2000 lands (in broad terms, scores of locations). NATURA 2000 is a collection of protected lands being created within their boundaries by all member states of the EU, in keeping with the unifying principles. The goal of this collection is to provide protection for those species of animals, plants and nature areas which are, from a European point of view, the most precious, the most endangered, the rarest or whose appearance is limited to a particular area (endemic).

For the reasons indicated above, one of the goals of Priority Axis 3, Tourism, is also the introduction and development of projects corresponding to strategies for sustainable tourism. Directives concerning locations are contained in the recommendations to the states during network implementation. Articles 2 and 6 particularly concern tourism. In accordance with these (and also with other requirements), tourism projects in NATURA 2000 regions must respect biodiversity and, at the same time, the targets of both directives. It is inadmissible for any tourism project to be realized on this type of land to have a negative impact on that land. This is the subject of the acceptability criteria. The applicant must demonstrate, at a minimum, that the project has a neutral impact on the natural environment. If the project has a positive impact, it receives a point advantage in evaluating project points.

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6.5.B Global target and Specific targets of the Priority Axis

6.5.B.1 Global target of the Priority Axis “Tourism”

To increase effectiveness of using the region’s natural and cultural potential

The Priority Axis focuses on increasing the share of tourism in the region’s economic prosperity and rate of employment by using the region’s existing potential and improving the quality and scope of tourism infrastructure and services, while respecting the principles of sustainability. Efforts must be made to make tourism one of the factors decreasing the negative impacts of regional disparity.

The Priority Axis is conceived as an important instrument for the development of prosperity across the cohesion region. The proposed intervention fields have been elaborated into a number of measures focusing on the development of tourism infrastructure and services with an impact on job creation. Earnest efforts will also be made to support investment in improving the tourism infrastructure quality, including reconstruction of the cultural and technical monuments as the region’s tourist attractions. A specific form of support under this Priority Axis will include interventions directed towards ensuring better transport availability of the tourist areas and attractions. Activities supported under this Priority Axis will have to show a clear economic effect; in particular, they should attract visitors (especially tourists) from the other regions and from abroad and should also fit in the wider framework of tourism development in the tourist areas of the Northeast Cohesion Region. For the purpose of tourism support within the Northeast Cohesion Region, the Regional Operational Programme, under its Priority Axis “Tourism”, sets the following Specific targets, reflecting the needs for the development of tourism and resulting from a socioeconomic and a SWOT analysis. In their formulation, account was taken of the NSRR targets. The targets are in compliance with EC Regulation on the European Regional Development Fund.

6.5.B.2 Specific targets of the Priority Axis “Tourism”

• To improve the quality and extend the scope of infrastructure for tourism development • To improve the quality of tourism services and their effective coordination

Specific target – To improve the quality and extend the scope of infrastructure for tourism development This target focuses mainly on the support of investment in the basic and auxiliary infrastructure for tourism, that is, in the material and technical support as an important condition for establishing tourism within the region. Within the framework of the ROP „Northeast“, the Specific target is developed through the Area of Intervention 3.1 “Development of Basic Infrastructure and Supporting Activities in the Field of Tourism”.

Specific target – To improve the quality of tourism services and their effective coordination This target focuses mainly on the support of investment in improving a wide range of tourism services, support for creating new tourism products and programs (service packages) by using the existing potential, and for creating and ensuring a more effective and more focused coordination of the development and marketing activities in the Northeast Cohesion Region. The quality of the rendered services has the farthest-reaching influence on the region’s visitation rate, and hence on further general development of tourism in the region. Within the framework of the ROP „Northeast“, the Specific target is developed through the Area of Intervention 3.2 “Marketing and Coordination Activities in the Field of Tourism”.

Picture No 21: Target Tree – Priority Axis 3: Tourism

GLOBAL TARGET OF PRIORITY AXIS 3

To increase effectiveness of using the region’s natural and cultural potential

To increase the share of tourism in the region’s economic prosperity and rate of employment by using the region’s existing potential and improving the quality and range of tourism services, while respecting the principles of sustainability . To strive for making tourism one of the factors decreasing the negative impacts of regional disparity.

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Specific Target Specific Target

To improve the To improve the quality and extend quality of tourism the scope of services and their infrastructure for effective tourism development coordination

Area of Intervention 3.1 Area of Intervention 3.2

Development of Basic Infrastructure and Marketing and Coordination Activities in Supporting Activities in the Field of the Field of Tourism Tourism

6.5.C Strategy

The great opportunities for the development of tourism in the Northeast Cohesion Region include an expected increase in tourist attractiveness of theČRas a destination for international tourism, as the visitors of Prague spread into other regions, as well as an increasing interest of tourists in new specific tourism products and creation of a functional system for the coordination of tourism activities. As for the potential increase in attractiveness or likelihood of success, other opportunities come to the fore, such as developing new forms of tourism, using the good name of the well-known winter holiday centres to extend the general product called “winter tourism”, extending the range of services of the cultural institutions to develop tourism, increasing the significance of and using the cultural monuments to develop tourism and, last but not least, for developing crossborder cooperation. The Risks matrix ensues there are several threats of the highest importance and probability of event occurrence (e.g. the continuing absence of a true national tourism strategy or the non-existence of guarantees for long-term financial flows in the development of tourism, the deteriorating condition of historical buildings and tourism infrastructure due to their insufficient funding, the clogging-up of tourist areas by individual motor transport). A more detailed examination should be carried out of the risks resulting from e.g. an insufficient speed of development of an adequate organisational, management and information infrastructure for tourism, low competitive strength of some less attractive areas, an uncoordinated development and low quality of tourism services, a low level of coexistence between the conditions of environmental protection and the requirements for tourism development. The Strengths of high importance and deep impact of the Northeast Cohesion Region in the field of tourism particularly include a significant natural potential, the status of an attractive region well predisposed for the development of tourism, a variety of different types of landscape and attractive natural localities, a rich historico-cultural heritage of the region, including a monument put on the UNESCO list, and the status of an area suitable for yearlong holidays and sports activities. Other strengths should also be maintained and developed, such as the existing basic technical and tourist infrastructure, the high-quality network of traditional footpaths, the developing offer for and improving quality of the winter holiday centres of nationwide importance, etc. The Weaknesses matrix shows which solutions should be given priority. They include an insufficiently used tourism potential due to a non-systemic coordination and ineffective promotion, an inadequate composition and quality of the prevailing basic tourism infrastructure, an absence of (or small offer for) the auxiliary infrastructure and services (activities) in the winter and summer holiday

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centres and outside of these centres, an absence of a tourist information and orientation system in certain parts of the tourist regions, lacking finance capital (both private and public) for tourism investment, a small number of categorised and certified accommodation facilities, and an insufficient development and application of tourism organisation (destination management). Moreover, account is to be taken of the incomplete construction of cycletourist tracks, the small number of coherent tourism products, and the problems caused by a worse availability and an insufficient transport and technical infrastructure base of some of the tourist areas and attractions.

Table No 20: Coincidence Matrix of the thematic SWOT analysis and Specific targets Priority 3 Tourism

Coincidence Matrix of the thematic SWOT analysis and Specific targets - Priority 3 coordination - Tourism

SPECIFIC TARGETS To improve the quality and extend the scope of infrastructure for tourism development To improve the quality of tourism services and their effective SWOT STRENGTHS Significant natural potential, an attractive region well predisposed for the development of tourism, a variety of different types of landscape and attractive natural localities (water areas and streams, mountain cities, conservation areas…) XX XXX An area suitable for yearlong holidays and sports activities XXX XXX Basic technical and tourist infrastructure (hotels, boarding houses, facilities for sport enjoyment, marked footpaths) XXX XXX Developing offer for and improving quality of the winter holiday centres of nationwide importance XXX XX Rich historical-cultural heritage of the region, including a monument put on the UNESCO list (the castle in Litomyšl) X XXX Price compatibility of the basic tourism services in the international context X XXX A high-quality network of traditional footpaths XXX XX WEAKNESSES Uneven distribution of intensity of holiday-making and tourism in respect of the level of natural, sports and cultural offer in the NUTS II Northeast Region, a high disproportion between the level of development of the tourism infrastructure in the individual localities and holiday centres XXX XXX Lacking finance capital (both private and public) for tourism investment XXX XXX An insufficiently used tourism potential due to a non-systemic coordination and little promotion X XXX Problems caused by a worse availability and an insufficient transport and technical infrastructure base of some of the tourist areas and attractions XXX XX A small number of coherent tourism products XX XXX Insufficient development and application of tourism organization (destination management) X XXX Uneven and inadequate quality of the prevailing offer for accommodation and catering services; structure not meeting demand XXX XX Absence of (or small offer for) auxiliary infrastructure and services (activities) in the winter and summer holiday centres XXX XX Absence of a tourist information and orientation system in certain parts of the tourist regions X XXX Low yield of the accommodation capacities XXX XX An incomplete system of cycle paths (an incoherent system of cycle paths, absence of XXX XX

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services along the cycle paths, low-quality surfaces of the roads used) A small number of categorised ad certified accommodation facilities XXX XX Absence of professional associations of tourism businesses X XXX OPPORTUNITIES Increasing tourist attractiveness of theČRas a destination for international tourism XX XXX Developing new forms of tourism XXX XXX Increasing interest of tourists in new, specific tourism products XXX XXX Using the good name of the well-known winter holiday centres to extend the general product called “winter tourism” XXX XXX

Development of crossborder cooperation in the field of tourism XX XX Creation of a functional system for the coordination of tourism activities, based on mutual cooperation of the regions, private and state spheres, interest and professional organizations XX XX Growing interest of tourists in experiencing the regions’ cultural specifics (traditional crafts, folklores) X XXX Development of congress and incentive tourisms XXX XXX Extending the range of services of the cultural institutions to develop tourism X XXX Diffusion of the visitors of Prague to the other regions of theČR XX XX Increasing cultural significance of the cultural monuments and using these monuments to develop tourism XX XX Using sustainability principles to increase the tourist regions’ attractiveness and competitive strength; a gradual transition from quality certification to the next grade – environmental certification XX XX THREATS An outflow of a part of the foreign demand as a result of an inability to find an adequate offer (accommodation, catering, complex tourism products) and quality on the part of entities engaged in tourism XXX XXX Uncoordinated development and low quality of services in tourism (an insufficient offer for accommodation and gastronomic services) XXX XXX Low competitive strength of some less attractive areas XXX XXX A deteriorating condition of historical buildings and tourism infrastructure due to their insufficient funding XXX XX No long-term financial flows (resources) in the development of tourism guaranteed XXX XXX Clogging-up of tourist areas by individual motor transport as a result of neglecting the support for public transport, particularly railway transport XXX X Excessive occupancy of the renowned winter and summer holiday centres XXX X Insufficient speed of development of an adequate organisational, management and information infrastructure for tourism XXX XXX A low level of coexistence between the conditions of environmental protection and the requirements for tourism development XXX XX Continuing absence of a truly national tourism strategy X XXX Outflow of permanent population from the areas most valuable in terms of landscape and tourist attractiveness XX XX Legend: Relation: X – very weak to weak, XX – medium to strong, XXX – very strong

6.5.D Area of Intervention 3.1: Development of Basic Infrastructure and Supporting Activities in the Field of Tourism

This Area of Intervention develops the Specific target “To improve the quality and extend the scope of infrastructure for tourism development”. The purpose of the Area of Intervention is, first and foremost, to improve the quality of the existing potential for basic infrastructure in the region. As part of the activities mentioned below, projects will be supported that focus on increasing the standard of, and extending the offer for, accommodation and catering services and the follow-up services in concerned tourist areas of the Northeast Cohesion Region. The Area of Intervention also focuses on supporting the improvement of quality and extension of a wide range of the standard and as yet non-standard features of the auxiliary infrastructure that contribute to the region’s tourist attractiveness. Contributing further to the region’s attractiveness will be a support for revitalizing the historical-cultural and technical monuments with a clearly definable relation to the tourism development. Ensuring better transport availability of the tourist

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centres and tourist attractions, including provision of any necessary technical background, is another indispensable part. The public intervention under this Area of Intervention should preferably be channelled to areas with an insufficiently diversified potential for economic development and yet a high potential for tourism development. Considering the tourism market and its demand trends, as well as the development of untraditional forms of tourism and tourist attractions, it is not possible or appropriate to strictly define in advance any specific region for channelling the support. In such cases, direct support to business entities, particularly in the field of improving the quality of tourism infrastructure, is also justified. The priority focus of the support shall be on projects created on the basis of an integrated approach.

6.5.D.1 Specification of the Area of Intervention • Modernization and extension of capacities for the basic tourism infrastructure • Reconstruction and development of the auxiliary tourism infrastructure • Support for revitalizing historical-cultural and technical monuments, with the aim of increasing tourist attractiveness of the region • Support for ensuring availability of the tourist attractions • Creation of products and promotion of the tourism infrastructure supported under the respective Area of Intervention

6.5.D.2 Global and Operational Targets of the Area of Intervention Global target : • High-quality infrastructure and a wide range of services for the development of tourism within the region Operational Targets: • High quality and sufficient capacity of the basic tourism infrastructure • Developed auxiliary tourism infrastructure within the region • Good availability of the tourist-attractive areas and monuments for the visitors • Use of the region’s attractions and specifics through a wide range of tourism products

6.5.E Area of Intervention 3.2: Marketing and Coordination Activities in the Field of Tourism

This Area of Intervention develops the Specific target “To improve the quality of tourism services and their effective coordination”. The primary aim is to make the existing systems of tourism development marketing and coordination more effective. The support under this Area of Intervention will mainly concern activities and development of tourism organisation (destination management), establishment of partnerships (PPP) in tourism, and support for tourism marketing activities. Another integral part is the support for building, developing, and interrelating information systems within the tourist areas of the Northeast Cohesion Region. As part of the activities below, projects will be supported that focus on developing different working papers of an analytical and concept nature, needed for planning in the tourism field. Through the activity concerning introduction of new tourism products and programs, this Area of Intervention is logically interrelated with the Area of Intervention 3.1. Much like in the Area of Intervention 3.1, it is desirable, despite the declared general support across the region, to channel the public support under this Area of Intervention preferably to areas with an insufficiently diversified potential for economic development and yet a high potential for tourism development. However, like in the Area of Intervention 3.1, it is not possible or appropriate to strictly define in advance any specific region for channelling the support. Under the present Area of Intervention, a significant development effect can be achieved using the “soft” forms of support listed below, particularly in areas with a diversified economic potential, where tourism is not the key source of growth. Supported activities that can be implemented as part of the tourism organisation – destination management (demand analysis, marketing, product offer etc.) will be mainly relevant for these areas. The priority focus of the support shall be on projects created on the basis of an integrated approach.

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6.5.E.1 Specification of the Area of Intervention • Support for the development of analytical and concept papers in the field of tourism • Support for the establishment and operation of tourism organisations and support for partnership in the field of tourism • Tourism marketing support • Building and development of tourist information systems • Support for tourism products and programs

6.5.E.2 Global and Operational Targets of the Area of Intervention Global target : • Lasting interest of tourists in the region, ensured through coordinated development and promotion of the local tourism products Operational Targets: • High-quality marketing and promotion of tourism products in the region • Functionally interrelated information systems and coordination of tourism in the region • Effective introduction of new attractive tourism products

6.5.F Categorization of the Areas of Intervention

Categories of aid from structural funds for the program period 2007-2013 are defined in Appendix No. II to the implementing regulation on detail rules for the application of the general regulation, consisting of an objective definition of the eligible Area of Intervention and its respective code. Each Area of Intervention may include one or more categories, depending on Specific/Operational Targets of the Area of Intervention.

Category Designation 24 Cycling paths 55 Promotion of natural assets 56 Protection and development of natural heritage 57 Other assistance to improve cultural services 58 Protection and preservation of the cultural heritage

6.5.G Form of Support

Non-returnable direct aid (subsidy). In the new program period 2007-2013, the co-financing rate from the EU (SF) funds will only be applied to eligible public spending. The amount of support from the structural funds (ERDF) may reach as high as 85% of the total eligible public outlay for the projects. In cases in which the project is based upon public support in the sense of No. 87 Par. 1 Founding Treaty of the European Community, Commission Regulation no. 1628/2006 dated 24.10. 2006 concerning the use of Article 87 and 88 of the Contract for Internal Regional Investment Support will be applied. According to the regional intensity map of public support approved for the Czech Republic for the 2007-2013 period, the maximal intensity of support provided does not exceed 40% of eligible outlays for large firms, 50% for midsized firms and 60% for small businesses. In certain cases, it is also possible to apply ES Regulation (ES) no.1998/2006 concerning the use of Article 87 and 88 of the Contract on De Minimis Support, it is also possible to provide de minimis support.

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Area of intervention Minimum Total Eligible Expenditure (mil. CZK) 3.1 Development of basic infrastructure and accompanying 5 activities in the area of tourism 3.2 Marketing and coordination activities in the area of tourism 1

6.5.H Type of Support

Individual projects.

6.5.I Indicators and Their Quantification

Specification and quantification of the indicators to evaluate the Specific targets of Priority Axis/Areas of Intervention are included in Chapter 7 – Indicators for Monitoring and Evaluation.

6.5.J Beneficiaries

• Regions • Municipalities • Organizations established or funded by regions and municipalities • Voluntary municipal unions • Non-governmental non-profit organizations • Interest groups of legal entities • Business entities

These Beneficiaries will fulfil the individual intervention fields of this Priority Axis. A detailed specification of the Beneficiaries by intervention field is given in the implementing document.

6.5.K Target Groups

• Regional population and people working in the region • Domestic and foreign visitors to the region and tourists • Local entrepreneurs and entities ensuring services • Entities operating in the non-profit sector, professional associations, municipalities and municipal unions

6.5.L Large Projects

Not considered for the Northeast Cohesion Region.

6.5.M Flexibility (cross-financing)

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accordance with “Directives for cross-financing for programming period 2007-2013” released on a national level, so that all the relevant EC directives are hold on to.

In Support Area 3.2 Marketing and Coordination Activities in the Area of Tourism, support is directed into the following priority:

Cross-financing may be used for the following activities:

o educational activities concerning the need for human resources development in the area of tourism (in particular, education of tourist agents)

6.5.N Coordination with Interventions of Other Programmes

The ROP „Northeast“ Priority Axis 3 “Tourism” bears a relation to the following operational programmes with a nationwide or regional focus: Integrated Operational Programme The joint themes of the ROP „Northeast“ and the Integrated Operational Programme include tourism control and management support, implementation of standards, promotion, development of tourism products and marketing support. While the focus of the ROP „Northeast“ interventions rests solely on activities with a regional impact, the IOP directs its attention on projects of supra-regional, national, or international character. Another IOP’s Area of Intervention bearing a relation to tourism is a national support for using the potential of the cultural heritage. It involves construction and modernization of buildings used for the protection, preservation and other use of cultural heritage, creation of new products in the field, and presentation of the cultural wealth to the advantage of tourism. The IOP further supports a complex restoration and use of cultural monument networks with a tourist potential that are situated in several NUTS II Regions. OP Czech Republic – Republic of Poland 2007 - 2013 The Operational ProgrammeČR– Poland 2007 - 2013 focuses on using the historical and cultural heritage for the development of cultural infrastructure and services in the border area, thus complementing similar activities of the ROP „Northeast“ directed to inside of the region. The difference between these programmes mainly consists in a different territorial focus of their supports. OP Free State of Saxony – Czech Repubic 2007 - 2013 The Operational Programme Free State of Saxony – Czech Repubic 2007 - 2013 focuses on developing the tourism potential in creating marketing strategies and cooperation. The ROP „Northeast“ contains a similar focus in the field of marketing and coordination activities that aim at using the tourism potential across the region. The difference between these programmes mainly consists in the territorial focus of their supports. EAFRD – Rural Development Programme From the EAFRD through the Rural Development Programme (PRV), tourism infrastructure for beginning entrepreneurs with business history no longer than 2 years and project placement in a municipality no larger than 2 000 residents is supported. The support focuses on redevelopment and construction of low-capacity accommodation and catering facilities, facilities for sport enjoyment, and building of turistic footpaths. An integral part is a support for the purchase of technology and devices, equipment, computers, but also the preparation of marketing studies, etc. The ROP „Northeast“ has a similar thematic focus in the field of modernising and increasing capacities of the basic and auxiliary infrastructure for entrepreneurs with a two-year accounting period closed or entrepreneurs with

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business history no longer than 2 years and project placement in a municipality larger than 2 000 residents. The amount of investment expenditure per project is not limited.

In the area of preserving cultural heritage, the PRV focuses on investment in municipalities with a population less than 500, while in the ROP „Northeast“, the support aims at investment in municipalities with a population over 500.

6.5.O Financial Plan

Tables with financial plans are contained in Chapter 9 – ROP „Northeast“ Funding.

6.6 Priority Axis 4: Development of Entrepreneurial Environment

The Priority Axis is conceived as an important tool for achieving the ROP „Northeast“ Global and Specific targets in terms of increasing the region’s attractiveness for business and investment. The areas of public interventions focus mainly on improving the entrepreneurial environment by supporting investment in the infrastructure, developing cooperation between businesses and education institutions and labour offices, and supporting innovation activities. Public interventions of the Priority Axis will contribute to better usability of the existing neglected and unutilized buildings and premises and areas suitable for business use. Other benefits of the Priority Axis may also be perceived in the area of increasing employment of the education institution leavers by enabling them to acquire practical knowledge and skills. Another non-negligible positive influence on the growth of the region’s prosperity will be exercised by a higher number of innovation activities through which the performance and competitive strength of the entities engaged in commercialising the scientific research and development outputs will be increased. Through its focus, the Priority Axis “Development of Entrepreneurial Environment” will contribute to meeting even several NSRR Priorities:

Picture No 22: NSRR priorities and the aim of Priority Axis 4 Development of Entrepreneurial Environment

NSRR Priorities

Competitive Business Sector Development of Sustainable Tourism Support for R&D Capacities and Innovation Education Increase of Employment and Employability Strengthening of Social Cohesion Development of Information Society Smart State administration Environmental Protection and Improvement Availability of Improvement Transport Balanced Regions Development Development of Urban Areas Development of Rural Areas

Priority Axis 4: Development of Entrepreneurial Environment

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6.6.A State-of-the-art

In general, the Northeast Cohesion Region qualifies as an industrial-agricultural region with a big potential for service development. A typical feature of the economic development in recent years is a growing share of foreign investment in the values of major macroeconomic indicators. Presently, the economic drives include the manufacture of transport means, production of electrical and optical devices, metalworking industry, food industry, production of machines and equipment, and the rubber and plastics industries. The traditional textile and clothing industries are receding. The macroeconomic assessment of the region nevertheless hides substantial regional disparities. On the one hand, there are agglomerations of the regional cities with a good infrastructure, qualified labour and ample representation of business entities in the progressive industrial fields and services; on the other hand, there are peripheral rural areas with bad transport connections, an insufficient technical infrastructure, and a worse social and education distribution of population, as well as strongly mediocre entrepreneurial activities, which are all reflected by a high rate of unemployment. The economic restructuring in the 1990’s brought with it the reduction of certain fields (textile, clothing and leather-working industries, partially glass industry), causing several business to go bankrupt. This trend resulted in a number of unutilised and neglected buildings and premises (brownfields), which have lost their original purpose, being now deserted and only decreasing the attractiveness of the cities and municipalities. Although it will take a lot of investment to regenerate and revitalize these properties, this will contribute to restoring the functional use of these properties and to the subsequent development of new activities and increase in employment. Industry still plays the key role in the region. In addition to the well-established large companies, small and medium-sized enterprises (SME’s) have increasingly found their way on the market in recent years, shaping a healthy entrepreneurial environment and providing a stabilizing element to the economic environment. It is SME’s in the first place that mitigate the impacts of structural changes, create conditions for the development and introduction of new technologies, or adapt faster to market demands and fluctuations which are of no or little interest for the larger companies. The use of SME’s full potential in economy depends on the environment which surrounds them. The negative factors include their small economic strength, difficult access to capital, worse access to professional training, lower availability of necessary information and consultation services, dumping prices of imported goods, competition of business chains established by strong capital companies. A problematic area not just of the SME’s is the lack of qualified labour, particularly of the young school and training institution leavers, who lack sufficient experience. Businesses thus lose young perspective labour and the young lose the chance to acquire first work habits and the hope for later high-quality professional jobs. This problem may be resolved by fostering an efficient and effective cooperation between businesses, education institutions, and labour offices with the aim of increasing the school-leavers’ real-life achievement through practical training and acquisition of useful knowledge and skills. The growth of the region’s performance and competitive strength consists in considerably higher commercial use of the scientific, research and development outputs through innovative products, services, processes, etc. The potential the region has in this respect is generally little used, the greater utilization being prevented by a low level of cooperation between the key players among universities, research and development organizations and businesses. One solution is to create innovation strategies that would analyze the present condition, direct future collaboration by fostering current cooperation between the key regional players, and act as one of the sources giving rise to pilot innovation projects which would launch regional innovation in much a wider scope than is the case today. These activities should gradually lead to a growing engagement of other entities in creating conditions for the region’s growing performance and competitive strength in those fields in which it is today considered eligible for seizing the growth opportunities. Justification of the Type of Public Intervention The need for public intervention in this field is important mainly because of the necessity to eliminate, or at least partially suppress, the regional and structural (industrial) disparities on the labour market and to reduce the high rate of unemployment by an indirect support for the development of small and medium-sized enterprises. The support is not territorially restricted and shall be channelled to those areas and those Beneficiaries who can ensure an effective use of the public funds and maximum social benefit for the region.

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6.6.B Global and Specific targets of the Priority Axis

6.6.B.1 Global target of the Priority Axis “Development of Entrepreneurial Environment” To increase the region’s attractiveness for business and investment The target is a prospering region with a high-quality entrepreneurial environment, high-quality entrepreneurial infrastructure for small and medium-sized enterprises, and efficient and effective cooperation between businesses and education institutions for the creation of new job opportunities.

The Priority Axis “Development of Entrepreneurial Environment” is based on Specific targets of the ROP „Northeast“. It focuses on entrepreneurial infrastructure and support for the cooperation between businesses and education institutions as the necessary conditions of development and compatibility of the whole region.

The Priority Axis is developed through 2 Specific targets, reflecting the region’s economic needs. Their scope and focus have resulted from a socioeconomic and a SWOT analysis. In their formulation, account was taken of the results of the 2007-2013 National Development Plan of the CR. The targets are in compliance with the European Parliament and Commission’s Regulation on the European Regional Development Fund (ES) no. 1080/2006 and on cancellation of the regulation (ES) no. 1783/1999..

6.6.B.2 Specific targets of the Priority Axis “Development of Entrepreneurial Environment” • To improve the entrepreneurial infrastructure through the development of entrepreneurial properties • To improve the school-leavers’ real-life achievement and better use the region’s potential in terms of commercialising the research and development outputs

Picture No 23: Target Tree – Priority Axis 4: Development of Entrepreneurial Environment

GLOBAL TARGET OF PRIORITY AXIS 4

To increase the region’s attractiveness for business and investment To increase the region’s prosperity by developing a high-quality entrepreneurial environment, particularly for small and medium-sized enterprises, by fostering closer cooperation between businesses and education institutions, by improving entrepreneurial infrastructure, and by creating new job opportunities.

Specific Target Specific Target To improve the To improve the school-leavers’ entrepreneurial infrastructure real-life achievement and better through the development of use the region’s potential in entrepreneurial properties terms of commercialising the research and development outputs

Area of Intervention 4.1 Area of Intervention 4.2

Support for the Development Support for the Development of of Entrepreneurial Cooperation between Infrastructure Businesses and Secondary Schools, Training Institutions, Other Regional Education 170 Institutions and Labour Offices; Development of Innovation Activities in the Region Regional Operational Programme NUTS II Northeast

6.6.C Strategy

The ROP „Northeast“ scope and focus have resulted from the findings of a socioeconomic and a SWOT analysis carried for the region. The Priority Axis “Development of Entrepreneurial Environment” focuses on eliminating the region’s weaknesses to create a favourable entrepreneurial environment largely co-determining the region’s economic prosperity. Another part of the strategy includes an effort to use the region’s existing opportunities and potential. A great Opportunity for encouraging the region’s economic development is the investment in urban and rural brownfields with a view to their restoration for various entrepreneurial activities. A significant role may also be played by investment in the connection of industrial zones to transport and network infrastructures. The synergies of these Areas of Intervention can be identified in a concurrent growth of entrepreneurial activities in these localities, in growing job opportunities, and in an improving use of urban and rural areas having repercussions on their general appearance. The creation of business incubators in these localities brings about unprecedented activities and business opportunities related to innovation activities and a subsequent rise in productivity and competitive strength of the businesses operating in these buildings, as well as businesses involved in joint projects. A significant impetus for the growth of the innovation activities will be given by regional innovation strategies developed in collaboration with key scientific, research and development entities and businesses operating in the field. In this area of the region, they see a great potential for commercialising the outputs of research and development and a growing prestige of the region. This is an important reason for directing the interest of regional representations in this area. Already today, the region is facing risks related to the lack of qualified labour, particularly in technical fields, which in the near future might be reflected by a slower economic growth caused by the decreasing competitive strength of the production and services with low added value. The region will resolve this problem by strengthening the cooperation between businesses, education institutions and labour offices. The lack of development areas is already today resulting in a decreasing interest of the investors in some areas of the region, which has a subsequent adverse effect causing job opportunities to decline. The interest of investors is further jeopardised as a result of the region’s low expenditure on research and development and limited capacities to commercialise the research and development outputs. The absence of innovation strategies, or their ineffective implementation, will certainly lead to the investors’ dwindling interest in the region. The region’s Strengths consist in a long-term tradition of technical know-how, in a diversified industrial base across the region and in a substantial number of universities and secondary schools capable of supplying qualified labour to the labour market. Some of the universities have already become significant centres of research and development. These major strengths may be used in the fields on which the ROP „Northeast“ public interventions are focused. The Weaknesses consist in a relatively high number of unutilised buildings and areas that have lost their original purpose. These properties will take huge investment to regenerate and revitalise. In terms of usability of the areas designed for entrepreneurial activities, there is a problem with their readiness for “immediate” use, which deeply affects a decreased interest of businesses in entering the region. In particular, this can be seen in the region’s outlying parts, or in the areas with a high rate of unemployment. Another substantial weakness is the absence or a very low level of cooperation between universities and businesses in the area of commercialising the outputs of research and development. This drawback significantly weakens the potential of manufacturing companies and service providers for supplying products and services with high added value to the market. Synergies with Other Operational Programmes Under the Priority Axis “Development of Entrepreneurial Environment”, the ROP „Northeast“ public interventions focus on those fields, in which synergies that consist in using the effects of cooperation between the public and private sectors can be traced. The regional public interventions form part of

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the whole set of operational programmes of the CR, and all despite their different thematic emphases, a multiple positive effect will eventually be achieved. Thematically closest is the Operational Programme “Business and Innovation”, the interventions of which aim at the establishment of businesses, technological development, reduction of energy performance, innovation activities, education, and consultation. Other operational programmes, in which business-related activities can be identified, include “Education and Competitiveness” and “Human Resources and Employment”. Through a synergy of these programmes, the benefits of public interventions can be increased and the offered financial resources of the structural funds effectively used.

Table No 21: Coincidence Matrix of thematic SWOT analysis and Specific targets – Priority 4 Development of Business and Innovation

Coincidence Matrix of the thematic SWOT analysis ng and acquisition of and Specific targets – Priority 4 – Development of Business and Innovation

SPECIFIC TARGETS To improve entrepreneurial infrastructure by developing entrepreneurial properties To increase the school-leavers’ real-life achievement by traini skills practical SWOT STRENGTHS Long-term tradition of technical know-how thanks to a tradition of machine, chemical, glass and electro-technical industries X XX Existence of technically-oriented universities in the region with a research potential for the development of innovative business X XX Sufficient diversification of the industrial base with a significant share of small and medium-sized enterprises and their relatively even distribution across the region XX X Significant representation and a growing number of businesses with foreign investment and of foreign companies X XX WEAKNESSES A large number of industrial and non-industrial brownfields, problematic utilization of old industrial premises and former military barracks XXX X Insufficiently prepared and invested development areas for the support of investment XXX X Disagreement and insufficient interrelation of professional training and labour market – lasting lack of technical experts, particularly in the machine and IT industries X XXX Insufficient interconnection and cooperation of the scientific potential of universities and the industrial companies and businesses of the region X XXX An underdeveloped sector of so-called strategic services (IT, e-business, marketing, human resources development) X XXX Existence of economically weak micro regions, mostly of a rural character, with a low- quality infrastructure and a lack of stabilized business entities and job opportunities XXX X OPPORTUNITIES Creation of an investment support system and preparation of areas and premises for the coming of new investors oriented on production with higher added value XXX X Using transfer of innovations to increase compatibility of all the business entities in the region; establishment and development of business incubators, technology and research parks XXX XX Development of strategic services, progressive fields with high added value, and high- tech industry in cooperation with foreign entities and businesses, including involvement of the regional research base and the research and technical potential of universities XXX XX Entrepreneurial development in the IT and e-business fields, support for new technologies aiming at increasing competitive strength within the business sphere X X Creating and expanding clusters to encourage cooperation among field-related entities with the aim of facilitating expansion onto foreign markets X X

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Using the favourable image of the Northeast Region as a region with qualified and yet relatively cheap human resources to attract adequate investment and activities X XX Using the NUTS II Northeast Region’s geographic position and attractiveness for the entrepreneurial activities of domestic and foreign investors XX X THREATS A lack of qualified labour in the region, generally declining interest in technical fields, insufficient interrelation of the education system with industrial needs; drift of tertiary education graduates into other territories (particularly to Prague) – weakening of the region’s intellectual base X XXX Low level of support for science, research and innovations and for bringing results of the scientific and research activities into practice; an insufficient growth of productivity and hence of wages in the region, having a negative impact on the population’s living standards X XX Lower attractiveness of the region for foreign investors due to an insufficient transport connection and insufficient readiness of the development areas; a lack of funds for the reproduction and development of technical infrastructure XXX X

Growing rate of unemployment, particularly long-term, due to incomplete restructuring of the businesses and their low competitive strength on the European market and to a shifting interest of the foreign and domestic businesses with simple production in looking for cheap labour in other territories XX XXX Insufficient development of small and medium-sized enterprises within the secondary and tertiary sectors; reduced ability of the local market to absorb suitable labour X XX Legend: Relation: X – very weak to weak, XX – medium to strong, XXX – very strong

6.6.D Area of Intervention 4.1: Support for the Development of Entrepreneurial Infrastructure

In accordance with Specific targets of the Priority Axis “Development of Entrepreneurial Infrastructure”, the target of this intervention field is to improve entrepreneurial infrastructure through the development of entrepreneurial properties. Subject to the support is the regeneration and revitalization of the so- called brownfields23 found within the urbanised areas designed, for the development of entrepreneurial activities. The support is defined by the size of the brownfield area and the size of the municipality, where the property is located, and by the type of economic activities to be professed there. All the types of brownfields for future continual entrepreneurial activities or extension of public accessories are a matter of support of the overall development and revitalization except: • Brownfields with future utilization OKEČ 15 – 37 or when strategic services or technological centers (further defined in OP PI) are concerned; or the future utilization would be for agricultural activities • Brownfields up to 5 ha located in municipalities smaller than 2,000 inhabitants and used for agricultural activities in the past • Brpwnfields with future utilization in tourism.

The focus further includes investment in the connection of these properties, as well as the small development industrial zones and localities, to the follow-up transport and technical infrastructure.

6.6.D.1 Specification of the Area of Intervention • Revitalisation of brownfields to develop entrepreneurial activities 26 investment in the transport and technical infrastructure of smaller-scale industrial zones and localities

6.6.D.2 Global and Operational Targets of the Areas of Intervention Global target : • To extend and improve usability of properties designed for entrepreneurial activities Operational Targets:

23Brownfields – uncared and currently unused or little used sites and facilities that have lost their function and use, which are abandoned or unused or little used.

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• To connect the localities destined for business use to the transport and the so-called network infrastructure • To use the neglected and unutilised buildings and areas for entrepreneurial and innovation activities of SME’s

6.6.E Area of Intervention 4.2: Support for the Development of Cooperation between Businesses and Secondary Schools, Training Institutions, Other Regional Education Institutions and Labour Offices; Development of Innovation Activities in the Region

In accordance with Specific targets of the Priority Axis “Development of Entrepreneurial Infrastructure”, the target of this intervention field is human resources development for the needs of the business sector, aiming at better real-life achievement of the school and training institution leavers, chiefly by improving the quality of practical training of students and trainees and of in-service training and further education of employees in cooperation with the regional education institutions and labour offices.

6.6.E.1 Specification of the Area of Intervention • Support for investment to improve material and technical equipment and conditions of schools and training institutions designed for training school-leavers and acquiring practical skills • Support for the preparation and implementation of regional innovation strategies and pilot innovation projects

6.6.E.2 Global and Operational Targets of the Area of Intervention Global target : • To improve cooperation of the regional players in the creation of favourable conditions for a successful achievement of school-leavers on the labour market and to create a friendly environment for the development of innovation activities Operational Targets: • To improve physical conditions for the school-leavers’ education and acquisition of practical skills • To enhance the participation of State administration and other key players in the region’s innovation activities

6.6.F Categorization of the Areas of Intervention

Category Designation 03 Technology transfer and improvement of cooperation networks between small businesses (SMEs), between these and other businesses and universities, post-secondary education establishment of all kinds, regional authorities, research centres and scientific and technological poles (scientific and technological parks, technopoles, etc.) 05 Advanced support services for firms and groups of firms 08 Other investment in firms

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09 Other measures to stimulate research and innovation and entrepreneurship in SMEs 50 Rehabilitation of industrial sites and contaminated land 68 Support for self-employment and business start-up 72 Design, introduction and implementation of reforms in education and training systems in order to develop employability, improving the labour market relevance of initial and vocational education and training, updating skills of training personnel with a view to innovation and knowledge based economy 75 Education infrastructure

6.6.G Form of Support

Non-returnable direct aid (subsidy). In the new program period 2007-2013, the co-financing rate from the EU (SF) funds will only be applied to eligible public spending. The regional map of public spending intensity covering the period 2007-2013 pursuant to EC Rules for National Regional Support No. 2006/C 54/08 for NUTS II Northeast is 40% per each aid Beneficiary. The amount of support from the structural funds (ERDF) may reach as high as 85% of the total eligible public outlay for the projects. In cases in which the project is based upon public support in the sense of No. 87 Par. 1 Founding Treaty of the European Community, Commission Regulation no. 1628/2006 dated 24.10. 2006 concerning the use of Article 87 and 88 of the Contract for Internal Regional Investment Support will be applied. According to the regional intensity map of public support approved for the Czech Republic for the 2007-2013 period, the maximal intensity of support provided does not exceed 40% of eligible outlays for large firms, 50% for midsized firms and 60% for small businesses. In certain cases, it is also possible to apply ES Regulation (ES) no.1998/2006 concerning the use of Article 87 and 88 of the Contract on De Minimis Support, it is also possible to provide de minimis support.

Area of intervention Minimum Total Eligible Expenditure (mil. CZK) 4.1 Support to the development of infrastructure for enterprise 5 4.2 Support to the development of cooperation with secondary 0.5 schools and vocational schools, other regional educational institutions and employment bureaus, development of innovation activities in the region

6.6.H Type of Support

Individual projects.

Structural funds can support the tools of financial engineering ensured by Jessica and Jaspers funds to prepare and finance projects of the cities, municipalities, municipal unions, and the organisations they establish within the framework of the ROP „Northeast“.

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6.6.I Indicators and Their Quantification

Specification and quantification of the indicators to evaluate the Specific targets of Prioritiy Axis/Areas of Intervention are included in Chapter 7 – Indicators for Monitoring and Evaluation.

6.6.J Beneficiaries

• Regions • Municipalities • Organisations established or funded by regions and municipalities • Business entities • Secondary schools

These Beneficiaries will fulfil the individual intervention fields of this Priority Axis. A detailed specification of the Beneficiaries by intervention field is given in the implementing document.

6.6.K Target Groups

• Business entities • Cities and municipalities in the territory of which zones and brownfields are found • Employees of businesses operating in new zones and reconstructed buildings • Training institution leavers (trainees and students) • Business entities requiring practical skills from school-leavers • Education institutions

6.6.L Flexibility (Cross-financing)

Cross-financing may be used for these activities:

o educational and social activities accompanying investment into infrastructure.

In cooperation with: - OP Human Resources and Employment (LZZ) – Area of intervention 3.1 Support to social integration and social services, Area of intervention 3.2 Support to social integration of the members of Romany localities. OP Education for Competitiveness (VK) Priority axis 1 Basic education and Priority axis 3 Further education (for the professional education of social service providers and providers of education) - OP LZZ – Area of intervention 3.1 Support to social integration and social services, Area of intervention 3.2 Support to social integration of the members of Romany localities (for the professional education of providers of social services to persons socially excluded or threatened by social exclusion, a.o. ethnic minorities) - OP LZZ – Area of intervention 3.1 Support to social integration and social services, Area of intervention 3.2 Support to social integration of the members of Romany localities, Area of intervention 3.3 Integration of socially excluded population groups on labour market, and Area of intervention 2.1 Strengthening active policies of employment (for activities targeted onto return onto labour market and in the society, including innovative tools, extension or completion of education for members of target groups, a.o. ethnic minorities)

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- OP LZZ – Area of support 3.1 Support to social integration and social services (for education focused on strengthening of cohesion and development of partnerships at local and regional levels – in towns and rural areas) - OP LZZ – Area of intervention 3.4 Equal opportunities of males and females on labour market and harmonization of working and family life (for development of education provided to employers and employees and to other subjects working in the area of harmonization of working and family life) - Exchange of experience and transfer of good practice between member countries in the solution of social inclusion of specific target population groups (persons socially excluded or threatened by social exclusion, a.o. ethnic minorities) and further professional education (OP LZZ – Area of intervention 5.1 International cooperation)

6.6.M Large Projects

Not considered for the Northeast Cohesion Region.

6.6.N Coordination with Interventions of Other Programmes

The ROP „Northeast“ Priority Axis 4 “Development of Entrepreneurial Environment” bears a relation to the following operational programmes with a nationwide or regional focus: OP Business and Innovation The dividing line between the Operational programme “Business and Innovation” (OP PI) and the ROP „Northeast“ is drawn by a totally different scope of both operational programmes, with the ROP „Northeast“ focusing on the support of development of the transport and technical infrastructure of industrial zones and small-scale localities, and revitalization, the so-called brownfields. As brownfield areas are primarily defined by their future economic use, the OP PI concentrates on projects aiming to create conditions mainly for the processing industry (OKEC 15-37), strategic services and technological centres. The ROP „Northeast“ Priority Axis 4 focuses on regeneration and revitalization of the brownfields and their subsequent use for systematic entrepreneurial activities or civic amenities, excluding: ¾ brownfields with future utilization OKEC 15-37, or strategic services or technological centres (detailed specification in OP PI) or subsequent agricultural utilization, ¾ brownfields with area up to 5 ha which were used for agricultural purposes and located in towns with population up to 2,000 inhabitants ¾ brownfields with future utilization in tourism.

In the field of innovation support, the OPBI focuses on supporting technical and non-technical innovations and enhancing capacities for research and development. The supports partly include the creation of environment for business and innovation, where the programme’s focus is on infrastructure for the creation of business incubators and extended cooperation between the business sphere and education institutions in the research and development field. On the other hand, the ROP „Northeast“ focuses on pilot projects in the innovation field, aiming at mapping and creating an environment for mutual cooperation of the research and development organisations based on regional innovation strategies (information on regional activities and a better approach of State administration to the innovation activities). In the field of education and human resource infrastructure development, the OPBI focuses solely on further education within industry, while the ROP „Northeast“ concentrates on secondary school and training institution graduates without any specific professional focus.

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OP Education for Competitiveness In the area of initial education, the OP Education for Competitiveness (OP VK) focuses on increasing the quality of education, improving the student’s equal opportunities and improving the competencies of teachers and other school staff. In the area of tertiary education, research and development, the programme aims, among other things, at forging bonds between research institutions and the other entities within the private and public spheres. The OPVK preferably concentrates on creating and improving the system and on the “soft” projects aiming at increasing the key competences of school- leavers to increase their chances for real-life achievement on the labour market. The dividing line between the ROP „Northeast“ and OPVK is drawn by a different scope of supported activities. While the ROP „Northeast“ focuses solely on investment projects aiming at the creation of material and technical conditions for ensuring acquiring practical skills and knowledge in schools and training centres, while the OPVK concentrates on the “soft” system projects.

The Environmental OP Rehabilitation of old ecological burdens (SEZ) will be dealt within the framework of the Environmental OP (hereinafter “OP ŽP“). Less significant contamination may be dealt with under OP PI and ROPs on the basis of MŽP opinion.

OP Czech Republic – Republic of Poland 2007 - 2013 The OP focuses on the development of entrepreneurial environment in the area of cooperation among businesses, particularly the SME’s, from partner countries. Activities concentrating on the cooperation between institutions supporting SME’s, on the provision of expert, consultation and advisory services, and on ensuring better access to information networks will be supported hereunder. The programme further supports the organization of seminars and trainings developing cooperation between entities operating in the border area. The ROP „Northeast“ does not support any activities as such, focusing on investment projects. The operational programmes have a different thematic and territorial scope. OP Free State of Saxony – Czech Republic 2007 - 2013 The OP focuses on economic development and on fostering economic and scientific cooperation. Its main goal is to create a unified investment and economic space. Subject to the supports is the development of cooperation networks, transfer of technologies and marketing strategies, and creation of investment incentives. The ROP „Northeast“ has a different thematic scope (investment projects only). The joint action of both programmes may lead to synergies in the field of entrepreneurial support on the basis of international cooperation. EAFRD – Rural Development Programme From the EAFRD through the Rural Development Program (PRV), it is the diversification of agricultural activities, consisting in redevelopment of buildings and areas in municipalities with a population less than 2,000 and with an area less than 5 ha, as well as their use for activities resuming the agricultural production (for the purpose of using renewable energy sources), that will get the chief support. Another field is the support for the establishment of new and the development of existing non- agricultural businesses, aiming at diversified economic activities in the country (development of crafts, tourism, etc.). Much like the ROP „Northeast“, the PRV focuses on regeneration and revitalisation of brownfields. The difference between both programmes largely consists in a different delimitation of area of these properties and size of the municipalities where these properties are found. The ROP „Northeast“ Priority Axis and the aforementioned operational programmes complement and condition each other, and as specific supported projects are implemented, they will create sufficient synergic effects to intensify the results and impacts of these programmes. At the same time, they will contribute to meeting the targets and priorities of the superior program document (NSRR). Synergy in the area of brownfields will be achieved in particular thanks to mutual consultations of the Managing Authorities of OP PI and OP ŽP before announcement of invitations for presenting project proposals concerning brownfields, and thanks to mutual communication on projects selected.

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6.6.O Financial Plan

Tables with financial plans are contained in Chapter 9 – ROP „Northeast“ Funding.

6.7 Priority Axis 5: Technical Assistance

6.7.A State-of-the-art

In accordance with the legislative framework for structural funds, the Priority Axis “Technical Assistance” focuses on the support and implementation of the ROP „Northeast“. It provides a cross- sectional axis, touching upon all Priority Axes and Areas of Intervention of the ROP „Northeast“. Under the Priority Axis “Technical Assistance”, activities for the support of management, implementation, control, monitoring, evaluation, promotion of the Regional Operational Programme, and increase of the region’s absorption capacity shall be funded in particular.

6.7.B Global and Specific targets of the Priority Axis

6.7.B.1 Global target of the Priority Axis “Technical Assistance”

To ensure activities related to implementation and management of the Regional Operational Programme and strengthen the absorption capacity of the NUTS II Northeast Region.

The priority Axis is developed through 2 Specific targets the focus of which covers activities that can be implemented under this Priority Axis.

6.7.B.2 Specific targets of the Priority Axis “Technical Assistance”

• To ensure optimum administration capacity for the purpose of an effective and trouble- free implementation of the programme • To ensure sufficient absorption capacity in the region

Specific target – To ensure optimum administration capacity for the purpose of an effective and trouble-free implementation of the programme This target focuses on ensuring funding to cover the costs necessary for an effective and trouble-free management, monitoring, control, audit, analysis, promotion and information provision at all levels of the ROP „Northeast“. The target is also aimed at supporting activities designed to reinforce the administrative capacity of the implementing bodies in the area of materials and technology, as well as in human resources and preparation for the next program period. Within the framework of the ROP „Northeast“, the Specific target 1 is developed through the Area of Intervention 5.1 “Support for Activities Related to the ROP „Northeast“ Implementation and Management”.

Specific target – To ensure sufficient absorption capacity in the region This target focuses on covering the costs related to the support for the creation, preparation and implementation of projects to be applied under the ROP „Northeast“ Priority Axes. Within the framework of the ROP „Northeast“, the Specific target 2 is developed through the Area of Intervention 5.2 “Support for Absorption Capacity of the Northeast Cohesion Region”.

Picture No 24: Target Tree – Priority Axis 5: Technical Assistance

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GLOBAL TARGET OF PRIORITY AXIS 5

To ensure activities related to the implementation and management of the Regional Operational Programme and strengthen the absorption capacity of the NUTS II Northeast Region

Specific Target Specific Target To ensure optimum To ensure sufficient administration capacity for the absorption capacity in purpose of an effective and the region trouble-free implementation of the program

Area of Intervention 5.1 Area of Intervention 5.2 Support for Activities Related to the ROP „Northeast“ Support for Absorption Implementation and Capacity of the Management cohesion region

6.7.C Area of Intervention 5.1: Support for Activities Related to the ROP „Northeast“ Implementation and Management

This Area of Intervention develops a specific target “To ensure an effective and trouble-free implementation of the ROP „Northeast“” with an emphasis on ensuring such conditions for the programme’s implementation as would guarantee its effective management. The Area of Intervention focuses on activities related to the preparation, selection and evaluation of advertising of aid and operations.

6.7.C.1 Specification of the Area of Intervention • Programme management and implementation • Programme monitoring and evaluation • Control and control systems • Information and publicity

6.7.C.2 Global target and Operational Targets of the Area of Intervention Global target: • Effective and efficient programme administration, the aim of which shall be a successful programme implementation Operational Targets: • Purchase of equipment needed for managing and implementing of the Operational Programme • Creation of documents needed for managing the Operational Programme

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• Evaluation of the best practices and international exchange of experience related to the management and implementation of the Operational Programme • Preparation and development of human resources for implementing of the Operational Programme • Ensuring administration for the Operational Programme • Ensuring publicity for the Programme • Elaboration of studies and surveys needed for managing, monitoring, and evaluating of the Regional Operational Programme • Preparation for future program period

6.7.D Area of Intervention 5.2: Support for Absorption Capacity of the Northeast Cohesion Region

This Area of Intervention develops the Specific target “To ensure adequate absorption capacity in the region” (see Target Tree). The main target of the Area of Intervention is to increase the Beneficiaries’ ability to prepare and subsequently implement and account successfully the projects co-financed from the ERDF through the ROP „Northeast“. A particular tool will be the provision of assistance to potential project presenters and actual presenters, and at the same time to aid beneficiaries, particularly in the form of the provision of expert information, consulting and educational activities implemented via a pilot project. Aid will be targeted at expert assistance in the phase of project goal identification, through the preparation of project requests and up to the realization of the project and presentation of monitoring reports and requests for payment (including preparation of payment requests). One of the means for this aid will be organizing factually related educational and consultation programs reflect the experience gained in the realization of pilot projects aimed at transferring know-how to other applicatns and recipients in ROP „Northeast“. Another tool will be undertaking an analysis of absorption capacity connected to ROP „Northeast“.

6.7.D.1 Specification of the Area of Intervention • Support for creation, preparation and realization of projects in ROP „Northeast“ • Provision of information, advisory and consultation services as part of assistance for pilot projects • Analyses of absorption capacity in the Northeast cohesion region

6.7.D.2 Global and Operational Targets of the Area of Intervention Global target : • High absorption capacity of the region enabling the targets and planned impacts of the programme to be met

Operational Targets: • Support for initiating and preparing regional projects for the successful drawdown of European funds through the realization of pilot projects • Support for implementing, managing and successful charging of projects in connection with the realization of pilot projects • Human resources development related to project preparation, implementation and successful accounting in connection with the realization of pilot projects • Preparation of the future program period in connection with the realization of pilot projects • Preparing an analysis of absorption capactiy

6.7.E Categorization of the Areas of Intervention

Category Designation

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85 Preparation, Implementation, Monitoring, and Inspection 86 Evaluation and Studies, Information and Communication

6.7.F Form of Support

Non-returnable direct aid (subsidy). The extent of co-financing using EU(SF) funds in the new programming period 2007 - 2013 will relate only to eligible public expenditures. The amount of support from structural funds (ERDF) may reach up to 85 % out of total eligible public outlays for the projects.

6.7.G Type of Support

Individual projects.

6.7.H Indicators and Their Quantification

Specification and quantification of the indicators to evaluate the Specific targets of Prioritiy Axis/Areas of Intervention are included in Chapter 7 – Indicators for Monitoring and Evaluation.

6.7.I Beneficiaries

• Regional Council of the Cohesion Region • Regions and the organisations they have established or founded

These Beneficiaries will fulfil the individual intervention fields of this Priority Axis. A detailed specification of the Beneficiaries by intervention field is given in the implementing document.

6.7.J Coordination with Interventions of Other Programmes

The Priority Axis “ROP „Northeast“ Technical Assistance is designed solely for the needs of this operational programme, however it shows a complementary tie to the Technical Assistance Operational Programme. Technical Assistance OP will ensure preparation of methodology for the creation of manuals for implementing SF, for the development of financial management, further support of the activities of the Payment and Certification Body (PCO) and Auditing Body (AO) and external education for employees participating in ERDF implementation on the central and regional levels of ERDF implementation, exceeding the framework of individual OPs including regional OPs. OP TP will at the same time cover the needs of coordination and support for strategic and methodological management of the development of absorption capacity and support absorption capacity with cross-sectional intervention. The ROP „Northeast“ in this connection focuses on the support of absorption capacity in specific areas which fall thematically under it.

6.7.K Financial Plan

Tables with financial plans are contained in Chapter 9 – ROP „Northeast“ Funding.

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7 Indicators for Monitoring and Evaluation

Features and Characteristics of Indicator System The ROP „Northeast“ indicator system was created for the purpose of effectively managing the distribution of financial resources drawn from the EU structural funds. The aim of the whole interrelated system of indicators is to enable measurement of outputs, results and impacts of the ROP „Northeast“ and the individual projects. Its main users will include the programme managers and monitoring and evaluation staff as well as Monitoring Committee members, NSSR national coordinator and European Commission. The indicator system setting is based on article 37 of the General Regulation and on the needs of programming, monitoring and evaluating the ROP. The aim of the indicator system is to measure how general targets are met, using indicators to monitor the ROP „Northeast“ implementations and evaluate its performance in respect of the targets set. It also serves as a decision-making tool and a tool for flexible monitoring of deviations from the set targets. The ROP „Northeast“ indicator system is based upon indicators from the National Indicator Code List for the programming period 2007-2013, common to all operational programmes of the ČR. ROP „Northeast“ indicators have been selected from the list of National Indicators on the basis of the principle of pertinence to ROP „Northeast“ goals, transparency and especially linkage to the priorities of the Community (so-called "core" indicators), transparency with regard to the NSRR (especially context indicators) and at the same time ties to the Lisbon strategy. The collection of indicators also contains indicators aimed at monitoring aspects of the horizontal themes within the ROP „Northeast“ framework. In agreement with the methodology of the European Commission, the following types of indicators were included in the ROP „Northeast“ indicator set on the basis of the framework for the system of measuring and quantifying program goals.

context indicators, expressing, through a presentation of tendency in the main macroeconomic indicators and through comparisons of the region’s and its districts’ position with the EU averages, a social-economic framework within which the ROP „Northeast“ programme targets are implemented; these indicators are linked to NSRR. They follow goals of national policies and the cohesion policy. Indicator values serve as quantifying starting points for ex-ante, concurrent and ex-post analyses. programme indicators, bearing a direct relation to the provision of aid and to the side effects. They include: source indicators, financial indicators, indicators of output, result and impact. For purposes of the ROP „Northeast“, the following indicators were included into the set - output indicators, providing information on the outputs of each event/project within the ROP „Northeast“ framework (forming part of a continuous monitoring process); - result indicators, measuring the results of public interventions. They constitute an important basis for the ROP „Northeast“ management during the whole period of its implementation; - impact indicators, measuring how decisive targets of the Operational Programme are met; these indicators were selected for the ROP „Northeast“ only for programme level for the purpose of providing information on fulfilling global goals of the program and making strategic decisions. For the purpose of evaluating the ROP „Northeast“’s success by the European Commission, core indicators have been integrated in the indicator system. These indicators express Community priorities, have an obligatory character and shall be monitored through annual monitoring reports and aggregated up to the NSRR level. The core indicators play a key role for the control performed by the European Commission bodies and are considered the top of the indicator structure. In the context of fulfilling the horizontal theme Sustainable Development, aside from indicators, environmental criteria are observed (see Chapter 5.12). The goal of these criteria is an evaluation of the contribution the program's realization makes to the natural environment of the region.

Basic levels of use of the ROP „Northeast“ indicator set

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description of the socio-economic environment, monitoring, evaluation.

The proposed monitoring and evaluation indicators reflect to the maximum extent the possibilities yielded by current information sources that are available to the Czech Statistical Office, departmental statistics or EUROSTAT, as appropriate. Data on programme implementation outputs will be obtained from implementation information systems by the monitoring and evaluation staff. The whole indicator system makes it possible to measure the contribution of structural funds to the implementation of Lisbon Strategy in the Northeast Cohesion Region.

The initial value given in indicator tables provides the initial values from 2004, the target values being those expected in 2013/2015.

Within the framework of the management of the program partial indicators are also used which serve to analyze in greater detail development in the individual support areas of the program and horizontal themes. These partial indicators are organized and evaluated in a very flexible manner according to the needs of the program, the needs of the Managing Authority or other entity and according to evaluation studies. The choice of such indicators reflects various specifics of the regions, development of the program and also conclusions of evaluation studies whose compatibility and use is outlined in the Operation Manual of the program.

The quality of the ROP „Northeast“ indicator system rests on an unambiguous understanding of the intervention logic. A significant achievement of the indicator definition includes proportionality, i.e. a proportionate and balanced coverage across the Priority Axes, fields of intervention, and projects. An example would be the impact indicators that should only cover the fields requiring large volumes of intervention. All the required features of the indicators used, i.e. relevance, sensitivity, availability, feasibility, and cost of measurement/acquisition, etc., have been appreciated by the indicator definition.

Analysis of indicators The Managing Authority of the program is responsible for analysis of the indicators: the Regional Council of the Northeast cohesion region or staff of the Department of Methodological Management of the program and monitoring. Indicators are monitored with varying intensity depending upon the publication of statistics by individual relevant information providers (sources). Measurement of output indicators takes place every 6 to 12 months in dependence upon data sources and operations within the ROP „Northeast“ framework. The first evaluation of these indicators is derived from the temporal course of the realization of the first projects of the program and monitoring reports on these projects. Measurement of indicators of results will take place once a year. The first measurement of results will be carried out as soon as possible after the completion of the first projects, likely two years after the initiation of activities by the ROP „Northeast“. Project presenters serve as basic sources of data and fulfilment of indicators. Already at the time of application the applicant obligates himself to fulfil indicators which are relevant to his project and in case of realization of the project provides information within the framework of monitoring reports. At the level of the Managing Authority, this data is assembled in the IS Monit 7+ information system and is evaluated together with data from statistical sources, serves as a basis for monitoring reports at the program level, annual reports and concluding reports, management of the program, evaluation studies, etc., and are provided to the relevant entities: the monitoring committee of the program, NOK and European Commission. A more detailed description of monitoring indicators and their use may be found in the Operating Manual ROP „Northeast“.

Set of monitoring indicators for ROP „Northeast“:

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7.1 Context Indicators

The general implementation and evaluation of the ROP „Northeast“ shall be done within the context of the following characteristics of the social and economic situation in the region:

Table No 22: Context Indicators

Indicator Type Indicator Unit of Measure Source 2005 value Contex Total population number ČSÚ 1, 483, 423

Contex Age index % ČSÚ 0,89

Regional GDP per capita in Contex PPS ČSÚ 13, 602 PPS

Regional GDP per capita in Contex % ČSÚ 84,9 PPS, CZ = 100

Net disposable retirement Contex income per capita, CZ = % ČSÚ 94,8 100

% (date according to General unemployment Contex Labour Force Sample ČSÚ 5,6 rate Survey)

Contex Length of secondary roads km ČSÚ 2 301

Contex Length of tertiary roads km ČSÚ 6 265

Contex Collective accommodation ks ČSÚ 103, 717 facilities for tourism – beds Number of guests staying Contex thous. people ČSÚ 7, 700 overnight

Contex Share of urban population % ČSÚ 69

7.2 Program indicators

Talbe No 23: Program indicators Quantification National indicator Unit of Indicator Source Estimated value code measure Value 2005 in the year 2015 Output indicators

51 01 00 Number of supported projects total number region 0 982 NSRR, CORE Relevant to priority axis : 1, 2, 3, 4, 5 Number of supported projects for 51 11 00 transport development (serviceability) number region 0 93 NSRR, CORE Relevant to priority axis : 1 Number of supported projects for rural 51 21 00 development (municipalities) total number region 0 240 NSRR, CORE Relevant to priority axis : 2 51 15 00 number region 0 245 NSRR, CORE Number of supported projects aimed at

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sustainable development and increased attractiveness of urban areas and large cities - total Relevant to priority axis : 2 Number of supported projects for tourism 51 12 00 development number region 0 298 NSRR, CORE Relevant to priority axis : 3 Number of supported projects for 51 31 00 development of the commercial number region 0 46 NSRR, CORE environment Relevant to priority axis : 4 Number of supported projects for 51 41 00 technical assistance number region 0 60 NSRR, CORE Relevant to priority axis : 5

61 01 00 Total length of new and reconstructed highways of Class II and III km region 0 150 NSRR, CORE Relevant to priority axis: 1 Length of newly constructed bicycle paths 61 01 10 total km region 0 40 Relevant to priority axis : 1, 3 22 01 00 Projects focused on waste management number region 0 50

Relevant to priority axis : 2, 4 Number of projects focused on 37 33 00 environmentally friendly forms of transport number Region 0 20 Relevant to priority axis: 1 Area of regenerated and revitalized 65 01 00 landscape in total ha Region 0 70 NSRR, CORE Relevant to priority axis : 2, 4 Area of revitalized unexploited or 65 20 00 neglected areals (brownfields) in total ha Region 0 55 Relevant to priority axis : 2, 4 Number of partners involved 07 42 70 number Region 0 400 Relevant to priority axis : 1.2,3, 4, 5

Result indicators

Number of newly built or reconstructed 63 01 00 beds number of beds region 0 450 Relevant to priority axis : 3 Visitors to the region - number of nights 63 05 02 spent thous. people ČSÚ 7 700 7 855 Relevant to priority axis : 3 Number of newly created employment 52 01 01 positions for men number region 0 89 NSRR, CORE Relevant to priority axis : 1,2,3,4 Number of newly created employment 52 01 02 positions for women number region 0 89 NSRR, CORE Relevant to priority axis : 1,2,3,4 Impact indicators

Total realized expenditures for projects in 51 61 11 thous. CZK thous. CZK region 0 21 624 484 Relevant to priority axis : 1, 2, 3, 4, 5 52 08 00 General extent of unemployment in NUTS % ČSÚ 5,6 5,5 NSRR, CORE II region total

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Relevant to priority axis : 1, 3, 4

Exposure of population to PM10 in excess 65 31 02 of limits % ČMHÚ 1,65 1,16 Relevant to priority axis : 1

21 23 00 Lowering emissions of primary particles kt/year ČMHÚ 95,9 84,4 and precursor secondary particles

21 11 00 Quantified emissions from stationary thous. t/km2 ČMHÚ 27,6 26 sources – SO2

21 12 00 Quantified emissions from stationary thous. t/km2 ČMHÚ 28,7 27,2 sources - NOx

21 13 00 Quantified emissions from stationary thous. t/km2 ČMHÚ 51,5 50,3 sources - CO

7.3 Priority axis indicators

Table No 24: Indicators for priority axis 1: Development of transport infrastructure evaluation

Quantification National indicator Unit of Indicator Source Estimated value code measure Value 2005 in the year 2015 Output Indicators

Number of supported projects for 51 11 00 Transport development (serviceability) number region 0 93 NSRR, CORE Relevance to support areas: 1.1, 1.2,1.3

61 01 01 Length of new Class II and II highways km region 0 30 NSRR, CORE Relevance to support areas: 1.1 Length of reconstructed Class II and III 61 01 02 highways km region 0 120 NSRR, CORE Relevance to support areas: 1.1 Length of newly constructed cycle 61 01 10 paths total km region 0 20 Relevance to support areas: 1.2 Increase in the total number of persons 61 02 05 transported by public transport persons region 0 30 000 Relevance to support areas: 1.2 Number of newly obtained ecological 61 02 41 vehicles in public transportation number region 0 29 Relevance to support areas: 1.2 Result Indicators

Share of newly reconstructed and new highways in the total regional highway 61 01 08 % region 0 2 network Relevance to support areas: 1.1 Number of newly created employment 52 02 11 positions within the transportation number region 0 23 NSRR, CORE serviceability project framework Relevance to support areas: 1.2,1.3

61 03 11 Number of dispatched passengers at % region 0 20 regional airports– change of number

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over time in % Relevance to support areas: 1.3

Table No 25: Indicators for priority 2 axis: Development of urban and rural areas evaluation

Quantification National Indicator Unit of Indicator Source Estimated value Code measure Value 2005 in the year 2015 Output Indicators

Number of supported projects aimed at sustainable development and 51 15 00 increased attractiveness of urban areas number region 0 245 CORE and large cities total Relevance to support areas: 2.1, 2.2 Number of supported projects for 51 15 10 development (increased attractiveness) number region 0 50 NSRR, CORE of regional cities total Relevance to support areas: 2.1 Number of projects increasing 51 15 41 attractiveness – other cities number region 0 195 CORE Relevance to support areas: 2.2 Number of supported projects 51 21 00 increasing the attractiveness of rural number region 0 240 NSRR, CORE areas (municipalities) total Relevance to support areas: 2.3 Result Indicators

Regenerated and revitalized surface 65 01 00 area total ha region 0 35 NSRR, CORE Relevance to support areas: 2.1, 2.2,2.3 Regenerated and revitalized buildings 65 11 00 2 in cities total m region 0 85 000 CORE Relevance to support areas: 2.1, 2.2 Surface area of regenerated or revitalized buildings in rural areas 2 65 15 00 m region 0 28 000 (municipalities) total Relevance to support areas: 2.3 Surface area of revitalized unused or 65 20 00 neglected grounds (brownfields) total ha region 0 20 Relevance to support areas: 2.1,2.2 2.3 Count of newly created work positions as part of projects for sustainable urban 52 02 13 count region 0 5 development Relevant to support areas: 2.1,2.2 Count of newly created work positions as part of projects for sustainable rural 52 02 15 count region 0 5 areas Relevant to support area: 2.3 Surface area of regenerated or 65 11 03 revitalized buildings for social services 2 m region 0 20 000 CORE and healthcare Relevance to support areas: 2.1,2.2 2.3

65 11 01 Surface area of regenerated or 2 m region 0 20 000 CORE revitalized buildings designated for education development

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Relevance to support areas: 2.1,2.2 2.3

Table No 26: Indicators for priority axis 3: Tourism evaluation

Quantification National Indicator Unit of Indicator Source Estimated value Code measure Value 2005 in the year 2015 Output Indicators

Number of supported projects on 51 12 00 tourism development number region 0 298 NSRR, CORE Relevance to support areas: 3.1, 3.2 Length of newly constructed cycle 61 01 10 paths total km region 0 20 Relevance to support areas: 3.1 Result Indicators

Number of newly created employment 52 02 12 positions within the framework of number region 0 75 projects on tourism development NSRR, CORE Relevance to support areas: 3.1, 3.2 Visitors to the region - number of nights 63 05 02 spent thous. people ČSÚ 7 700 7 855 Relevance to support areas: 3.1, 3.2 Number of newly built or reconstructed 63 01 00 beds number region 0 450 Relevance to support areas: 3.1 Number of reconstructed historical 63 22 00 sites/buildings number region 0 10 Relevance to support areas: 3.1

Table No 27: Indicators for priority axis 4: Development of commercial environment

Quantification National Indicator Unit of Indicator Source Estimated value Code measure Value 2005 in the year 2015 Output Indicators

Number of supported projects on 51 31 00 commercial environment development number region 0 46 NSRR, CORE Relevance to support areas: 4.1 Total realized expenditures on creating industrial zones and revitalization of 51 61 21 thous.CZK region 0 728 000 brownfields Relevance to support areas: 4.1 Result Indicators

Number of newly created employment positions within the framework of 52 02 21 projects on development of commercial number region 0 70 NSRR, CORE environment total Relevance to support areas: 4.1 Surface area of revitalized unused or 65 20 00 abandoned grounds (brownfields) total ha region 0 35 Relevance to support areas: 4.1

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Table No 29: Indicators for priority axis 5: Technical assistance evaluation

Quantification National Indicator Unit of Indicator Source Estimated value Code measure Value 2005 in the year 2015 Output Indicators

Number of supported projects 51 41 00 Technical assistance number region 0 60 NSRR, CORE Relevance to support areas: 5.1, 5.2 Number of meetings of managing and 71 01 00 advisory authorities number region 0 50 Relevance to support areas: 5.1 Realization of evaluation studies and 71 05 00 reports total number region 0 20 Relevance to support areas: 5.1 Number of realized training sessions, 71 11 01 seminars, workshops and conferences number region 0 100 Relevance to support areas: 5.1, 5.2

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8 Implementation Part

The Northeast Regional Operational Programme’s implementation structure is in compliance with Act No. 248/2000 Coll., on the Support of Regional Development, as amended by Act No. 138/2006 (hereinafter “Act”). The Managing Authority of the Regional Operational Programme is the Regional Council.

The description of the individual entities is based on the Council Regulation (ES). The Managing Authority does not establish any intermediary entities. The aim is to create a simple and clear implementation structure to be available, to the maximum extent possible, to all Beneficiaries. To this end, local offices of the Managing Authority shall be established in each region.

8.1 Programme Implementation

The Managing Authority – Regional Council of the Northeast Cohesion Region (hereinafter “RC”) – shall be generally responsible for implementing the ROP „Northeast“. The Regional Council bodies are established under the Act: the Regional Council Committee (hereinafter “Committee”), the Regional Council Chairman and the Regional council Authority (hereinafter “Office”).

For the purpose of approving criteria for the selection of projects and programme-level monitoring, the ROP „Northeast“ Monitoring Committee shall be established. The Monitoring Committee will rest on the principle of partnership in the presence of economic and social partners. The function of the Certification Body (hereinafter “CO”) shall be performed by the Payment and Certification Body – NF MF and the function of the Audit Body shall be performed by CHJ MF. The Managing Authority ensures that any State aid granted under the ROP “Northeast” will comply with the procedural and material State aid rules applicable at the point of time when the public support is granted.

Distribution of Powers within ROP „Northeast“

As the ROP „Northeast“’s Managing Authority, the RR is responsible for managing and implementing the Operational Programme. In accordance with the principle of proper financial management, the RC shall in particular bear responsibility for ensuring transparent selection of projects, project monitoring, co-financing from the public funds, managing activities of the Monitoring Committee, providing information and reports, ensuring the Programme’s publicity, etc. The distribution of powers between the individual RC bodies is stipulated by the Act. For reinforcing the absorption structure and administrative capacity of the ŘO, adequate means have been allocated from Priority Axis 5, Technical Assistance.

Regional Council Committee

The Committee is established under the Act. The Committee members are elected from among the Members of the Regional Assemblies making up the Northeast Cohesion Region – i.e. the Pardubice, Liberec and Hradec-Králové-Regions.

Under the Act, the Committee:

A. approves the implementation and management documentation of the Regional Operational Programme Northeast; B. approves measures concerning publicity and awareness about the Regional Operational Programme Northeast; C. approves selections of the projects to which the Regional Council shall grant a subsidy or returnable financial assistance; D. approves the budget and balance account;

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E. elects the Chairman and Vice-chairmen of the RC; F. appoints and removes the Office Director on the RC Chairman’s proposal; G. defines the RC organisational structure and number of employees; H. approves other matters, as long as the Committee’s Code of Procedure so provides.

The Committee is responsible for managing and implementing the ROP „Northeast“, being further accountable for: a) preparing, discussing and submitting the OP to the European Commission; b) introducing a system to gather reliable financial and statistic information on the implementation of the OP, introducing monitoring and evaluation indicators, and transferring these data in the agreed electronic format to the Monitoring Committee, to the Payment and Certification Body (MF) and to the European Commission (EC); c) ensuring elaboration of annual and final reports on the OP implementation and (following the approval of the Monitoring Committee) on the submission to the EC (a copy of final report on the OP implementation will be granted to AO; d) the establishment and activities of the Programme’s Monitoring Committee; e) ensuring that the Payment and Certification Body receives all the necessary information on the procedures and audits carried out in respect of expenses for the purpose of issuing a Cost Justification Certificate; f) ensuring that the Auditing Body receives the required documents and data for analytical and reporting activities; g) securing the ROP „Northeast“’s evaluation; h) ensuring that entities involved in the OP management and implementation, including support Beneficiaries and other entities involved in the implementation, keep an independent accounting system or use an appropriate account reference codes for all the aid-related transactions; i) securing procedures to investigate irregularities and send monthly reports on detection irregularities and to inform quartrely PCO, representative of the AFCOS net and AO about irregularities developed within programs´ implementation (including method of resolution of already identified irregularities); j) ensuring measures for correction in case defects occur; k) ensuring compliance with national policies and Community policies, particularly with respect to awarding public contracts, public aid rules, environmental protection, and equal opportunities; l) ensuring sources of national co-financing; m) providing information enabling the EC to evaluate large projects; n) fulfilling duties concerning information on, and promotion of, the OP; o) selecting projects to which the Regional Council will grant a subsidy or returnable financial assistance.

Regional council Authority (hereinafter “Office”)

The Office is the RC’s executive body, taking care of all tasks related to the function of the ROP „Northeast“’s Managing Authority, excluding matters delegated or reserved to the Committee and the RC Chairman. The Office also fulfils tasks connected with the professional, organisational and technical support of the RC activities.

In particular, the Office ensures the following tasks: a) accepting support requests and organising calls for projects; b) providing information on the Programme; c) considering formal requirements and acceptability of the submitted projects; d) ensuring project quality evaluations; e) drafting contracts on project funding; f) monitoring compliance with the rules for awarding public contracts when successful projects are implemented; g) checking work flow in each project; h) ensuring functioning of the monitoring system, i.e. of the electronic data records for monitoring and evaluating the Programme implementation; i) processing cost data as a basis for certification; j) collecting data for the ROP „Northeast“’s annual and final reports;

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k) carrying out and ensuring performance of financial inspections for project implementations, aiming at verifying whether the co-financed products and services have been delivered and the required cost expended in compliance with the terms of the contract on project funding and theČRand EU legislation; l) reviewing submitted requests for the reimbursement of expended costs to any support Beneficiary (verifying compliance with the defined performance targets and financial plan of the project, as well as compliance with theČRand EU policies and legislation, considering the cost eligibility, etc.); m) ensuring publicity; n) preparing the RC budget and balance account; o) making the definition of the managing and controlling systems and submitting this definition to Auditing Body in such a term, so that it was possible to send it to EC within 12 months after the approval of the programme; p) submitting the application for editing of the closure declaration to Auditing Body . The implementation, payment and audit functions of the Office are strictly separated.

Local offices of the Office

An important role within the implementation structure is played by local offices of the Office in each region of the NUTS II Northeast Region. They secure an effective and user-friendly implementation of the Programme.

Local offices are supported by the Office staff.

The local offices serve to provide information, accept requests and ensure they are evaluated, draft contracts with the Beneficiaries and to check the projects.

Regional Council Chairman Acting as a statutory body of the Regional Council and representing it in public; he reports his activities to the Committee. In his absence, the Chairman is deputised by a Vice-chairman. If several Vice- chairmen are elected, they deputise for the Chairman in the order defined by the Committee.

Administrative capacity

The necessity of valid administrative structures to guarantee efficient use of the Structural Funds resources has been acknowledged and stipulated in the text of the National Strategic Reference Framework of the Czech Republic.

Sufficient administrative capacity is necessary in order to ensure not only the absorption capacity and application of formal procedures but also to spend financial resources in line with sound financial management principles. According to the NSRF, the basis of this approach to guarantee sufficient administrative capacity is the following: Analysis of the MA's needs for operational programmes implementation Definition of functions and procedures Formulation of employees' profiles, jobs description Quality of the selection and recruitment of new employees.

Further, in line with the NSRF: "the quality output of all functions within the implementation system of EU resources is closely related to the profile and stabilization of employees, who participate on preparation and functioning of this system. Employees of public administration have to be systematically prepared several years for correct and quality execution of these activities, including learning of languages. Quality of the selection and recruitment of new employees that takes into account the best practice is an essential condition for quality human resources management. This system will be used at all implementation levels. The main objective of the improvement of the human resources management is to minimize the undesirable outflow of these well-educated and skilled employees into the private sector. This can be achieved primarily through the setting of such conditions that create the work in public administration competitive to the private sector".

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These NSRF provisions are more specified in the letter sent by Czech authorities in view of approval of the NSRF decision to the European Commission on 29 June 2007 (reference number 24 449/2007- 62) in the following way:

"Attention will be paid to systemic strengthening of the absorption capacity, including also the analysis of needs, definition of requirements, description of work posts, independent recruitment procedures, motivation system, training of the staff and the stabilisation of the staff. A document called "Procedures to solve the administrative capacity to use the Structural Funds and Cohesion Fund resources during 2007-2013" was submitted to the Czech government".

Governmental resolution No 818 of 18 July 2007 approving the above mentioned document is to be applied to the whole public administration and its implementation will be monitored by the Prime minister of the Czech Republic.

Subsequently, the above mentioned commitments have to be implemented at the level of each operational programme. A more detailed report should specify how these commitments are to be addressed (e.g. analysis of the MA's needs, definition of functions and procedures, formulation of employees' profile, jobs description, quality of the selection and recruitment of new employees). Further, it should describe the way in which the Operational Programme Technical Assistance and the priority axis of the technical assistance of the Regional Operational Programme will be used for this objective. Other very important issue is the support of absorption capacity of the beneficiaries and helpful approach of relevant authorities to the beneficiaries.

This implementing report has to be finalised and presented during the first monitoring committee after the adoption of the Regional Operational Programme.

8.2 Project Selection System. Beneficiary Duties

Project Selection System

The claimant submits a project proposal to a Local Office of the Regional Council, according to the place of project implementation. A Local Office of the Office will consider formal completeness and acceptability of the project and ensure its quality evaluation according to defined selection criteria. The approval of projects to which financial aid is to be granted from the ROP „Northeast“ funds falls within the competence of the Committee. The Office shall notify the Beneficiary of the results of the Committee’s meeting and of its decision.

General Criteria for the ROP „Northeast“ Project Selection The project evaluation criteria will include both criteria common to all the areas of intervention and specific criteria for project evaluation under each Area of ROP SV Intervention.

All projects are evaluated on the basis of selection criteria, which consist of: 1) acceptability criteria 2) formal appropriateness criteria 3) point criteria The following will be used in point assignment/evaluation of projects: • the project as a whole • capabilities of the applicant, horizontal themes, fulfillment of indicators (criterion weight 20%) • technical quality of project (criterion weight 40%),

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• need for and relevance of project (criterion weight 40%).

The resulting evaluation is the sum of the weighted point count from individual areas under point evaluation.

Detailed point tables for every specific support area are contained in the attached Guide for Applicants and Recipients.

For the approval of projects, the following general criteria shall be binding: • Compliance with NSRR priorities • Regional impact and significance of the project • Economic and social benefits, especially the impact on regional development • Evaluation in terms of horizontal themes • Project sustainability

Projects are awarded points with regard to their quality. In no event is the particular region in which implementation will take place taken into account in awarding points. This means that the best projects will be chosen in a given area of support without regard to the region in which the project will be realized.

The selection of projects will include an assessment of their environmental impact. Support claimants will be informed in advance of the environmental issues and of any potential link between the projects they submit and the environment. The aim is to advise the claimants and eliminate any potential negative impacts the projects may have on the environment and public health, and prefer those projects whose impact will be either non-existent or negligible. The claimants’ attention will be drawn to the fact that already during the preparation and subsequent consideration of the individual projects, Specially Protected Areas, their protection conditions and their preservation plans must be respected, as must be localities with the occurrence of Specially Protected Species of plants and animals. Relevant environmental and landscape protection bodies will be involved in the selection of specific projects.24 Specific projects supported under the ROP „Northeast“ will have to respect regional protection and integrity of the European-significant sites, as well as the Important Bird Areas of the Natura 2000 Network, and must not lead to any damage or deterioration of the object of protection in these areas. Projects included in the regional and local programmes for the improvement of air quality, drafted in accordance with Act No. 86/2002 Coll., on Air Protection, as amended, will get priority support. The assessment of impacts the projects may have on the environment shall be done in compliance with the Environmental Impact Assessment Act.25 Environmental impact assessments shall be done using the EIA procedure (assessment of designs). Under the EIA procedure, buildings, activities and technologies specified in Schedule No. 1 to the Act will be assessed. ŘO ROP „Northeast“ prepares criteria which will be approved by MV. These criteria will aim at fulfilling in particular Strategic goal 4 – Balanced territorial development.

Beneficiary Duties

24 During the project selection, account should be taken of whether none of the below circumstances arises in connection with the project implementation: - violation of the protection conditions of any Specially Protected Area; - violation of any protection and integrity areas and localities within the Natura 2000 Network (European-significant sites and Important Bird Areas); - damage or elimination of biotopes with the occurrence of Specially Protected Species of plants and animals; - interferences in features of the Regional System of Environmental Stability (ÚSES) and Significant Landscape Features (VKP), a negative impact on natural habitats, biotopes, fauna and flora; - increased landscape fragmentation, reduced landscape pass ability.

25 Act No. 100/2001 Coll., On Environmental Impact Assessment and Amending Certain Related Legislation (Impact Assessment Act). Decree No. 457/2001 Coll., on Professional Qualification and Regulation of Certain Other Issues Related to Environmental Impact Assessment.

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The claimant shall submit its project proposal to authorised staff in the local offices of the Office. Only entities with legal subjectivity may become support Beneficiaries. The Beneficiary shall receive financial aid under a contract on granting subsidy concluded by and between the Beneficiary and the Managing Authority under Act No. 250/2000 Coll., on Budgetary Rules for Territorial Budgets.

The support Beneficiary shall ensure: a) processing of the requests for aid provision, including project identification, evaluation and preparation, including a financial plan; b) preparation of project master documentation; c) awards of public contracts and signing of the relevant contract documents with the contractors in close coordination with the Managing Authority; d) proper implementation of project in accordance with the contracts concluded wit the selected contractors; e) verification of invoices and payment of the verified invoices to the contractors; f) functioning of a separate accounting system for the project within the meaning of Act No. 563/ 1991 Coll., on Accounting, as subsequently amended; g) internal financial audits; h) submission of regular reports to the Managing Authority on the project progress, or eventually any occasional reports during the preparation stage; i) processing and submission of documents to the Managing Authority for monitoring; j) regional and local publicity and information billboards at construction sites, within the meaning of the applicable EU regulations.

The Beneficiaries shall be responsible for the eligibility of project costs submitted for reimbursement under the ROP „Northeast“ and for the compliance of project implementation with the terms of the funding contract and the applicable CR, as well as EU legislation.

When submitting payment requests, the Beneficiaries shall justify the submitted costs and document their compliance with the project implementation conditions provided by the funding contract. Any payment claims must be supported by documents showing that the funds are to be expended effectively, economically, sensibly, and transparently.

The Beneficiaries shall ensure that project documentation is kept to provide a sufficient aid for audits focusing on financial flows.

The Beneficiaries shall enable the project documents to be available at any time for inspections and audit investigations carried out by authorised persons or entities. The documents will be kept on file in compliance with the EU andČRlegislation in force.

8.3 Financial Management

The EU (SF) budget funds shall be sent by the European Commission to the account of the PCO. Within the PCO, the EU (SF) budget funds will be managed by the Financial Management and Payment Methodology Department of the MF of the CR, which will also transfer the EU (SF) budget funds to the state budget (SR).

The ROP „Northeast“ system of financial flows from the EU (SF) budget rests on a principle of funding requests for payments from the funds of the Regional Council, which has received the funds to fund a share of the EU (SF) budget from the MMR chapter budget, as well as a share of funds reflected by national co-financing from the MMR chapter budget and from the regional budgets. The EU (SF) budget funds will subsequently be paid in arrears to the PCB, to the account of the MMR chapter administrator. Subsidies provided from SR for pre-financed outlays which should be covered by funds from the EU budget and by funds for national cofinance in keeping with amended law no. 218/2000 of the legal code concerning budget regulations are provided by MMR on the basis of a Decision Concerning the Provision of Subsidies. MMR issues a Framework decision concerning the provision of subsidies for the 2007-2013 planning period. In connection with this decision, MMR issues a Decision on Concerning the Provision of Subsidies for the appropriate calendar year within 15 working days

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from the day of receiving an error-free application for the provision of subsidy from ŘO ROP „Northeast“. The subsidy shall be granted from the MMR budget mainly based on beneficiaries expenses estimated for a certain time period. The subsidy provided for financing of projects of the ŘO ROP „Northeast“ (or its first instalment respectively) is transferred by the MMR to a special account of the ŘO ROP „Northeast“ within 15 days from the day of receipt of the decision for the provision of RR subsidy. Dates and transfers of finances of next instalments are determined by MMR in the Decision Concerning the Provision of Subsidies.

EU resources, resources of Regional council, krajs, and municipalities are included in process of cofinancing, as well as private resources of a beneficiary. Regional council budget consists primarily of resources of state budget and krajs´ budgets. Private financing is presumed to with support areas: 1.2 Support for projects improving transport services, 2.2 Urban development, 2.3 Rural development, 3.1 Development of basic infrastructure and accompanying activities in the area of tourism, 3.2 Marketing and coordination activities in the area of tourism, 4.1 Support for infrastructure development for commerce.

Systems of SF Financial Flows – Description

Payments to Beneficiaries are made as ex-post payments (arrear payments of costs already expended by the Beneficiary) or as ex-ante payments (by providing the Beneficiary with funds before its project costs are expended).

Ex-post payment:

1) On the basis of the expended costs, the Beneficiary shall make a request in CZK for fund reimbursement from the Regional Council’s budget (corresponding to the European and national share), submitting the request to the Managing Authority for inspection and approval; 2) the Managing Authority shall approve the request and instruct the Finance Section to make a payment to the Beneficiary’s account; 3) the Office Finance Section shall make a payment from the Regional Council’s budget to the Beneficiary’s account; 4) following a confirmation of the Regional Council’s Finance Section of the payments made from the Regional Council’s budget, the Managing Authority shall issue a collective request for making a payment from the EU (SF) budget funds to be transferred from the account of the Payment and Certification Body to an appropriate chapter of the state budget; 5) the collective payment request is transferred to the administrator of the chapter of the MMR who registers it so that it is possible to follow the exploitation of the financial aid from SF and then the collective payment request is passed to PCO to be payed; 6) the Payment and Certification Body will check the submitted collective request, its posting (the determination date for setting an exchange rate to convert the funds from CZK to EUR being the date of posting by the Payment and Certification Body) and the subsequent payment of the EU (SF) budget funds to the chapter of MMR; 7) following the certification, the Payment and Certification Body will ask the European Commission to refill the funds on its account; 8) the European Commission will approve the application and send the funds to the account of the Payment and Certification Body.

Ex-ante payment:

Ex-ante payment proceeds only in a case of Technical assistance, where the beneficiary is ŘO ROP „Northeast“:

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1) payment in advance for the TA expenses when the beneficiary is kraj is provided only according to VRR resolution 2) ŘO ROP „Northeast“ pays the eligible costs to suppliers 3) when the project is finished, final account of payment in advance (ex-ante payment) is done 4) following a confirmation of the Regional Council’s Finance Section of the payments made from the Regional Council’s budget, the Managing Authority shall issue a collective request for making a payment from the EU (SF) budget funds to be transferred from the account of the Payment and Certification Body to an appropriate chapter of the state budget; 5) the collective payment request is transferred to the administrator of the chapter of the MMR who registers it so that it is possible to follow the exploitation of the financial aid from SF and then the collective payment request is passed to PCO to be payed; 6) the Payment and Certification Body will check the submitted collective request, its posting (the determination date for setting an exchange rate to convert the funds from CZK to EUR being the date of posting by the Payment and Certification Body) and the subsequent payment of the EU (SF) budget funds to the chapter of MMR; 7) following the certification, the Payment and Certification Body will ask the European Commission to refill the funds on its account; the European Commission will approve the application and send the funds to the account of the Payment and Certification Body

Certification Body (CO) In implementing aid from SF and FS, only one certification body is set up, ensuring activities will be in accordance with Article 61 of Council Decree. The function of the certification body is in the ČR performed by the PCB is appointed by the government. Pursuant Government Decree No. 198 of 22 February 2006, the National Fund of the MF of the ČR which is functionally indepndent of the managing body and the auditing body, and which was committed to the performance of the PCB’s function for structural funds (“SF”) and the Cohesion Fund (“CF”). The National Fund does not delegate performance of this function to intermediate entities. The diagram of functional division of the Managing Body, the Certification Body and the Auditing Body is given in Illustration 28.

In particular, the following activities are performed by the PCB: • manages and coordinates financial flows from EU budget and ensures the smooth flow of financial funds from the PCA to beneficiaries; • sets and updates methodical instructions for the certification of SF and CF expenditure; • ensures that beneficiaries receive EU contributions without undue delay; • processes and submits certified statements of expenditure and applications for payment (interim and final) to the EC, for all programmes on the basis of statements of expenditures submitted by the managing authorities; • verifies the accuracy of statement of expenditure, that it results from a reliable accounting system and is based on verifiable supporting documents, certifies this statement and approves the applications for payments from the EU; • monitors procedure manuals used by the bodies involved in the implementation of SF and CF and verifies the compliance with these procedures; • continuously monitors and verifies the compliance of activities and procedures of the managing authorities with applicable Czech and EU acts; • verifies the application of the management processes and control systems used by the managing authorities (including the on the spot checks); • evaluates drawing performance of allocations; • receives payments from EU budget and ensures transfers of funds to the budget chapters; • provides methodical guidance to the preparation of forecasts of applications for payment from the EU budget and submits these forecasts to the EC; • provides for the concept, methodology, establishment, development and operation of the accounting system used for the administration of SF and CF, • provides methodical management in the field of accounting for SF and CF funds; • cooperates with the EC in the mid-term and ex-post verification of the additionality; • ensures the recoveries of amounts unduly paid in the case the principles of operation terms are violated

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• passes on the copies of applications for interim and final payment and copies of certificates to the Audit Body

The Office Finance Section performs the following main activities: - ensuring current conversions of allocations from EUR to CZK; - ensuring available financial resources in the RC budget; - ensuring transfers of funds from the RC’s budget to their Beneficiaries for the funding of projects co-financed from the EU budget, within 15 workdays from receiving a payment request from the Managing Authority (MA); - keeping precise and complete records about transfers from the RC’s budget to the Beneficiaries; - providing the MA with any required information on the transfer of funds to their Beneficiaries in accordance with its records (mostly data about the Beneficiary, amount of transferred funds, date of payment to the Beneficiary); - proceeding in accordance with its internal written working practices (manuals) while performing the activities related to the transfer of funds to their Beneficiaries;

In financial management the finance section proceeds according to the Policy of Financial Flows and Control of Programmes Co-financed from the Structural Funds, the Cohesion Fund and the European Fisheries Fund for the Program Period 2007-2013, developed by the MF of the CR.

The management and payment function subsection is set up within a functionally separated department and is also provided for in terms of human resources. The management and payment functions are laid out in detail in the Operational Manual for the ROP „Northeast“. A description of functional divisions, the implementation diagram and the organisation structure diagram are given in the llustrations 26 – 28.

8.4 Control System

Auditing Body The Auditing Body (AB) is established within the meaning of Art. 59 of Council Regulation. Under Government Decree No. 198 of 22.2. 2006, the Ministry of Finance has been appointed to perform the function of the AB for the SF. By the decision of the MF, the performance of the AB function for the SF was delegated to the Central Harmonising Unit for Finance Control of the Ministry of Finance, being functionally independent on the Managing Authorities and the Payment and Certification Body (hereinafter “PCB”). The diagram of functional division of the Managing Body, Certification Body and Auditing Body is given in the Illustration 28.

In compliance with the requirements of the applicable EC legislation and legal regulations of the CR, the AB performs the following main functions:

1. ensuring readiness audits of the programme management and control systems; 2. in keeping with article 71 of the General Regulation, it submits to the European Commission, prior to filing the first interim payment request and no later than 12 months following an approval of the respective programme, a report considering the settings of the programme management and control systems, including an opinion on their compliance with the applicable EC legal regulations; 3. submitting to the European Commission, within 9 months following an approval of the respective programme, an audit strategy, including entities to perform the audit; 4. ensuring performance of audits in State administration in order to verify functioning of the programme management and control systems; 5. submitting to the European Commission an annual updated audit strategy, a sampling method for operation audits and a preliminary audit planning ensuring performance of the audits for the major entities and an even distribution of the audits over the whole program period; 6. submitting to the European Commission an annual consolidated audit plan for funds granted from the SF; 7. checking, once every quarter, performance of the consolidated audit plans and informing the PCB thereof;

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8. ensuring that the PCB receives, for certification purposes, the results of all audits performed by the AB or under its authorization; 9. ensuring performance of audits in State administration using an appropriate sample of operations to verify the expenses reported to the European Commission; 10. ensuring methodological guidance for the other auditing entities involved in the audits in State administration under all programmes; 11. supervising quality of the audits in State administration performed by the other auditing entities under projects co-financed from the SF; 12. taking part in the creation and updating of guidelines for the performance of audits in State administration in respect of programme funds; 13. submitting to the European Commission, on a yearly basis in the period from 2008 to 2015, an annual audit report, containing findings of the audits performed during the previous year in compliance with the programme audit strategy, as well as any shortcomings identified in respect of the programme management and control systems. Any information concerning audits performed after July 1, 2015 will be included in the final audit report to form a basis of the Closeout Statement; 14. issuing for the European Commission, on an annual basis, an opinion on whether the function of the management and control system gives an adequate guarantee that the cost reports presented to the European Commission are correct and the related transactions legal and regular; 15. taking part in audit missions of the European Commission to verify aspects of the management and control system which have resulted from the annual audit report; 16. presenting a Partial Closeout Statement to assess legality and regularity of the expenses concerned under Art. 88 of the General Regulation; 17. submitting to the European Commission, no later than March 31, 2007, a Close-out Statement to assess validity of the final payment request, as well as legality and regularity of the related transactions included in the final cost report; 18. cooperating with the European Commission in coordinating audit plans and audit methods and exchanging results of the audits performed; 19. ensuring that any internationally recognized auditing standards are applied on the audit activities; 20. carrying out analyses of the reported irregularities to draw up a Closeout or Partial Closeout Statement; 21. elaborating annual reports on the results of financial controls under the programmes for the Government of the CR; 22. carrying out supplementary audit in order to verify effective functioning of managing and control system of operational programme; 23. carrying out supplementary audit of operations on suitable sample to verify documentary expenses.

The AB is responsible for ensuring the above activities. It can authorize other auditing entities to perform selected activities, while keeping its own responsibility. Only one level of authorization to perform the above activities is allowed (i.e. an auditing entity may not authorize another entity to perform the activities), on the basis of a contract governed by public law.

The Auditing Body appointed RR Northeast Cohesion Region, according to Article 62. Par. 3 Council Regulation, to perform Auditing Body´s activities. Appointed Auditing Body takes steps in following activities: • Audit in order to verify effective functioning of managing and control system of operational programme • Audit of operations on suitable sample to verify documentary expenses Those activities will be for ÚRR Northeast performed by functionally independent section of internal audit with Article 62. Par. a) and b) of Council Regulation.

A detailed account of competent activities is available in OM ROP „Northeast“.

Financial Control System Acting as the central Administrative Authority for financial control pursuant to the applicable provisions of Act No. 2/1969 Coll., on the Establishment of Ministries and Other Central Authorities of the State

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Administration of the CR, as subsequently amended, the Ministry of Finance guides, manages, coordinates and ensures the performance of financial control under he Operational Programme. The main basis for releasing separate guidelines, consulted with relevant bodies of the European Commission, is provided by legal regulations of theČRand EC in force. The control system must clearly differentiate between a State administration control system and a management system from an internal audit system and a sample operation audit system.

Internal Control System All of the bodies taking part in the implementation of the Operational Programme shall implement a necessary management and control system, complying with national legislation and being capable of identifying any administrative, system or intentional errors and of creating conditions for the prevention of errors.

Management Control is ensured by responsible managers, forming a part of internal management of all the entities involved in the Operational Programme implementation, in the preparation of operations prior to their approval, in the continuous monitoring of the performed operations until their full settlement and accounting and subsequent verification of selected operations, as part of an evaluation of the results achieved and of the management correctness.

With regard to principles of an efficient and effective management and control system during the programme implementation, the Managing Authority shall ensure that: - all entities involved in the programme management and control have uniquely defined specific functions, both within the whole implementation system and within each separate entity; - the principle of separating payment, management and control functions among the entities involved in the programme implementation and within the entities themselves is observed; - unique procedures are defined for ensuring correctness and eligibility of costs reported under the programme; - reliable accounting systems, monitoring systems and financial reporting systems are implemented; - a system of reporting on programme and project implementation and monitoring is implemented; - measures are taken to audit the management and control system functioning; - such systems are implemented and procedures defined as will ensure records for the audit (audit trail); - procedures are defined to report and monitor irregularities and to recover unjustified payments;

For each level of the programme management and implementation, an internal control system manual will be developed in the form of controlled documentation, containing a detailed description of the working procedures for the activities performed.

Among the tasks of the Managing Authority in the course of managing and carrying out the operational program are in particular: 1. to ensure that operations are chosen for financing on the basis of criteria for the given operational program and that these comply with valid regulations of the Community and internal regulations for the entire period of their execution; 2. verify whether co-financed products have been supplied and services rendered and whether expenditures accounted for by beneficiaries have in fact been paid out and whether they are in keeping with regulations of the Community and internal regulations; 3. ensure that beneficiaries and other entities involved in carrying out the operation keep either separate accounting systems or a corresponding accounting code for all transactions connected with the operation without violating internal accounting codes; 4. ensure financing of the program from national public sources; 5. provide evidence, investigation and report suspicions of imbalances and verified imbalances, and their further monitoring and in particular cases also seizure of the financial means in question, 6. ensure that the Payment and certification body receives all necessary information concerning procedures and verification carried out in connection with expenditures for certification purposes;

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7. in accordance with Article 60, letter f) of the General Regulation determine procedures to ensure that all documentation concerning expenditures and audits of the program necessary for the provision of corresponding audit traces be kept in accordance with the requirements of Article 90 of the general regulations; 8. oversee the work of the Monitoring Committee and provide the committee documents enabling it to assess the quality of the operational program's execution, taking into consideration its concrete target; 9. write out annual and concluding reports concerning execution and upon approval by the Monitoring Committee, present them to the Commission; 10. ensure conformance to requirements concerning the provision of information and propagation as set out in Article 69 of the general regulations.

Internal Audit An internal audit division will be functionally independent and organisationally separated from the governing and executive structures and subordinated to an appropriate Governing Body of State administration. The internal audit divisions will check the internal control system at regular intervals. Their activity will include, among other things, a verification of how basic requirements for the internal control system are met. Other important tasks will include a submission of recommendations to improve the quality of the internal control system, to prevent or reduce risks, to adopt measures for removing identified inefficiencies, and consultation activities. Reports from internal audits regularly performed at each implementation level will be submitted to an appropriate Governing Body of State administration. A unified approach to performing audits at all implementation levels and to reporting the audit findings shall constitute a basis for risk management at the governing-body level.

Control in Public Administration (Primary System) The Managing Authority (hereinafter “MA”) is responsible for managing and implementing the Operational Programme in compliance with the principle of proper financial management, therefore ensuring that operations for funding are selected according to the Operational Programme criteria and that they comply with the applicable Community regulations and national legislation throughout the implementation. The MA ensures inspections within the primary system by checking that co-financed products and services are delivered and operational costs reported by Beneficiaries actually expended. The MA ensures system existence for making and keeping accounting records in the electronic form for each operation and gathering any audit-relevant data. The MA’s task is also to ensure that procedures and any documents relating to the Operational Programme costs and audits are available to the European Commission and the Court of Auditors for the period of three years from the Operational Programme closeout.

Audit (Secondary and Central System) Pursuant to Act No 62 of General Regulation, the AB is responsible for performing audits in State administration in purpose to verify effective functioning of ŘO and the control system of operational programme and to accomplish audit of sample operation. Within the secondary system, it verifies effectiveness of the financial management and control system, subsequently testing correctness of the risk transactions against the permissible level of risk for the field of primary system. Within the central system of the AB, it verifies and assesses, on a residual-risk basis, adequacy and effectiveness of the primary and secondary system function and performs audits of operation samples.

The audit results will be communicated to the Commission in accordance with Article 73(1) of the General Regulation.

Control performed by the Supreme Audit Office The Supreme Audit Office is entitled to perform independent control activities under the applicable provisions of Act No. 166/1993 Coll., on the Supreme Audit Office, as subsequently amended.

Audit Activities by the European Commission Bodies and the European Court of Auditors The European Commission will check that under the Operational Programme in question, management and control systems have been implemented and are working properly, in compliance with Article 72, Par. 1, of the General Regulation. This audit is performed by the European

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Commission on the basis of annual audit reports, and the AB’s opinion on such reports, and on the basis of its own audits.

The European Court of Auditors, performing, within the scope of its authority, independent audits given by its scope of authority.

Irregularities All the bodies taking part in implementation of the Operational Programme are under an obligation to report to the MA ROP Northeast any suspected irregularities. MA ROP Northeast is responsible for examination and solving of irregularities, and it keeps files of any suspection of irregularity (or confirmed irregularity respectively), takes examination on it and further monitoring. Regional council staff determined as an AFCOS contact place is responsible for proper reporting on an external level. Regional council itself exacts financial resources touched by irregularity, proceeding in accordance with Law No 337/1992 Sb.

The MA will examine such irregularities, referring those that prove legitimate in the light of audit findings to the appropriate bodies to initiate administrative or legal proceedings. Reports of the auditing bodies should always be considered legitimate. Also, the MA will, by the 15th day of the following month, report any legitimate suspicions to entities involved in external reporting. 8.5 Monitoring

In compliance with Council Regulation (General Regulation), the Managing Authority is generally responsible for programme monitoring. The Managing Authority is responsible for correct, effective, systematic and timely monitoring during programme implementation, for data entered in the monitoring system and informing the European Commission of the course and general results of the programme.

Under Article 63 and 64 of the “General Regulation”, the Managing Authority shall establish, within three months from the approval of the Operational programme by the EC, a Monitoring Committee.

Monitoring Committee

In accordance with Article 63 and 64 of the General Regulation, the monitoring committee is established by the member state upon agreement with the managing body, within a period of three months from notification of the decision of approval of the operational program. The committee is composed of representatives suggested by pertinent organizations and institutions which have been contacted by the Regional Council. Individual organizations nominate their representatives in accordance with the principle of equal opportunity. Members of the Monitoring Committee are appointed by the RC Chairman, taking into account the partnership principle and, if possible, an equal representation of men and women. The goal of the monitoring committee is to provide effectiveness and quality in the aid provided.

The partnership principle is ensured in the Monitoring Committee of ROP „Northeast“ by membership of representative partner institutions from the areas of public administration and territorial administration, economic and social entities, nongovernmental nonprofit organizations (especially organizations operative within the area of the horizontal themes, i.e., entities which champion equality between men and women and those focused on sustainable development and ecology). At the same time, membership is provided for representatives of other operational programs, with an eye to achieving synergy and partnership. Commission representative takes participation in work of the Monitoring Committee as an advisor on his own request or on request of the Monitoring Committee

Membership of individual partner entities in the Monitoring Committee provides for bilateral linkage, communication and coordination of information and proposals between the ROP „Northeast“ managing body, its partners and the general public.

The committee chairperson, through the secretariat, sends a definitive version of the program, together with supporting documentation for the committee meeting, to all members or their authorized

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representatives before the day of the meeting. This ensures that all members have an opportunity to thoroughly acquaint themselves with the documentation.

In cases of necessity, working groups may be set up to solve particular problems. The committee members include representatives of:

• the Managing Authority of ROP „Northeast“, • regions, • statutory cities • social and economic partners, • professional associations and the academic community, • non-governmental non-profit organisations, • PCO and AO • the European Commission.

The Monitoring Committee draws up its Code of Procedure which it adopts after agreeing with the RC, for the purposes of performing its activities in compliance with the General Regulation.

The duty of the Monitoring Committee is to ensure supervision over the ROP „Northeast“’s implementation, particularly over ensuring compliance with EC regulations andČRlegislation, achieving the programme targets while using public funds effectively, etc. The Managing Authority shall perform the functions of a secretariat for the ROP „Northeast“ Monitoring Committee.

In compliance with Article 65 of the Regulation, the Monitoring Committee shall ensure the following main activities: a) monitoring the OP preparation, implementation, and evaluation, including its effectiveness and efficiency; b) considering and approving project selection criteria, including all revisions of such criteria; c) evaluating the procedure used to achieve Specific targets of the OP and to achieve targets for each Priority Axis of the programme; d) analysing results of the OP implementation, e) considering and approving the annual and final reports of the OP before sending them to the European Commission; f) making proposals to the Managing Authority for revising or reviewing the ROP „Northeast“ in order to achieve the ROP „Northeast“’s targets, including financial management; g) considering and approving all proposals for amending the contents of the Commission Decision on ERDF contribution.

Monitoring System

Information system for monitoring of programs for the 2007-2013 period (hereinafter also ms2007) Creation of the Structural Fund Monitoring System is based upon an EC requirement for the existence of a monitoring system (see General Regulation), on the requirement for electronic data exchange (see Implementation Provision, Article 39-42), and in accordance with government resolution no. 198/2006 to build a unified monitoring system. The managing body is responsible for the direction and provision of the operational program in accordance with the principle of proper financial management, especially ensuring the existence of a record-keeping system and a system for preserving accounting records in electronic form for every operation which is part of the operational program, and for collecting data concerning the provision of essential financial management, monitoring, certification, auditing and evaluation. The monitoring system must thus be compatible with ROP „Northeast“ accounting systems. The information system for monitoring of programs is an information system devoted to the monitoring implementation of programs and projects co-financed from the Structural Funds. It ensures current information in adequate form and extent, integrity of the data and contains complete data about the program. The monitoring system of the Structural Funds serves for effective administration of ROP „Northeast“ and for ensuring reports for the pertinent General Directorate of the EC, government, Parliament and last but not least, the region.

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The MMR fulfils a coordinating and methodological role in the monitoring process. MMR issues directives and methods in the area of management, evaluation, data collection and the electronic exchange of data, establishment and functioning of monitoring committees, and monitors and supervises all activities falling under the aegis of the managing bodies of the operational programs. MMR further establishes and ensures the functioning of an integrated information monitoring system which is to be used by the managing bodies of all OPs, Payment and certification body and auditor, and ensures the electronic exchange of documents and data.

The basic means for providing for unity in the monitoring system consists in determining the extent of obligatory data and obligatory approaches for obtaining and transferring it. The provision of comparable, factually correct and current data for support management, monitoring and evaluation is ensured by the binding Methodology monitoring method SF and FS 2007 – 2013. This methodology defines the extent of centrally obligatory data, obligatory approaches and time periods for monitoring operational programs and projects at all levels of implementation and which the Ministry for Local Development has worked out as a binding methodology for all managing bodies. Together with the determination of unified and binding approaches for transfer of data, a unified monitoring system is thus provided for at all levels of implementation, which will ensure all data necessary for management, monitoring and evaluation of programs and projects, including regular data collection from beneficiaries of aid for purposes of monitoring the progress of project realization via the web account of the beneficiary. Data communication between CO accountant system IS VIOLA as a basic tool for support of function of CO and MSC 2007 as a tool for the central monitoring of EU funds is ensured on a level of MMR.

For monitoring the 2007-2013 programming period, starting 1.1. 2007 full functionality of the monitoring system – ms2007, which will provide monitoring at all levels of implementation (central level, executive level, applicant/beneficiary level) will be in place. The system ensures full support for management, monitoring, evaluation and administration of programs and projects. It respects the demands of the EC and ensures required functions for data collection and transfer of this data to the EC and PCO.

The monitoring system ensures observation of the following activities: use of structural fund financing and national co-financing monitoring, evaluation and quality-control activities communication with the EC provision of information in the standard monitoring table of the EC observation of information at the recipient level connection to the relevant public administration system fulfilling monitored indicators (fulfilling stated targets) Ms2007 is further organized at three levels: central/managing (MSC2007), executive-information system of the operational program (MONIT7+) and the recipient level - web application (BENEFIT7). The MRD creates, primarily for monitoring the financial assistance, an information system that constitutes one of prerequisites for accepting assistance from the SF and from the CF. In conformity with the Government Resolution No. 198/2006 the MRD provides a uniform central information system in support of management, monitoring and evaluation at all levels of programmes and projects financed from the SF and CF. The system is binding on all implementing subjects in the programming period 2007 - 2013. The MRD manages the setting of an information system in the area of management, data collection, monitoring and communication with the EC. It has provided with the readiness of the central monitoring system, which is an important instrument for managing the implementation of all OP as well. The MAs are obliged to enter data in the required scope, structure and in the defined deadlines from the beneficiary level on the basis of procedures as defined in the operational manuals.

MSC2007 Information System The central database MSC2007 is the basic tool for gathering and preserving information about the process of providing aid from the EU to the ČR. The level of this database insurers planning development, programming and evaluation of operational programs from a factual and financial monitoring standpoint. It provides overall information about the preparation and state of realization of the program and overall EU assistance in the ČR. MSC2007 serves as a basic SW tool of the

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Managing Authority of the ROP „Northeast“, CPO and NOK. The MSC2007 administrator is the Department of Monitoring System Administration of the MMR (OSMS), which is responsible for the administration of user approaches, transfers, interface definition, emergency plans and system development. The basis for electronic data exchange with the EC is MSC2007, from which data concerning all programs in the ČR is given over to the EC-System for Fund Management in the European Community 2007 - 2013 monitoring database (hereinafter SFC2007). The module "Data for SFC2007" was created as part of MSC2007. This serves for authorization of the required output sets of the ŘO entities responsible for management and coordination of the program. This model ensures the creation of export files (with obligatory information) sent to SFC2007. Each MSC2007 user has overview access to the "Data for SFC2007" module in MSC2007. Editorial access, defined by the list of roles, is granted to representatives of the entities connected with the process of management, monitoring and quality-control, all on the basis of the assignment of roles and competencies under OSMS MMR. MSC2007 is also connected to the information system of the Payment and Certification body (IS VIOLA). This system serves for financial management and accounting of monies from the EU budget. Total Requests for Payment are transferred from MSC2007 to IS VIOLA. Total Reality is then reciprocally transferred from IS VIOLA to MSC2007.

MONIT7+ Information System IS MONIT is an information system for administering projects and program management. It provides for the execution of preparations and realization of actual projects, i.e., the collection and evaluation of applications, operational documentation from projects, factual and financial monitoring and the project and program levels, reporting on providing data to subordinate bodies. IS Monit serves as a basic SW tool for the implementation of the ROP „Northeast“. The administrator of IS Monit is the CRD of the ČR, which is responsible for the administration of user approaches, security, backup, transfers, interface definition and providing for system development. Access to the IS Monit database is via the web interface. BENEFIT7 Web Application

The Benefit Web Application is a software tool for recipients. It consists of an electronic application which serves to help applicants fill in information about the project planned, a new or modified version of which is created for each invitation to submit projects. A unified application serves for bilateral communication between ŘO ROP „Northeast“ and applicants/recipients. All users access the system of web applications via the Internet. The central depository of web applications will be the MMR server.

EK SFC2007 Information System The CR has selected a variant whereby data will be transferred to the EC system SFC2007 via a technical interface and Internet. The electronic data interchange comprises transfer of data from the Czech database MSC2007 to the EC database SFC2007. It comprises preparation in, and subsequent transfer of the necessary data from the Czech database MSC2007. A special module has been created in the Czech database MSC2007 for data authorisation by MA responsible for management and co-ordination of programmes utilising the EU funds. The module will provide for creation and export of validated data from the managing authorities, the PCA via the Internet to the SFC2007 database of the European Commission. The module satisfies the requirements imposed by the European Commission on eGovernment The System for Fund Management in the European Community 2007 - 2013 (hereinafter SFC2007 ) is an EC information system which aids in keeping to the regulations of EU funds. SFC2007 is created by the Information System and System of Financial Management (used only by the EC). The member states and the EC take advantage of the Information System which serves for the communication and exchange of documentation between member states of the EU and EC, to which all institutions working with EU funds are obligated to transfer all general information necessary for the implementation of the provision. The European Commission Information System is tied to the Central 2007 monitoring system (hereinafter also MSC2007), thanks to Web Services via the Internet, which enables a direct interface. Access to the SFC2007 database is possible only for registered users, upon the submission of a

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username and password assigned by the coordinator for SFC2007 with the role of MS Liaison for the ČR. Every member country, including the ČR, names one person to be assigned the role of MS Liaison, and who is the contact person for all tasks connected with requests for access. In the case of the ČR, an MMR representative plays this role. Password privileges are granted only to entities connected to the implementation of programs for the ČR, primarily in overview mode. Active access to SFC2007 is granted only exceptionally.

Annual and Final Reports on realization

The MA will ensure that MC’s reports are prepared, discussed, agreed, and subsequently presented to the EC. Annual reports will be presented to the EC within 6 months from the end of each completed calendar year of implementation.

The final report on implementation will be submitted to the European Commission by March 31, 2017.

All annual and final implementation reports should contain the following information:

• important socioeconomic trends relating to support, including national, regional and sector policies; • progress which has been achieved in the course of ROP „Northeast“ and the priority axes implementation relating to their specific and verifiable targets, which are (if possible) quantitatively expressed with help of indicators • financial implementation of aid, a summary of total cost reimbursed by the Payment and Certification Body for each measure, records of total payments by the European Commission, and quantification of financial indicators; • all steps taken by the Managing Authority and the Monitoring Committee to ensure quality and effectiveness of the implementation, including in particular: − monitoring, financial control and evaluation of measures, including arrangements for data collection; − a summary of all substantial problems occurring during the support management and a summary of the measures taken; − measures to ensure publicity; • steps to ensure compatibility with the Community policy; • measures adopted to ensure awareness and publicity about the OP; • information on significant problems relating to compliance with Community policies, identified during the OP implementation, and the measures taken to remedy them; • development in large project financing; • use of aid returned to the Managing Authority or another public body during the period of OP implementation, under Article 99 (2) of the Regulation.

Every year, after the annual report is submitted to the EC, the EC and the Managing Authority will consider major outputs of the previous year. Following this consideration, the EC may raise objections, with the Managing Authority notifying the EC of any measures adopted on the basis of such objections. If the European Commission concludes that the adopted measures are insufficient, it may recommend to the Managing Authority any changes making the support monitoring or management more efficient. The Managing Authority should respond to such recommendations by implementing the recommended changes or by explaining why the proposed recommendations have not been accepted.

The removal of insufficiencies in the monitoring and management system – on the Commission’s recommendations – is one of the conditions for making interim payments.

Earmarking The ROP North East has identified earmarked interventions in total amount of 55 599 992 EUR, which represents 8.47 % of the total ERDF allocation of the ROP of 656 457 606 EUR.

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The codes of earmarked intervention areas are the following: Code Category of expenditure Amount in EUR 28 Intelligent transport systems 6 358 214 29 Airports 12 144 466 52 Clean urban transport 18 453 917 3 Technology transfer and improvement of cooperation networks between 1 050 332 small businesses (SMEs), between these and other businesses and universities, post-secondary education establishments of all kinds, regional authorities, research centres and scientific and technological poles (scientific and technological parks, technopoles, etc.) 5 Advanced support services for firms and groups of firms 3 983 746 8 Other investment in firms 9 452 989 9 Other measures to stimulate research and innovation and entrepreneurship 525 166 in SMEs 68 Support for self-employment and business start-up 2 625 830 72 Design, introduction and implementation of reforms in education and 1 050 332 training systems in order to develop employability, improving the labour market relevance of initial and vocational education and training, updating skills of training personnel with a view to innovation and a knowledge based economy Total earmarked interventions 55 599 992

Total ERDF allocation of the ROP 656 457 606

Total percent share of earmarked interventions 8,47

The Cohesion Region North East is eligible for funding under the Objective Convergence. The regulatory obligation in line with article 9 of general regulation 1083/2006 to ensure that 60 % of the expenditure for the Convergence objective is set for the European Union priorities of promoting competitiveness and creating jobs, including meeting the objectives of the Integrated Guidelines for Growth and Jobs is not binding for the Czech Republic since it accessed the European Union after 1 May 2004. Nevertheless, the Czech Republic committed itself in official letter submitted to the European Commission on 4 July 2007 to earmarking. The reasons why the share of earmarked interventions within total Community allocation to this Objective is only 8.48% are above all following ones: The interventions in the area of R&TD are out of scope of the Regional operational programmes For efficiency reasons it is mainly OP Enterprise and innovations that support innovation and entrepreneurship in the regions For efficiency reasons the ICT in regions is co-financed mainly from the Integrated Operational Programme The TEN-T is co-financed from the OP Transport

During the implementation of this Regional Operational Programme the Managing authority should prioritise those projects which fall under earmarked interventions.

8.6 Programme Evaluation

Under the provisions of Articles 47 and 48 of the General Regulation, obligations arise in relation to evaluation performance. The evaluation performance aims at improving the quality, effectiveness, and consistency of fund aids and operational programme implementations. Obligations connected therewith include in particular: - composing, implementing, updating, and assessing the ROP „Northeast“ evaluation plan (in connection to NSRR evaluation plan);

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- ensuring major evaluations (ex-ante, on-going, ad hoc, ex-post,), - providing resources for the performance of evaluations and using data and information from the monitoring system for NOK cross-sectional evaluation, strategic reports 2009 and 2012 in keeping with the General Regulation (article 29, par. 2) and ex post evaluation carried out by the EC; - mutual active cooperation with evaluators and evaluation staff on various levels, implementation of structural funds and the Cohesion fund in the CR - publishing evaluation results.

Under the General Regulation, the aim of evaluation is to: - improve the quality and effectiveness of aid granted from EU funds and ensure its consistence with EU goals; - improve the strategy, and make more efficient, the operational programmes, while emphasising specific structural problems and sustainability .

According to the General Regulation, the evaluation goal is: - increase in quality and effectiveness of help provided by EU funds and its consistency with EU goals - improving the strategy and enhanced implementation of operational programmes with an emphasis put on specific structural problems and sustainable development

The realization of the ROP „Northeast“ evaluation is the responsibility of the Managing Authority of ROP „Northeast“, the independent section of the Department of Methodological Management of the programme and monitoring acts as the evaluation department. The organization structure of URR Northeast is given in Annex 10.5.

The evaluation department carries out mostly these activities: • compilation, realization and evaluation of the evaluation plan and its annual updates, • preparation (assigned project conditions, selection procedure for evaluator), managing and evaluation of the evaluations, • increasing the evaluation capacity, • presentation and promotion of the evaluation outcomes, including their practical use, • presentation of the evaluation outcomes and evaluation of the evaluation plan to the Monitoring Committee of ROP and the Monitoring Committee of NSRR, • coordination of thespecial Opponent Group, • cooperation with the NSRR Evaluation Unit and other evaluation departments. A special Opponent Group has been set up to aid in the successful carrying out of evaluations and fulfilling goals of evaluation projects. This group fulfills the task of expert overseer for the realization of the evaluation project. Group members are chosen according to the partnership principle, in such a way that the groups contain various viewpoints (e.g., participation of partners from areas involved with the structural interventions which are the subject of evaluation). At the same time, members take part in the definition of goals of the evaluation projects, transfer information about the needs of target groups and provide reciprocal ties to evaluation output.

Other cooperating evaluation entities are:

• NOK - The NSRR Evaluation Unit which fulfils the task of consulting, coordinating and playing opponent for NSRR framework evaluation activities. An important area of its activity is cooperation with other evaluation workplaces: sharing information, providing methodological support, mutual comments on important output materials.

• Monitoring Committee ROP „Northeast“,

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• European Commission, • External evaluators. External evaluators – enactors of evaluation activities must be according to the General Regulation (Art. 47, point 3) independent. This requirement for the independence of evaluators is reflected in the means by which evaluation projects are assigned and carried out. Evaluators are external, independent specialist firms. The choice of evaluators for an evaluation project is subject to a thorough selection process with an emphasis on the expertise and experience of the evaluator.

ROP evaluation activities for the 2007-2013 programming period are defined in the ROP Evaluation Plan which is based upon the NSRR evaluation plan, on the analysis of potential weak locations in the region and on ex-ante evaluation. Evaluation activity of ROP „Northeast“ will be based on the following principles: • Factualness: evaluation of concrete contributions of interventions to NUTS II Northeast regional development, • Efficiency: evaluation of whether financial and operational goals set out are being fulfilled, • Effectiveness: evaluation of costs sacrificed for the opportunity (alternative costs), invested costs, i.e., whether the possibility exists to use these sources in a better way, evaluation of intervention effectiveness, • Impact: evaluation of progress achieved and changes in the region, which originated as a result of ROP „Northeast“ implementation,

Aside from goals resulting from general regulation, evaluations seek to achieve strategic goals and NSRR priority axes. They may be strategic (conceptual) are operational in character (supporting monitoring): • Strategic evaluation – evaluation with a goal of assessing development of the program in relationship to priorities of the Community and member state, • Operational evaluation – evaluation of program implementation (identification of weak points of implementation and monitoring system), evaluation of achievement of planned goals including fulfilment of indicators in individual target areas.

In accord with Article 48 General Regulation provides for: • prior evaluation (ex-ante) - for optimizing sources and enhancing the quality of programming document preparation, • evaluation during the course of the implementation period, o based on immediate need (ad-hoc) in connection with the findings of the monitoring system (deviation from target, requirements resulting from oversight), o on-going - may be carried out by a member state (or Managing Authority) and also by the European Commission in the course of program implementation, see Article 48 and 49 of the General Regulations, o overall strategic report in keeping with Article 29 Par. 2 of the General Regulations, • evaluation upon conclusion (ex-post) of the implementation period undertaken by the European Commission in tight cooperation with the state and ŘO.

Evaluation is closely connected and tied to monitoring. Evaluation and the undertaking of evaluation studies are based upon data and information which are obtained within the framework of monitoring. If negative deviations are identified within the framework of monitoring, the evaluation workplace will react flexibly by writing up an ad hoc evaluation study. Monitoring simultaneously brings feedback in the form of conclusions and recommendations of evaluation studies based upon which its focus and direction are set. Evaluation and monitoring are therefore closely interrelated activities.

Ex-ante evaluation ROP „Northeast“

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The course of ex-ante evaluation and the consultation process The Managing Authority, in keeping with Article 48 of the General Regulations, provides an ex-ante evaluation of the program which is aimed at optimizing the allocation of budget resources within the framework of the ROP „Northeast“ and at improving program quality. Differences, gaps and potential development will be assessed as well as goals which are to be reached, expected results, quantified targets, potentially strategy cohesion, the extent to which Community priorities have been taken into account, experience gained from prior programming and the quality of approaches to provision, monitoring, evaluation and financial management. Ex-ante evaluation of ROP „Northeast“ has been undertaken by the company Finespa CZ, s.r.o., which was chosen for ex-ante evaluation in the framework of proper selection procedures. Evaluation took place in two phases. The first phase consisted of running commentary of portions of ROP „Northeast“ which had already been worked upon and the formulation of recommendations. This phase then took place in parallel with ROP „Northeast“ preparations. The second phase consisted of working out the final conclusions of evaluators about the programming document as a whole, including their opinion as to the extent to which ideas and recommendations given to evaluators were incorporated. A complete set of reports on the ex-ante evaluation are available at the Office of the Regional Council of the Northeast Cohesion region. An electronic version of the final report summary was sent to the EC. There were a total of two ongoing evaluations of the analytic portions of the document and three ongoing evaluations of proposed sections. Even as the ROP „Northeast“ was being worked out, the Preliminary Final Report was presented, which then served as the basis for the Final Report and Summary of the Ex-Ante Evaluation. The RPS MMR Department organized coordination meetings for the evaluator for the purpose of discussions concerning the methodology of the ex-ante evaluations and the requirements for unified evaluation structure. The evaluator participated at regular ROP team meetings (members of the team included the program holder, designer and the SEA evaluator). The evaluator was also invited to meetings of individual theme working groups, composed of representatives of regions, municipalities, the private sector and non-profit organizations on the partnership principle. Partners have the option of repeatedly acquainting themselves with versions of the document and making comments concerning it. Materials were always sent before group meetings. Individual comments are part of the record of the meeting of workgroups. These comments were then dealt with by the ROP „Northeast“ designer. The consultation process was completely successful.

Ongoing conclusions of the ex-ante evaluation Within the framework of the heretofore employed evaluation, evaluators consider the Regional Operation Program as presented to be a document of satisfactory quality which is capable of being presented to the approval process. It is, however, necessary to stress that it will require further specification and supplementation. The analytic portion is acceptable in principle and, in contrast to the original commented version, the socioeconomic analysis and SWOT analysis were greatly improved. Nevertheless they're still comments which are yet to be dealt with. From a formal standpoint, it is possible to recommend further reduction in the analytic portion or, potentially, leaving out repetition of the conclusions from the analytical portion in the proposal section. The evaluator also recommends, as a way of making use of the experience from the current programming period, incorporating the most important conclusions from the ongoing SROP evaluation, including the proposal for their use in designing programs for the new programming period. The strategy is relatively concise, but as opposed to the original proposal as presented, has been modified on the basis of recommendations from the ex-ante evaluator. The decided insufficiencies in the original strategy lay in inadequate ties to analytic sections and unsuitable and sometimes misleading determination and formulation of goals. For more advantageous determination of goals, the project initiator was recommended to utilize a problem tree, which is well elaborated in the ROP „Northeast“ framework.

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The focus of strategy is based upon the thematic interface between individual OPs and reflects the division of competencies between individual levels of public administration. On the general level, strategy reacts to problems identified in the course of the analytic phase of document preparation. Nevertheless it is necessary to state that in some individual sections, the ties between analytical and strategic portions remain relatively weak. The overall goal was reformulated based upon foregoing recommendations by the evaluator and the current goal is precise and adequately emphasizes the target state. Strategic goals are formally as well as factually well set out and explained, reflecting actual possibilities for the region to influence its socioeconomic development and at the same time enable progress to be measured in fulfilling those goals. The determination of priority axes achieves very good quality and to a great extent takes into account prior comments of the ex-ante evaluator. The ex-ante evaluator would appreciate in the description of priority axes more detail and less formal description of causal relationships, in particular the influence of intervention. The evaluator appreciates sections touching upon reasons for public intervention into the proposed areas. The priority axes proposal is in accordance with national and community policies and documents (SOZS, Lisbon strategy, NSRR, National Reform Program) as well as with the programming document of the regions. In the presented document overlaps between interventions of other operational programmes and the Programme for Rural Development financed by EAFRD have not been entirely resolved yet. The Ex- ante evaluator is, however, of the opinion that the final solution of these overlaps is partially outside the competence of the holder of the ROP „Northeast“. The ROP „Northeast“ proposal as presented does not contain a justification for financial allocation for individual priority axes and determination of expected financial allocations to individual support areas, which partially stands in the way of comprehensive program evaluation, especially as concerns program impact. In spite of the absence of detailed financial plans, it may be said that intervention is still of a scattered character. In defining priority axes and areas of support, the approach is not sufficiently strategic, thematically selective and territorially concentrated, which may influence the impact of the program on the territory to a great extent.

Viewpoint of the ex-ante evaluator In spite of the fact that the evaluation of the text is critical in places, the evaluator stressed that ROP NUTS II Northeast has reacted to all substantial comments by the evaluators and presented a methodically correct and factually balanced document which contains all important elements for documents of type OP.

After presenting the Final Report of the Ex-Ante Evaluation of the ROP „Northeast“ to the initiator, all comments of the ex-ante evaluator were discussed and meetings of working groups with all partners participating in the preparation of the ROP „Northeast“ and the ROP team. Results of these meetings were then incorporated into the ROP „Northeast“ programming document.

Evaluation of ROP „Northeast“ by SEA A. Evaluation Course Within the meaning of Act No. 100/2001 Coll., on Environmental Impact Assessment, as amended by Act no. 93/2004 Coll. (hereinafter “Act No. 100/2001 Coll.”), the ROP „Northeast“ shall be subject to a procedure evaluating the impact of its conceptions on the environment and public health (so-called SEA – Strategic Environmental Analysis). This procedure was in compliance with the requirements of the above-quoted Act. The evaluation was elaborated by: RNDr. Petr Anděl, CSc. (EVERNIA s.r.o., Liberec) and Ing. Jana Svobodová (Integra Consulting Services s.r.o., Prague). The Notice of Conception, developed within the scope of Schedule No. 7 to Act No. 100/82001 Coll., was submitted to the MŽP on 7.3. 2006. On 13.3. 2006, the Notice of Conception was circulated to the administration bodies and local government territorial units concerned and published in the SEA

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Information System. A declaratory procedure was initiated on 27.3. 2006 by posting the information about the Notice of Conception on the Liberec-Region Authority Office Board. The declaratory procedure was closed on 26.4. 2006 by issuing a conclusion of the declaratory procedure. The draft conception, including an environmental impact assessment, drawn up within the scope of Schedule No. 9 of Act No. 100/2001 Coll., was submitted to the MŽP on 23.8. 2006 and, following a check of the essentials on 29.8. 2006, published in the SEA Information System and circulated to the administration bodies and local government territorial units concerned. The public discussion on the draft conception, including an assessment of the conception’s environmental impact, was held on 25.9. 2006 in the Regional Authority building of the Hradec-Králové-Region (Regional Assembly Hall, 2nd floor), seated at Wonkova 1142, 500 02 Hradec Králové. Minutes of the public discussion were received by the MŽP on 26.9. 2006. Informing the public26 and involved bodies on procedures during writing up of the ROP „Northeast“ document and its evaluation from a natural environment and public health impact point of view (in accordance with Article 6, Directive 2001/42) was carried out using web pages and regular invitations for submitting comments or participation in public discussions concerning the draft versions of ROP „Northeast“ or participation in public discussions on evaluating the impact of ROP „Northeast“ on the natural environment and public health. An overview of comments obtained and the method of responding to them is contained in chapter SEA O. (O.1, Overall Response of Concepts Received from the Standpoint of Influences on the Natural Environment and Public Health, and O.2, Conclusions of Exploratory Proceedings). Evaluation of all opinions received in comments on the proposed concepts and its evaluation are, at the same time, made public on the web pages of RR Northeast at (www.rada-severovychod.cz). Documentation relating to the processing of evaluations of the influence of ROP NUTS II Northeast on the natural environment are available to the broader public in the SEA Information System managed by MŽP ČR at http://eia.cenia.cz/sea/koncepce/detail.php?id=MZP027K

B. Evaluation Methodology and Outputs The assessment of the ROP „Northeast“’s environmental impact was performed in compliance with Act No. 100/2001 Coll., Schedule No. 9 thereof. The assessment was carried out as the conception was drafted and recommendations of the SEA authors continuously incorporated in the conception. For the assessment, a reference goal method was used, i.e. a comparison of potential impacts of the ROP „Northeast“’s Areas of Intervention on the reference goals set for environmental protection and public health. The elementary effort also included an assessment of impacts on individual environmental components. The methodology for elaborating SEA’s of the ROP „Northeast“ is based on SEA methodology of the National Development Plan. Environmental protection reference goals for assessing the ROP „Northeast“’s impact on the environment are defined on the basis of a set of SEA reference goals of the National Development Plan for 2007-2013 and goals of the relevant strategic documents related to environmental and public health issues at international, national and regional levels. When assessing environmental impacts, not just the direct impacts but also any indirect, cumulative and synergic impacts are identified. A special emphasis within SEA is laid on establishing a system of indicators and environmental criteria for the selection of projects and a proposal for their inclusion in a system for evaluating and selecting projects submitted for support under the ROP „Northeast“. The implementation of this system should ensure that no projects with substantial negative environmental impacts are selected. The ROP „Northeast“ indicators of environmental impact are defined on the basis of environmental protection reference goals, i.e. their monitoring will make it possible to evaluate whether or not the set targets are being met. The definition of indicators is based on SEA indicators for the National Development Plan, as well as indicators of the National Indicator Code List for the NDP. The NDP SEA defines obligatory indicators to be used when indicators for the SEA of operational programmes are being defined. Another part of the ROP N-E’s assessment was the consideration under Sec. 45i of Act No. 114/1992 Coll., on Environmental and Landscape Protection (hereinafter also “Act No. 114/1992 Coll.”), as

26 Public discussion lately took place in August 30 th, 2007. MA ROP Northeast adressed the wide public and namely sent invitations to the representatives of municipalities, microregions, and nonprofit organizations, which are involved in enforcing equal opportunities and sustainable development. Record of the public discussion including coping with all the remarks risen was sent to all participants and is also published on the web pages of the Northeast Regional Council.

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subsequently amended, in terms of its impacts on the European-significant sites and Important Bird Areas and the state of their preservation in terms of Sec. 45h of Act No. 114/1992 Coll. European Parliament and Council Directive 2001/42/ES dated 27.6. 2001 concerning the evaluation of impact of some plans and programs on the natural environment has been incorporated into the Czech legal code as Law no. 100/2001 Sb., concerning impacts on the natural environment and changes to some related laws. SEA evaluation of all ROPs has been carried out in accordance with this law and thus corresponds to Direcitve 2001/42/ES. SEA evaluation of individual ROPs are made available at http://eia.cenia.cz/sea/koncepce/detail.php?id=MZP027K

C. Opinion of the Ministry of Environment Acting as the competent body under Sec. 21 of Act No. 100/2001 Coll., the Ministry of Environment, on the basis of the draft conception, the integral part of which includes an assessment performed by the conception evaluator under Act No. 100/2001 Coll., including a conception evaluation under Sec. 45i of Act No. 114/1992 Coll., of the opinions provided thereon, and of the public discussion, issued on October 18, 2006 an approving opinion on the draft conception “Regional Operational Programme NUTS II Northeast”, assuming compliance with the conditions provided in the opinion. Announcement in the sense of Article 9 (1)(b) of Directive 2001/42 is contained in the response to the Opinion of the MŽP ČR.

A. Response to the positive opinion of the MŽP: ŘO ROP „Northeast“:

1) Within the framework of the overall system of monitoring of the impact of implementation of the ROP „Northeast“ it will monitor the impact on the natural environment.

Within the framework of the overall system of monitoring the impact of the implementation of the ROP „Northeast“, "Exposure of population to PM10 in excess of limits" was added to the set of indicators. This measure follows the evaluation system and choice of project and makes use of environmental criteria.

2) It will take into consideration the question of the natural environment in the framework of the entire system of evaluation and choice of projects.

Whether the project has a negative impact on the natural environment is evaluated as early as the selection process. In such a case, the project is unacceptable from the standpoint of acceptability criteria. Every project is subsequently evaluated and awarded points, taking into consideration its relation to the natural environment. Within the framework of the entire system of monitoring the impact of implementing the ROP „Northeast“, the "Exposure of population to PM10 in excess of limits" indicator has been incorporated into the indicator set.

3) It will take into consideration the proposed measures for decreasing the potential negative impacts of individual projects on the natural environment and public health in the course of project realization. This means making use of these measures in determining the conditions for project realization for obtaining a subsidy within the framework of ROP „Northeast“.

The system of choice and evaluation is set in such a way that no project is allowed to have a negative impact on the environment, since this would be unacceptable. Further, the project’s relationship to the natural environment is taken into consideration when each is evaluated and awarded points.

4) In preparing individual projects, it is necessary to respect above all protected areas, their protection conditions and plans for caring for them. In assessing concrete projects, it is also necessary to respect localities in which protected species of plants or wildlife are present. It is also necessary to involve the appropriate bodies for the protection of the environment and countryside in the subsequent choice of concrete projects.

This issue is taken into consideration in assessing projects from the outset. In turning in an application, it is necessary to include the obligatory attachment containing the opinion of the relevant bodies

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(Department of Environmental Protection of the corresponding regional authority) as to whether the project has a negative impact on the natural environment.

5) It is necessary to set out environmental criteria for the evaluation and choice of projects whose use would provide for the realization of projects within the framework of individual ROP „Northeast“ measures. Supported projects are not permitted to have significant negative impacts on the environment and the countryside.

These criteria are established and are monitored within the sustainable development. Projects will be subsequently evaluated from the point of view of their contribution to the sustainable development.

6) In selecting projects it is necessary to observe whether the following occur in connection with realization of the project: - violation of protection conditions of specially protected areas, - violation of territorial protection and integrity of Natura 2000 (significant European localities and bird regions), - damage or liquidation of biotopes with the appearance of specially protected species of plants and wildlife, - interference into ÚSES and VKP elements, negative influence on natural stations, biotopes, flora and fauna, - increased fragmentation of the countryside, decreased freedom of movement in the countryside.

This issue is taken into account in assessing projects from the outset. In turning in an application, it is necessary to include the obligatory attachment containing the opinion of the relevant bodies (Department of Environmental Protection of the corresponding regional authority) as to whether the project has a negative impact on the natural environment. The points mentioned have been evaluated in this opinion.

7) We require the incorporation of activities concerning the elimination of the impact of transportation in city clusters into the ROP „Northeast“ proposal, namely into the Support Area "Support of Projects Improving Transportation Serviceability of the Territory", i.e., activities consisting of: - purchase and reconstruction of mass transit vehicles and technical assistance vehicles with alternative fuels (including building the accompanying infrastructure, i.e., natural gas filling stations, exchangers for trolley buses, etc.), - acquiring dust filters for diesel motors for mass transit vehicles, technical assistance vehicles and public administration vehicles.

These activities form part of Priority Access 1, support area 1.2 "Support of Projects Improving Transportation Serviceability of the Territory". 8) In the chapter "Indicators for Monitoring and Evaluation", we require that the impact of indicator "Exposure of population to PM10 in excess of limits" is heeded from an air-quality point of view at the program level.

Within the framework of the overall system of monitoring the impact of ROP „Northeast“ implementation, both required indicators were incorporated into the indicator set.

9) In the priority access indicators, we require at the Development of Transportation Infrastructure priority access level to monitor the impact and result indicators in accordance with the current Environment Operational Programme for the 2007 – 2013 period, priority axis 2. This concerns the following indicators: -Exposure of population to PM10 in excess of limits; -Lowering emissions of primary particles and precursor secondary particles.

Both indicators were also integrated into the overall system of monitoring ROP „Northeast“ implementation impacts.

10) We require that the following comment be included in the ROP „Northeast“ proposal, in the subchapter "Tasks of the Beneficiary, Project Selection System": those projects contained in local and regional programs for the improvement of air-quality in accord with Law no. 86/2002 of the legal code concerning air protection in its current version will be given preference for support.

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The particulars of the selection criteria system treat this issue. Selection criteria will be approved by the Monitoring Committee.

11) We recommend incorporating indicators for evaluating the impact on health recommended in the opinion of the Regional Hygienic Station of the Pardubice Region.

Representatives of the Regional Hygienic Station were involved in the working group creating and commenting on the ROP „Northeast“. The Regional Hygienic Station did not object to ROP „Northeast“.

12) The initiator of the concept will make public opinions and comments concerning the outline of the concept as well as its evaluation on its web pages.

This evaluation is made public on the Internet pages of RR SV at www.rada-severovychod.cz.

Declaration pursuant to Article 9(1)(a,b) of the Regulation 2001/42 in connection to the settlement of the positive opinion of MZP. In relation to Article 9, awareness and consultations with relevant authorities (Art. 6, (3)), public, and a member state are assured within ROP “Northeast”.

The interim versions and the final version of the ROP “Northeast” are available on the web pages of the Northeast Regional Council, www.rada-severovychod.cz, and the course of assessement of the programme and its influence on the natural environment is publicly available in the SEA Information System.

The whole process of the SEA evaluation has been consulted with the relevant authorities of the member state, as well as the public. The inquiry proceedings were done and the proposal of the concept was suggested to the Ministry of Environment. The Ministry of Environment gave its own standpoint to it (see above), which is respected and has been properly incorporated to the ROP “Northeast”.

During the whole process of the SEA evaluation comments of public and the relevant authorities on the concept in the light of impacts on environment and public health were collected and settled. Comments have been taken maximally in consideration and their enumeration including their settlement is summarized in the SEA documentation (chapter P). 72 comments out of total 93 were fully incorporated and 7 of them partly incorporated. 14 comments were not accepted for their irrelevancy.

The final version of the SEA documentation, conclusion of the inquiry proceeding, and the approving standpoint of the Ministry of Environment are available in the SEA Information System and the web pages of the Northeast Regional Council.

ROP „Northeast“ pays maximum attention to aspects of the natural environment in the territory and, by recommending activities, aims to improve the quality not only of features of the natural environment but public health in the territory of NUTS II SV.

Cross-border influences from a natural environment standpoint and a public health standpoint were not identified in ROP „Northeast“.

The final ROP „Northeast“ text, along with modified conclusions and results of the process of evaluating its influence on the natural environment and public health, was submitted for approval.

MA ROP Northeast is obliged to ensure monitoring of influences of the programme on natural environment and public health. Area of natural environment is to be taken in consideration within the overall assessment and project selection; influences of all activities performed within ROP „Northeast“ shall be properly monitored and evaluated .

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Conditions for positive opinion from the standpoint of influence on the Natura 2000 locality system:

Concrete projects supported within the framework of the ROP „Northeast“ V must respect territorial protection in the integrity of important European localities and bird regions under Natura 2000 and may not lead to damage or worsening of the state of subjects protected on this territory.

This issue is taken into account in assessing projects from the outset. In turning in an application, it is necessary to include the obligatory attachment containing the opinion of the relevant bodies (Department of Environmental Protection of the corresponding regional authority) as to whether the project has a negative impact on the natural environment. In the framework of this opinion the above mentioned points have been taken into account.

D. Monitoring the influence of ROP „Northeast“ on the natural environment The monitoring process, in accordance with Art. 9(1)(c) and 10 of Directive 2001/42 for ROP „Northeast“ draws on SEA (Chapter J, Determination of Monitoring Indicators of Influence of the Concept on the Natural Environment and Chapter L, Determination of Indicators (criteria) for choice of the project) and is closely described in Chapter 5.13 Horizontal Themes. This process reflects the demands contained in the Opinion of the MŽP ČR (especially points 1 -3) of this opinion). E. Conclusions

A nontechnical summary of the information made available in the environmental report in accordance with Annex I (j), of Directive 2001/42 is contained in Chapter SEA N, Nontechnical Summary of Information. Nontechnical Summary makes Annex 10.3.

The author of the SEA assessment observes that environmental protection within the ROP „Northeast“ is treated as a basic horizontal theme, being included in all Priority Axes of the ROP „Northeast“. At the level of the Priority Axes, Specific targets, Areas of Intervention and activities, no facts were found, leading by definition to substantial negative impacts on the environment and public health. A crucial point in this respect will be the implementation phase and the specific project selection and solution.

The MŽP issued an approving opinion on the conception and its conditions have been accepted. 8.7 Promotion

Under Article 69 of the General Regulation, adequate information and promotion measures are to be taken in connection with the OP, focusing on increasing public awareness about the OP and EU activities. Such promotion shall be a responsibility of the Managing Authority, ensuring in particular the awareness: • of prospective support Beneficiaries, economic and social partners, entities advocating equality of men and women, and appropriate non-governmental organisations, about opportunities which the offered assistance brings; • of the wide public, about the Community role in providing assistance through the ERDF and CF, as well as about the eventual results of such assistance.

Picture No 26: Implementation Scheme

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Picture No 27. Organizational structure of theOffice of the Northeast Regional Council

NUTS II Northeast

Picture No 28. Functional division scheme (Managing Authority, Certification Body, Audit Body)

Cohesion Region NUTS II Northeast

9 ROP „Northeast“ Funding

The Regional Operational Programme Northeast will be financed solely from the European Regional Development Fund. The Financial Plan for the Regional Operational Programme N-E is developed on the basis of fund allocation under the Convergence Goal defined in the National Development Plan of the Czech Republic for 2007-2013. Financial allocations from structural funds of the European Union to the Regional Operational Programme Northeast are based on an updated material of MMR, Ref. No. 36308/2006-21, “European Resources in 2007-2013”, dated 5.10. 2006, where an allocation to the amount of 18% of the total allocations considered for the Czech Republic in the new programming period was appropriated to Regional Operational Programmes. In value terms, the amount reaches 4 659.0 mil EUR. At its meeting of 9.6. 2006, the Association of Regions of the Czech Republic decided on allocating 18% of the total allocations intended for each Cohesion Region to all the ROP’s. The allocation of this amount to each year of the period 2007-2013 and the individual priority axis of the Regional Operational Programme Northeast are contained in the following financial tables In keeping with Article 37 of Council Regulation, the ROP „Northeast“ contains only information at the level of priority axes. A more detailed description of financial sources including co-finance of projects/beneficiaries is included in the operating document.

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Table No 30. Financial allocation EU funds for ROP „Northeast“ by year and fund

ROP „Northeast“ Allocation by Year and Fund (EUR, Common Prices)

Structural Cohesion Funds (ERDF) Fund Total 1 2 3=1+2 2007 81,448,769 81,448,769 2008 85,455,123 85,455,123 2009 89,478,991 89,478,991 2010 93,691,019 93,691,019 2011 97,904,969 97,904,969 2012 102,103,603 102,103,603 2013 106,375,132 106,375,132 Total 2007-2013 656,457,606 0 656,457,606

Cohesion Region NUTS II Northeast

Table No 31: Financial sources by Priority Axes ROP „Northeast“

ROP „Northeast“ Priority Axes by Financial Resource (EUR, Common Prices)

Indicative Allocation of National Level of Fund/Level Community National Resources Total Priority Co- For Information of Co- Contribution Resources National National Resources Axis Priority Axis Name Allocation financing financing Public Private Number Share Related to Funds Funds a b(=c+d) c d d=a+b e=a/d EIB Other Resources

1 Development of Transport Infrastructure ERDF/Public 37% 242,889,314 42,862,819 42,862,819 0 285,752,133 85% 19,288,269

2 Development of Urban and Rural Areas ERDF/Public 34% 223,195,587 39,387,457 39,387,457 0 262,583,044 85% 2,201,454

3 Tourism ERDF/Public 22% 144,420,673 25,486,004 25,486,004 0 169,906,677 85% 57,312,723

4 Development of Entrepreneurial Environment ERDF/Public 4% 26,258,304 4,633,819 4,633,819 0 30,892,123 85% 7,500,756

5 Technical Assistance ERDF/Public 3% 19,693,728 3,475,364 3,475,364 0 23,169,092 85% 0 Total 100% 656,457,606 115,845,463 115,845,463 0 772,303,069 85% 0 86,303,202

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10 Annexes

10.1 Annex No. 1: List of Cities by Areas of Intervention under Priority Axis 2

Table No 32: The list of cities by areas of intervention under Priority Axis 2 Area of Intervention 2.1: Development of Regional Centres This Area of Intervention is intended for cities with a population over 50,000 as at 1.1. 2006 according to ČSÚ data.

City Population as at 1.1. 2006 Region City LBK Liberec 97,950 KHK Hradec Králové 94,431 PK Pardubice 88,260

Area of Intervention 2.2: Urban Development This Area of Intervention is intended for cities with a population over 5,000 as at 1.1. 2006 according to ČSÚ data.

City Population as at 1.1.2006 Region City LBK Jablonec nad Nisou 44,748 LBK Česká Lípa 38,489 KHK Trutnov 31,195 PK Chrudim 23,385 KHK Náchod 21,079 PK Svitavy 17,248 PK Česká Třebová 16,533 KHK Jičín 16,253 KHK Dvůr Králové nad Labem 16,111 PK Ústí nad Orlicí 14,918 LBK Turnov 14,489 KHK Vrchlabí 13,065 KHK Jaroměř 12,767 PK Vysoké Mýto 12,432 LBK Nový Bor 12,192 KHK Rychnov nad Kněžnou 11,672 PK Moravská Třebová 11,251 PK Hlinsko 10,295 PK Litomyšl 10,118 KHK Nové Město nad Metují 10,054 PK Lanškroun 9,807 KHK Nová Paka 9,263 PK Polička 9,029 PK Choceň 8,953 LBK Semily 8,924 KHK Hořice 8,811 PK Přelouč 8,467 KHK Červený Kostelec 8,419 KHK Broumov 8,136 LBK Frýdlant 7,500

Cohesion Region NUTS II Northeast

LBK Hrádek nad Nisou 7,358 KHK Nový Bydžov 7,126 KHK Dobruška 7,033 LBK Tanvald 6,966 LBK Mimoň 6,742 KHK Hronov 6,488 LBK Železný Brod 6,409 KHK Týniště nad Orlicí 6,303 PK Holice 6,298 PK Letohrad 6,202 KHK Kostelec nad Orlicí 6,159 LBK Chrastava 6,038 PK Žamberk 6,017 KHK Úpice 5,927 LBK Lomnice nad Popelkou 5,896 KHK Třebechovice pod Orebem 5,796 LBK Jilemnice 5,710 KHK Česká Skalice 5,429 KHK Chlumec nad Cidlinou 5,313 PK Skuteč 5,304 LBK Doksy 5,103

10.2 Annex No. 2: Indicative breakdown of the Community contribution by category in the ROP Nuts II Northeast

Table No 33: Financial expenses ROP „Northeast“ by category 1 2 3 Priority Axis 1 Form of finance Territory Code Amount Code Amount Code Amount * ** * ** * ** 01 242 889 314 01 206 455 917 18 25 712 305 05 36 433 397 23 147 878 054 24 10 482 320 25 21 860 038

28 6 358 214 29 12 144 466 52 18 453 917 Total 242 889 314 Total 242 889 314 Total 242 889 314

1 2 3 Priority Axis 2 Form of finance Territory Code Amount Code Amount Code Amount * ** * ** * ** 61 87 051 270 01 223 195 587 01 178 556 470 75 50 589 335 05 44 639 117 76 21 573 909

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79 59 517 159 80 4 463 914 Total 223 195 587 Total 223 195 587 Total 223 195 587

1 2 3 Priority Axis 3 Form of finance Territory Code Amount Code Amount Code Amount * ** * ** * ** 24 2 888 413 01 144 420 673 01 101 094 471 55 8 665 240 05 43 326 202 56 11 553 654 57 103 982 885 58 17 330 481 Total 144 420 673 Total 144 420 673 Total 144 420 673

1 2 3 Priority Axis 4 Form of finance Territory Code Amount Code Amount Code Amount * ** * ** * ** 03 1 050 332 01 26 258 304 01 19 693 728 05 3 938 746 05 6 564 576 08 9 452 989 09 525 166 50 5 776 826 68 2 625 830 72 1 050 332 75 1 838 083 Total 26 258 304 Total 26 258 304 Total 26 258 304

1 2 3 Priority Axis 5 Form of finance Territory Code Amount Code Amount Code Amount * ** * ** * ** 85 14 770 296 01 19 693 728 00 19 693 728 86 4 923 432 Total 19 693 728 Total 19 693 728 Total 19 693 728

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10.3 Annex No. 3: A non-technical summary of the information given in the report on environmental conditions according to Annex l(j) of the Regulation 2001/42/ES

Introduction (1) As a part of the system of operational programmes of the Czech Republic the ROP „Northeast“ contributes by means of public interventions to the sustainable development in line with the Strategy of Sustainable Development of the Czech Republic. ROP „Northeast“ tackles the issue of economic, social and territorial differences by strengthening economic growth, competitiveness and employment, social inclusion, environment protection and quality. Strategic objectives and priorities, and the areas of intervention of ROP „Northeast“ as tools of public intervention are formulated so that they hold down as much as possible the imbalance in mutual relations between the economic, environmental and social pillars of sustainability. All priorities of ROP „Northeast“ fulfil with their thematic orientation 3 pillars of the sustainable development in the region. Identification data (2) Submitted by: Regional Authority of the Liberecký, Pardubický kraj and the Královéhradecký kraj (NUTS II Northeast). Evaluators of the ROP NUTS II Northeast impacts on environment: RNDr. Petr Anděl, CSc., EVERNIA s.r.o. Liberec, Ing. Jana Svobodová, Integra Consulting Services s.r.o. Praha. Authority competent to issue the statement pursuant to the quoted Act of Law: Ministry of Environment of the Czech Republic, Department for the assessment of environmental impacts and IPPC. Authority approving the conception and its assessment in terms of environmental impacts is the Regional Council of the Liberecký, Pardubický kraj and the Královéhradecký kraj. Contents and objectives of the conception and its relation to other conceptions (3) In the submitted version, the Regional operational programme of the region NUTS II Northeast is focused on global objective, strategic objectives and priorities of the National Development Plan of the Czech Republic for 2007-2013. The ROP content focus is formulated with respect to the thematic focus of other operational programmes and assertion of the principle of subsidiarity and thereof derived competence prerequisites and dispositions relating to the development of the territory. Priorities and areas of intervention of the Regional operational programme will be modified and precised in line with the results of negotiations between resorts and regions concerning the precise demarcation of "boundaries" between the thematic operational programmes and the regional operational programmes. (4) Entirely essential for the creation of the Regional operational programme are three strategic documents: Community Strategic Guidelines (EU), National Development Plan (CR), and the linking National Strategic Reference Framework (CR). The Regional operational programme is consistent with other national strategic documents, viz. Strategy of Sustainable Development, Strategy of Economic Growth, and regional development strategies of the respective krajs constituting the region NUTS II Northeast. Information on the current state of environment in the concerned territory and its presumable development without the implemented conception (5) The assessment followed out from groundwork documents elaborated during the preparation of ROP NUTS II NE in which fundamental categories of protection were mapped for the individual environment constituents. The assessment splits into the following sections: (i) air and climate, (ii) water, (iii) soil, (iv) rock environment and nature resources, (v) flora and fauna, (vi) ecosystems, (vii) landscape character, (viii) population. (6) The impact of ROP on NATURA 2000 localities was evaluated in a separate report whose author is Prof.RNDr. Vladimír Bejček, CSc. The evaluation constitutes a separate attachment to the SEA documentation. (7) It is to be stated that the initial condition of environment in the concerned region does not represent an essentially limiting obstacle for the realization of the proposed priority axes and areas of support stipulated in ROP. Projects to be implemented within ROP will be those focused directly on environment conservation, in which a possible non-implementation of the ROP would lead either to the stagnation of the currently unsatisfactory state, or even to its further worsening and in other projects with certain negative impacts on environment a conclusive question will be the measure of these impacts in relation to general legislation and local conditions. These impacts have to be evaluated in detail within the assessment of the

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impact of conceptions on the environment including a proposal for minimization and compensation measures. All current problems of environment relevant to the conception, especially those relating to areas of particular significance for the environment (e.g. areas requiring protection according to special legal regulations) (8) This part brings the assessment of a possible impact of potential intentions realized within some of the 5 priority axes on the individual constituents of environment. Regarding the fact that concrete plans are not known at the present, the assessment is made at a general level in the form of possible risks and limits. A detailed evaluation can be found in Chapter D.2 Evaluation of the impacts of ROP NUTS II NE on individual constituents of the environment. (9) Air and climate. In general terms, one of dominant sources of air pollution is transport. Priority axis 1: Development of transport infrastructure includes construction of circumferential highways in towns, building of speed-highways to increase transport passability in the region, support to the construction of backbone communications in the region and optimization of transport serviceability, which should result in smoother traffic, diversion of transport outside town centres and a greater use of public transport, which should favourably affect air pollution situation in the region. (10) Similarly as the development of entrepreneurial environment, the development of urban and rural areas will have a positive influence on air quality in support and development of central heat supply and construction of industrial zones outside built-up areas. Which will however again increase transport; this is why a qualitative transport connection is recommended of these zones by public transport. (11) Support to tourism will reflect in air quality namely by increased emissions from traffic. Therefore, a support is focused onto construction of parking capacities in tourist centres, promotion of mass transportation to attractive localities from the retaining car parks, which should lead to reduced individual transportation in tourist localities and hence to reduced air pollution load. (12) Water. Any new construction may in general terms adversely impact surface and underground water. The construction of new linear elements in the landscape often features crossing of water courses or water surfaces, which has to be resolved through technical measures (example: bridges, tube and slab culverts). In the case of extensive ground shaping it is also necessary to evaluate the impact of the planned project on ground water, its extent and effects, and possible measures for abatement of the negative phenomena. (13) Positive influence on water is expected from sewage water treatment and from the recultivation of industrial sites and contaminated soil under Priority axis 2: Development of urban and rural settlements. Under this priority it is possible to aid the construction of sewerage systems and sewage water treatment plants, which is to lead to enhanced quality of both surface and ground water. Regeneration and revitalization of uncared, damaged, improperly used and neglected sites and objects will markedly reduce the risk of ground water contamination. (14) Soils: Based on the SWOT analysis and the set-up priorities (indicators), the preference of railway, water and air transport can be appreciated with respect to large-scale soil protection. The draft projects foresee a lower pressure on land appropriation and potential deterioration of its quality (contamination, loss of biodiversity). Positive is also the use of old unused sites (brownfields) which are a potential source of soil contamination. (15) On the other hand, negative impact may have the specific objectives "enhancement of the condition of regional road transport infrastructure and optimization of transport serviceability in the region" as well as the development of transport infrastructure (absence of motorways and speedways and hence overloaded existing communication network) that may increase pressure on appropriation of particularly qualitative farmland. The persisting air-pollution load from traffic and industries (even point sources) may potentially contaminate soil resources with all possible negative impacts on human health and ecosystems. (16) Rock environment and nature resources. At the stage of construction any new structure represents a certain intervention into rock environment; ground shaping and earth moving works may negatively effect both the rock environment and the groundwater table. A positive influence of ROP on rock environment is foreseen in the reduced risk of contamination through regeneration and revitalization of unkept, damaged, improperly used and neglected sites and objects but also in the optimization and enhancement of traffic smoothness, which is to lead to reduced number of accidents and escapes of oil substances which may contaminate the rock environment.

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(17) Flora and fauna. Projects implemented within ROP will affect flora and fauna both at the stage of building various industrial premises, objects of tourism, routes and circumferential highways in towns and villages, and at the stage of their operation. A newly planned route running through the open landscape will nearly always reach at least partly into important botanical or zoological localities with the occurrence of particularly protected plant and animal species. Similarly, the construction of industrial premises, urban and rural infrastructure or infrastructure for tourism can be reaching into these localities. Essential for the significance of the impact on flora and fauna is to select such localities on the basis of biological survey made prior to the construction. (18) At the stage of operation, fauna and flora may be markedly affected by soil and water contamination, air pollution, increased noisiness, in the case of accidents and breakdowns by escaped oil and other toxic substances into the environment. Within the development of transport infrastructure it is necessary to ensure a sufficient amount of park places, catering and accommodation capacities, and to enhance services for tourists also in less visited localities. (19) Ecosystems. Negative impact on ecosystems can be expected in the case of projects focused on the construction of new objects and transport routes which may interfere with some important ecosystems such as elements of the territorial system of ecological stability, particularly protected areas, important landscape elements or localities with the occurrence of particularly protected plant and animal species. Essential for the significance of project impact on ecosystems is the selection of locality based on previous surveys and search study. (20) Positive influence on ecosystems will have the building of integrated transport systems, development of urban mass transportation and enhanced transport serviceability, which should lead to reduced individual transportation and hence to negative phenomena of traffic on adjacent ecosystems. Positive effect on ecosystems is also expected from the regeneration and revitalization of uncared, damaged, improperly used and neglected sites and objects, which will decrease the amount of toxic substances entering the ecosystems. (21) Landscape character. Essential factor in assessing the impact of individual projects on landscape character is the character of the locality in which the project is to be implemented, landscape type, presence of national park, technical parameters of the project and its integration into the landscape. These parameters can be evaluated only in concrete projects, and it is therefore necessary for their implementation within ROP to carry out an assessment of the impact of the structure on the landscape character as early as at a stage of project documentation. (22) Positive influence on landscape character may have projects implemented within the category of the area of support Conservation and development of natural heritage, which contributes to the sustained development and renewal of cultural landscape, conservation of the landscape character and support of environment-friendly forms of agriculture including agrotourism. (23) Population. One of the most significant negative impacts in the development of transport infrastructure, support to industrial activities and development of tourism on the population is increased noisiness. In general terms, one of dominant sources of noise is traffic. Priority axis 1: Development of transport infrastructure includes construction of bypass roads in towns, building of speedways to enhance passability of transport throuth the concerned territory, support to the construction of backbone communications in the region, and optimization of transport serviceability. The measures ought to result in a greater smoothness of traffic, diversion of transport outside municipal centres and in a greater use of mass transportation, which should positively affect noisiness in the region. (24) Development of urban and rural areas –similarly as development of entrepreneurial environment- will have a positive influence in the construction of industrial zones outside built- up areas and hence in the abatement of noise burden on the population in towns and villages. However, this will show in repeated traffic increase, and this is why it is recommended to ensure a qualitative connection of these zones by the means of urban mass transportation. (25) Support to tourism will reflect in the noise situation in the region by increased noise from traffic. Therefore, a support is focused onto construction of parking capacities in tourist centres, promotion of mass transportation to attractive localities from the retaining car parks, which will lead to reduced individual transportation in tourist localities. Objectives of environment protection set up at international, communitary or national level, which relate to the conception, and the way in which the objectives were taken into consideration during its prepartion, namely in the comparison of optional solutions

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(26) Reference objectives of environment protection for ROP „Northeast“ are as follows: 1. to reduce after the end of the first control period of the Protocol the specific CO2 emissions per capita by 30% and the total aggregate CO2 emissions by 25% until the year 2020 as compared with the year 2000, and to continue in the commenced trend until the year 2030; 2.to reach national emission ceilings for sulphur dioxide, nitrogen oxides, volatile organic substances and ammonia before the year 2010, and to reach target values for acidification for human health and for vegetation until the year 2020; 3. to reduce the disposal of emissions and escapes of priority substances, and to stop or gradually eliminate the discharge, emissions and escapes of priority dangerous substances; 4. to reduce appropriation of land; 5. to put restrictions on landscape fragmentation and to ensure protection and regeneration of migration routes, corridors and stops for migrating species; 6. to enhance the retention function of the landscape; 7. to reduce the input of major noxes into the environment and to seek substitute solutions; 8. to reduce the consumption of primary non-renewable resources at an absolute amount of 1% per year, in public sector by 1.5% per year; 9. to stabilize the reduction of energy requirements in GDP creation by 30 per year, requirements of electric energy by 2% per year; 10. to reduce the consumption of mineral raw materials due to structural changes of economy and technical development; 11. to increase the utilization of wastes with preference of recycling at 55% of all generated wastes until the year 2012; 12. to reduce the specific production of dangerous wastes by 20% until 2010 as compared with the year 2000 with expected further decrease; 13. to protect nature elements in built-up areas; 14. to support utilization of brownfields; 15. to promote environment-friendly forms of transport including management measures; 16. to reduce the load with transit and cargo road transport; 17. to reduce the load of population in settlements by noise exposure and noise from industrial operations; 18. to encourage demand and supply of environment-friendly products and thus to stimulate a potential for continual, market-controlled enhancement of the environment. Relevant impacts (including secondary, synergic, cummulative, short-term, medium-term and long-term ones, permanent and transitional, positive and negative) of the proposed conception variants on the environment (27) The evaluation of specific objectives and measures of the Regional operational programme NUTS II Northeast is summarized in tables for the individual areas of support in Chapter F.1 of the SEA documentation. Measures prepared for prevention, abatement or compensation of all consequential negative environmental impacts following out from the implementation of the conception (28) Based on the evaluation of individual priorities with respect to the reference objectives of environment protection specific conditions were proposed for implementation, which are reviewed in Chapter G "The SEA documentation" along with some partial recommendations of a more general nature. (29) An important part of measures to prevent major negative impacts of the implementation of OP Northeast on environment is also the proposal of environmental criteria for the selection of projects and the proposal for their inclusion into the system of evaluation and selection of projects submitted by applicants for aid from OP Northeast. Enumeration of reasons for the choice of examined variants and description of how the assessment was made including possible problems in gathering the required data (example: technical deficiencies or insufficient know-how) (30) ROP „Northeast“ is submitted a a single-variant programme. Alternatives may occur during its implementation, i.e. during the realization of individual concrete projects. With respect to this it is necessary that the ROP „Northeast“ monitoring system contains environmental indicators and criteria for the selection of projects according to proposals presented by the SEA executor. (31) The assessment of the impacts of ROP „Northeast“ on the environment was made pursuant to Act no. 100/2001 Coll. on the assessment of environmental impacts, as amended. An important groundwork was Methodology for the assessment of the impact of conceptions on environment (Ministry of Environment, edition Planeta 7/2004). Based on the issued conclusion from the declaratory procedure, the assessment of environmental impacts has included also the assessment of impacts on the system of NATURA 2000 localities. Problems in gathering the required data (32) There were no essential problems in gathering the groundwork documents and all available data were included into the SEA documentation. During the preparation of the SEA documentation, no deficiencies were found in the groundworks and knowledge that would have prevented the formulation of final conclusions.

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Establishment of monitoring indicators for the impact of the conception on the environment (33) The SEA executor suggested environmental indicators to monitor the measure of ROP impacts onto the respective reference objectives. In order to be able to foresee the ROP impact with respect to the proposed indicators and at the same time to eliminate impacts other than those of ROP it is necessary that the monitoring of these indicators is linked to the environmental assessment of projects submitted within the respective areas of support, i.e. that the environmental indicators are also used as criteria for the assessment and selection of projects. (34) The ROP monitoring system includes the following activities: assessment of submitted projects with the use of environmental criteria, monitoring of environmental indicators (namely on the basis of aggregated data from the project level), valuation of the monitoring, i.e. recording of changes of the environmental indicators, initiation of relevant steps on finding adverse impacts of ROP on the environment, publication of monitoring results, modifications of environmental indicators and criteria with respect to the character of submitted projects, communication with the authority relevant for the assessment (Ministry of Environment), and nature conservation bodies and other entities of state administration with the sphere of action in the field of environment conservation, provision of counselling services in the field of environment to the workers of operational programme implementation structure, i.e. namely to members of evaluation and selection commissions, provision of consulting services in the field of environment to applicants – project submitting organizations, provision of information on environmental issues linked to ROP to all stakeholders, both entities and individuals. (35) The proposed indicators are enumerated in a table presented in Chapter J.2. Specification of indicators (criteria) for the selection of projects (36) The SEA executor proposed criteria for individual reference objectives of environment protection, which are enlisted in Tab. L.1. These criteria should be incorporated into the system of assessment and selection of projects. Possible foreseen modifications of the environmental criteria will reflect the focus of the submitted and evaluated projects. The impact of the conception on public health (37) A greater part of public health determinants will not be essentially affected by ROP implementation. In an optimal case, the implementation will have a positive influence on public health, namely through the enhancement of social and economic determinants of the inhabitants such as expected enhanced education and increased supply of jobs, and development of infrastructure for healthy life style as a part of human resources management. The respect of environment conservation will result in the enhanced environmental quality and hence public health. (38) In case of ROP accepting outputs from the SEA process, there is no reason to foresee deterioration of environment and its determinants for public health. Where possible negative impacts on health or health-determining constituents of environment are mentioned, their elimination can be expected in the process of ROP implementation, i.e. during the selection of individual submitted projects, their approval and permission. Aggregative settlement of opinions received to the conception with respect to its impacts on environment and public health (39) The aggregative settlement of opinions received to the conception with respect to its impacts on environment and public health is presented in Table O.1., Chapter O. Conclusions and recommendations including a draft statement to the conception (40) Based on the current outputs from the assessment of impacts of the Regional operational programme NUTS II Northeast on the environment a statement can be made that no consequential negative impacts of ROP were identified on environment and public health. The ROP being of a greatly general character, its specific impacts on the individual constituents of environment can be established only during the implementation of concrete projects. An important element of SEA ROP is therefore the establishment of environmental criteria for the selection of projects, the use of which ought to ensure the implementation of projects within the framework of the respective ROP measures or linked programmes. (41) The draft statement is presented in Chapter P. The SEA documentation.

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