Grandi Stazioni loses 30-year lease of Main Railway Station due to renovation delays

The Italian company Grandi Stazioni has lost its 30-year lease of the Main Railway Station in Prague, after failing to complete a renovation of the historical part of the building by October 2016. Czech Railways Administration says the deadline can no longer be extended, but the Italian firm is still pushing for a compromise solution on the argument that all sides would lose out by ending cooperation prematurely.

Photo: CTKPhoto: CTK Thirteen years ago Prague’s Main Railway Station was in a dismal state of disrepair and, unable to finance a reconstruction of this kind, Czech Railways Administration offered companies a 30-year lease of the premises in return for renovating the station. Grandi Stazioni won the contract in 2002 and the renovated newer part of the station with its rows of shops and cafés opened with fanfare in April, 2011. However the renovation of the historical part of the building with its Art Nouveau architecture designed by architect Josef Fanta –was dogged by problems. The original deadline,in 2013, was extended until October 2016, but in recent months it became clear the company had no chance of meeting even that deadline. It requested another extension, until 2018.

Dan Ťok, photo: Filip JandourekDan Ťok, photo: Filip Jandourek Although it seemed that further negotiation might take place, on Thursday Czech Railways Administration announced that Grandi Stazioni had lost its 30-year lease contract by failing to meet the terms of the agreement and asked it to vacate the premises. It lawyers claim that extending the deadline yet again is out of the question since this would be in violation of the law on public tenders.

Grandi Stazioni’s CEO Andrea Odoardi says the conditions of the agreement could not be met due to the poor condition of the historical part of the station which was much worse than anticipated, requiring more money and a significantly longer renovation schedule. Transport Minister Dan Ťok says the argument is not convincing.

“This excuse is really lame. Anyone undertaking a renovation knows there may be extra work involved and this was taken into account in the contract. Thirteen years seems long enough.”

Fanta Café at Prague’s Main Station, photo: Anton KaimakovFanta Café at Prague’s Main Station, photo: Anton Kaimakov Grandi Stazioni has confirmed that it received official notification of the decision and a request to vacate the premises, but appears to be still pushing for a compromise agreement on the argument that scrapping the deal would be a loss for everyone involved. It says that if all else fails it will take the matter to court, seeking damages for loss of profit as well the money which had already been invested into the reconstruction. It moreover points out that it has the intellectual property rights to the project documentation for renovation. The Czech National Heritage Institute has expressed concern regarding this particular aspect and the future of the ongoing renovation.

Whether this particular concern can still reverse the decision or whether the two sides are in the process of negotiating a termination settlement is not yet clear.