Page 46 - CE Outlook Regions 2023

whether the energy grid will be able to accommodate the renewables,
but the ministry eventually submitted the draft bill on December 5, 2022.

The cabinet also plans to transform the majority-state-owned energy
utility CEZ. Few official details have been given but it is expected to
involve nationalisation of energy production, while leaving distribution
with the listed company.

The government’s response to the energy crisis has been criticised by
independent analysts as too expensive and not effective enough in
helping the most vulnerable households.

3.1.5 Construction

The latest figures for October show that construction output increased
by 1.0% y/y and by 1.8% m/m. The production in building construction
increased by 1.2% and the production of civil engineering construction
increased by 0.4% y/y.

The planning and building control authorities granted 7.178 building
permits, which was 6.5% less y/y. The approximate value of the
permitted constructions reached CZK 38.2bn, which is an increase of
11.1% y/y.

The number of newly started dwellings is down by 27.7% and the
number of completed ones is down by 0.6% y/y. The decrease holds
particularly true for the number of dwellings started in multi-dwelling
buildings, the Czech statistical office points out.

3.1.6 Major Sectors

Major Czech brands including Skoda Auto or train and tram
manufacturer Skoda Transportation of PPF Group made their exit from
the Russian market after the Kremlin’s invasion of Ukraine and
imposition of sanctions. A focus on decoupling from Kremlin-linked
business can still play a role in business mergers and acquisitions in
2023.

Late in 2022, CEZ completed the takeover of Skoda JS, one of the
country’s main nuclear energy companies, previously owned by
Russian engineering group OMZ, which is controlled by Gazprombank.

Military materiel production will receive a further boost from the
government's plans to revive Soviet-era production lines and bring in
Ukrainian engineers and technicians. The project is coordinated with
the Ukrainian government and is expected to be financed by countries
supporting Ukraine financially and militarily headed by the US, UK, and
several EU member states.

Czechoslovak Group (CSG) concluded major deals – not subject to
public procurement as a result of the war situation in Ukraine – with the

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