Digital odysseys

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TOP STORY pages 8–9

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Electric dreams Entrepreneur Daniel Křetínský is taking the majority ownership helm of largest Central European energy group EPH. Co-owners Patrik Tkáč and Biques Ltd are departing in share deals worth more than one hundred billion crowns

Jan Stuchlík

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he transaction will bring an end to an ownership structure which has seen CEO Daniel Křetínský and business partner Patrik Tkáč each hold 37.17 percent of the privately-held Energetický a  průmyslový holding (EPH) and the rest held by small private equity shareholders grouped under Biques, an offshoot of Czech-Slovak bank J&T Banka. Křetínský’s stake will leap to 94 percent. Tkáč will receive towards two billion euros for his stake, but that could rise by up to a further billion euros, depending on coal, gas and nuclear player EPH’s growth in coming years, the holding said. The passive Biques investors will receive more than a billion euros. Under the new structure, 41-year-old Křetínský – also a co-owner of Czech Media Invest, the publishing house behind E15 and CN Invest – will be the dominant shareholder while a selected group of his managers will own six percent of EPH.

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news

Dalai Lama: Cherish your EU HUMAN RIGHTS Tomáš Stingl

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e smiled, blew kisses and joked about his teeth. Tibetan spiritual leader, the 14th Dalai Lama, in the Czech Republic to speak at the Forum 2000 conference – a brainchild of the late Václav Havel – went out of his way last Monday to meet, greet and share his trademark humour with around one thousand supporters assembled outside the Castle on Hradčany Square. He cracked a joke even after receiving from the meeting organisers the traditional Czech welcome gift of bread and salt, on a podium in front of Salmovský Palace. “The bread is rather hard but I want to show you that my teeth are just as hard,” the Dalai Lama, who turned 81 in July, said while trying to take a bite. In his subsequent speech, the leader of Tibetan Buddhism called for unity and conci-

liation around the world. “One concept I greatly admire is that of the European Union. I appreciate the fact that nations that used to quarrel with each other for centuries made peace with one another after World War Two and joined forces,” the Dalai Lama said, adding that he would like to see the idea replicated among South American and Asian nations. He also called for the continued upholding of the legacy of former Czechoslovak and Czech President and personal friend Václav Havel. “Even though he is no longer with us physically, it is necessary to continue promoting his vision, even beyond the borders of your country.” The Dalai Lama reiterated his standpoint that he was not seeking independence for Tibet from China but was instead striving to defend and ensure the survival of the unique Tibetan cultural heritage. According to him, it is essential not only

for the six million Tibetans but for the whole international community. “There are for example 400 million Chinese followers of Buddhism, with many of them following Tibetan Buddhism,” noted Tenzin Gyatso, believed by the faithful to be the 14th incarnation of the Bodhisattva of Compassion Avalokiteśvara. The Dalai Lama was later greeted by National Gallery in Prague director Jiří Fajt. Some speeches made during the Hradčany Square occasion aimed jibes at the current Czech political scene. “Mr. President Zeman, if you prefer economic interests over human rights you are bound to lose your freedom,” said for example Mikuláš Kroupa, director of Post Bellum, a nonprofit that documents memories of witnesses to momentous 20th Biting through. The bread is rather hard but I want to show century events, during his po- you that my teeth are just as hard,” said Dalai Lama while trying dium speech, fixing his gaze on to take a bite of the traditional Czech welcome gift the Castle.

Rath wins fight for another day in court

Photo: ČTK

Pavel Otto

All very e-lluminating Australian artist Amanda Parer’s giant glowing humanoid being and an annual fixture, the monumental planetarium-like dome with its unique 360° projection of shapes and images, were among the highlights at the fourth annual SIGNAL Festival of Lights in Prague. This year the largely free-of-charge event presented 23 installations over four days. Another hit was rising waves that appeared to be something between pavement and ocean (see photo) in the Jiřího z Poděbrad locality. Festival goers were also mesmerised by videomapping with 3D glasses to enhance the experience, at a church and two palatial buildings, while plants and trees were lit up in enthralling ways

A part-victory has been scored by former Central Bohemia governor and ex-health minister David Rath. The Prague High Court has surprised some observers by agreeing with an appeal from Rath, a physician in Prague suburb Hostivice. In proceedings behind closed doors, it cancelled a verdict in the corruption affair that engulfed Rath and several other people. Nothing, however, suggests that the high court did not recognise key evidence against the accused, namely dozens of hours of police wiretaps and the confession of entrepreneur Ivana Salačová. The case will now return to the Prague Regional Court for a fresh hearing. That gives Rath and his co-defendants an opportunity to convince the court of their statements of innocence – they claim the case mounted against them was fabricated and politically motivated. They also insist that it has

taken an inordinate amount of time, even though they alone have caused the delays. Rath, previously one of the most distinct Social Democrat politicians, was arrested in May 2012 with a  box for wine filled with banknotes. Given the worries of investigators that he would abscond abroad, Rath was in November detained. The Constitutional Court later awarded Rath compensation for this move. The main trial lasted two years. Rath's purported health problems and the switching to different lawyers by other defendants, for example, caused delays. The regional court in July last year found Rath guilty of receiving bribes and handed down an appealable prison sentence of eight and a half years and an order of forfeiture on 20 million crowns worth of his assets. In relation to the manipulation of commissions in Central Bohemia, the former governor accrued CZK 16m, according to the indictment.

Photo: Anna Vacková

Tibetan spiritual leader attends Forum 2000 Conference

ANO chief mulls scrapping Senate after poll meltdown Pavel Otto Regional prominence, quite often local politicians, turned out to be the most successful candidates for the third of the Senate’s seats that were up for grabs in the election seats. Various people with big media profiles, on the other hand, failed to impress voters. The Christian Democrat Party [KDU-ČSL] was the runaway winner, succeeding in nine of the 27 election districts, with a collection of purely party candidates and candidates put up in coalitions with other partners. The KDU-ČSL will now form the second biggest Senate representation. The party has already made it known that it will attempt to secure the upper house’s “second in command” post, namely that of the first deputy chair.

The other two parties in the ruling government coalition ended up as election losers. It was the first time since its 2011 arrival on the political scene that the ANO movement failed to win an election. Within hours of the contest’s result party leader Andrej Babiš was suggesting the upper house should be abolished. He questioned its relevance, given the 15.4-percent turnout at the polls. The ruling coalition still has a 49-seat majority in the chamber. ANO suffered something of a second-round meltdown. The movement led by entrepreneur and finance minister Babiš came out top in no less than 14 of the 27 ties in the first round of the Senate election and held high hopes for the second round contests decided between the two best performing round-one candidates. As it turned out,

a mere three ANO candidates were actually voted into the upper chamber, far short of the 10 targeted by the party. Sharing second place on the election results roster with ANO were the Mayors and Independents [STAN], and the Civic Democrats [ODS]. They took three seats each. Ending up with two seats apiece, were the largest coalition partner, the Social Democrats [ČSSD], right-leaning TOP 09 and Severočeši [Northern Bohemians]. The Senate election’s first round took place in parallel with the regional election a week before the second, decisive round. The regional election dealt the first blow of the 2016 election season to ČSSD before it went on to lose eight seats in the Senate. However, with 25 senators, the Social Democrats still have the strongest Senate caucus.

Arsen Lazarevič’s notebook

Road to nowhere German green energy subsidies are set to be pushed up once again – to 6.8 euro cents per kilowatthour. This despite Chancellor Angela Merkel stating in 2011 that she wanted a freeze at 3.5 cents. The German Energiewende – meaning the single-minded pursuit of dominance for renewable energy sources – will certainly turn out to be a dead-end policy and will likely bring Germany some very negative economic consequences. For one, it is making electricity more expensive for homes and businesses, thus reducing the latter’s competitiveness. At the same time, it is devastating

the energy market – electricity prices on the open market continue to be at historic lows, but that has not been reflected in consumers’ bills. And while nuclear power plants are being decommissioned, coal-powered electricity plants are becoming the only profitable traditional energy source. Primarily those fuelled by dirty brown coal. Indeed, such stations are becoming ever more important to the maintenance of a stable electricity grid. And so, ironically, the Energiewende programme is actually polluting the very environment it is supposed to protect.

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business

Exam shift adds up nicely for tutor firms EDUCATION Adéla Čabanová

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nusually high interest from parents is anticipated by firms which offer pupils high school entrance exam preparation courses. Some 100,000 or so pupils will next spring sit the newly composed unified exams in Czech and mathematics. That opens a  much wider market space for the educational services enterprises to offer across-the-board courses with mock exams. The Zkoušky nanečisto [Draft Exams] firm, which operates in Prague, is, for instance, experiencing a year on year increase measured in the dozens of percent when it comes to those interested in taking such long-term courses. “The state exams are certainly an additional factor, but how strong that is I don’t know. In the ninth grade [the final grade prior to seconda-

ry education] those exams are now also applied to those who are not opting to go to a gymnasium [grammar school] but have selected a school which previously took pupils without the entrance exam. So that is definitely expanding the number of clients,” said Zkoušky nanečisto founder Petr Husar. The tests, for example, now cover pupils which are set to go to academies that specialise in trades or industry. The Tutor company has this year stepped forward with preparatory Czech and mathematics courses. “The state admittance exams are bringing about a uniform exam concept and it is therefore also possible to devise quality preparatory courses,” said firm director Martina Šmídová. To date, Tutor has only offered one-to-one courses. This year, it is counting with 1,400 students booked in for attendance courses and additional students working

Photo: Profimedia.cz

Unified high school admittance exams offer big market opportunity

with online studies. Eighty lessons covering maths and Czech will cost parents CZK 7,000. The price for just one subject, with 40 lessons, is CZK 3,999. The Scio firm has for a long time provided preparatory

products aimed at pupils set to take secondary school entrance exams. It particularly dealt with exams organised by the schools themselves. Now, with the return to a centralised system, it is dealing with the

tests set by the state’s Centre for the Securing of Educational Achievement [CERMAT]. “We are expecting heightened interest in preparatory materials and courses,” said Scio’s Jana Kovaříková.

Electric dreams

Photo: Michael Tomeš

Continued from page 1

Look who’s Next Door Celebrity chef Zdeněk Pohlreich – famed for his television work in which he casts an invited, but unforgiving, eye over the kitchens, cuisine and waiting staff of restaurants – is reshaping his gastronomy business. While Pohlreich, who first learned to cook as a child under the guidance of his grandmother, has closed his restaurant in Switzerland and sold Japanese eaterie Yamato in Prague’s Vinohrady, he’s opened an entirely new venue in the centre of the capital. Immediately opposite his Café Imperial in Zlatnická street is now the Next Door bistro. The restaurant is set in a quite recently renovated historical building, most of which is taken up by the Cosmopolitan luxury hotel

Part of the cash enabling the big ownership consolidation is arriving from an investor fund group led by Australia-based Macquarie Infrastructure and Real Assets. The global investor has agreed to acquire 30 percent of the EP Infrastructure (EPIF) unit, the EPH holding’s most valuable business. It includes EPH's flagship 49-percent stake in Slovak gas pipeline operator Eustream, which delivers Russian natural gas via Ukraine to the EU and European gas to Ukraine. From information put out by the holding, it follows that the EPIF shares have fetched more than EUR 1.5bn. Using capital from the Macquarie payment, EPH will buy back Biques’ 25.67 percent stake in the holding and shares controlled by Tkáč and Křetínský for EUR 1.5bn. The shares amount to an aggregate 30 percent of EPH share capital and will be

cancelled following the purchase. Křetínský, meanwhile, is buying 35 percent of Tkáč’s 37.17 percent in EPH. “For myself personally as well as for other partners in J&T, this transaction represents a  partial monetisation of gains from an extremely successful project,” said Tkáč, chair of the J&T Banka board of directors. He added that he particularly wanted to invest in projects of former J&T partners and Křetínský. Křetínský commented: “While I perceive the agreement to be the right step carried out at mutually attractive conditions, it was not a simple one for myself personally. Patrik Tkáč is the one who gave me the opportunity to do business and our joint ownership of all assets was the basic premise of my activities. At the same time, I  have to stress, that this transaction will have no impact on our continuing joint ownership of other assets.” Read more at e15.cz/weekly

Banks to pump more capital into property

up and down

lending, is one key demand of KPMG added that 95 percent investors,” said Pavel Kliment, of real estate loans awarded by Two-thirds of domestic banks a partner at the Czech branch domestic banks were problemexpect a higher volume of real of KPMG. Debtors often con- -free. Parallel situations are estate loans to feature in their sider a longer repayment pe- seen, for instance, in Sweden, lending portfolio in the next riod as a higher priority than Germany and Great Britain. year to a year and a half. At the pressure on interest margins, Despite that picture, the same time the market is seeing he added. banks’ hunt for clients has a year on year increase in the Czechia boasts the most prompted a first intervention number of banks willing to of- advantageous conditions from the Czech central bank. fer credit tagged to an interest for the financing of proper- The regulator has ordered the rate of fewer than two percent. ty trades in Central Europe, domestic branch of MoscowThose are two conclusions of analysis carried out by another -headquartered Sberbank research conducted for the consulting firm, BNP Paribas not to close credit deals in Property Lending Barometer Real Estate, has shown. the financing of construction 2016 produced by consultan“The Czech market in investments and commercial cy KPMG. While noting the commercial property has property. It claims the finanpressure for cheaper loans, healthy fundamentals in all cial institution has not held to the firm also drew attention segments in terms of the de- regulations with sufficient pruto how agreed repayment pe- mands of leaseholders, the in- dence, reported news server riods are lengthening. frastructure and the outlook iDnes.cz. “Extending the credit amor- for economic growth, which Generally it now applies tisation period, or more preci- is well above average,” said that Czech banks even venture sely reducing the proportions Lenka Šindelářová, head of into giant transactions. seen in repayments of the prin- consulting at the Czech office cipal courseENGLISH_Sestava of the of BNP Paribas Real Estate. DB 16 E15during Weeklythe 225x148 1 26.9.16 23:50 Stránka 1Read more at E15.cz/weekly Daniel Novák

David Rath Ex-health minister The Prague High Court agreed a cancellation on appeal of the guilty verdict in his corruption case. Another Prague Regional Court hearing will now be scheduled for the physician. Petr Hutla Board member, ČSOB The bank has been re-established as Česká pošta’s [Czech Post’s] chosen partner for the provision of financial services at its post office outlets. It beat off 14 firms who were hoping to nab the contract from the bank in a tender. Václav Řehoř Board chair, Czech Airlines [ČSA] The national carrier is riding a healthy upward trend in air transport. In the first three quarters of this year, it saw year on year passenger growth of 14 percent.

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Lucie Koldová Designer

Light!

27. – 31. 10. 16 Designblok Prague Design and Fashion Week www.designblok.cz Designblok is supported by following institutions: Ministry of Regional Development of the Czech Republic, Ministry of Culture of the Czech Republic, EUNIC Cluster CR – European Union National Institutes for Culture, Netherlands Embassy in Prague, Embassy of Sweden in Prague, Lithuanian Embassy in Prague, Embassy of Belgium – Delegation of Wallonia, Cervantes Institute in Prague, Polish Institute in Prague, Bulgarian Cultural Institute in Prague, Goethe Institute in Prague, Italian Cultural Institute in Prague, Hungarian Cultural Institute in Prague, Embassy of Israel, Czech Centres, Prague 1 and Prague 7 City Districts, National Museum Official Suppliers: Excelent, KOMA Modular, Parfumerie Douglas, SIPRAL, Sonberk, Spyron, TONI&GUY, Veuve Clicquot Diploma Selection / Czech Section support: T-Mobile Czech Republic Media Partners: Architect+, Art+Antiques, CZECHDESIGN, Design&Home, Dolce Vita, Dopravní podnik hl. m. Prahy, elle.cz, ERA21, ELLE Decoration, Flash Art, H.O.M.i.E., Marianne Bydlení, Moje Psychologie, PLAKATOV.CZ, Radio1, SOFFA Foreign media partners: H.O.M.E., H.O.M.i.E., Atrium, Designum Acknowledgement: Hotel Jewel Prague, Metropol Hotel Praha, Ambiance Hotel, Absolutum hotel, Acqua Panna, San Pellegrino Partners:

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opinion

Blooming ‘bureaucratic terror’

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he number of public sector employees in the Czech Republic continues to grow. It’s up by 23,000 since 2012, to today’s total of 437,000. But that number is far from a  definitive count. According to a 2014 Centre for Economic Research and Graduate Education (CERGE) study, the actual total is estimated at 935,000, meaning around one-fifth of the country’s workforce. The economy is doing well, which means that government politicians have plenty of resources available to create new public sector jobs. And then, it seems, they expect such staff to remember who hired them at the voting booth. Which means they are using taxpayer monies to essentially buy votes, all the while boasting about their job-creation credentials. A nice trick. This effort to essentially buy votes is also evident in comparison with other countries. But it would be unfair to merely attribute this phenomenon to the current government and events since 2012. Even in 2009 the Czech Republic dominated in this practice. According to a 2015 OECD study called “Government at a Glance”, Czech public sector employment – recalculated to account for only full-time work – accounted for 35 percent of overall employment levels. No other OECD country attained

such a high share. In fact, even Scandinavian countries had a lower share, albeit Denmark barely trails. Czechia has also triumphed with regards to the share of public sector employment in comparison with the overall labour force. The latest data are sadly not yet available, but what is already clear is that Czech public sector employment is one of the highest among all economically developed nations. Conversely, public debt measured against the size of the

increased productivity levels and the stymied introduction of innovative methodologies. One experienced Czech banker in attendance even unashamedly used the phrase “bureaucratic terror”. Czech governments have apparently been soaking up tens of thousands of qualified staff to work in the public sector. The result has been labour shortages in the private sector. In an exponential effect, the new public sector then unleashes further “regulatory terror”. One

The Social Democrats are now engaged in soul-searching efforts after a less-than-stellar electoral performance. Outgoing South Moravian governor Michal Hašek will go back to being a local councillor; Senator Zdeněk Škromach is bidding adieu to politics; and philosopher Václav Bělohradský, failed Social Democrat and Green candidate for the Senate, is also

leaving politics. Now comes the “what went wrong” part... Meanwhile, in a television debate on potential post-election regional coalitions, the strongly Catholic ANO MP Martin Komárek praised God Himself and his wife Petra. That may not be enough to guarantee the journalist-politician a major political future. But it could be enough for a house-husband post. Civic Democrat chief Petr Fiala has proclaimed that his is now the hegemonic party of the right-of-centre. That after the “crushing victory” of winning three out of 27 Senate seats, while losing five. Nothing like optimism even in the face of reality.

joke

This effort to essentially buy votes is also evident in comparison with other countries economy is one of the lowest among developed nations. And this year, the government may even end up balancing the budget. Frustrations over the corpulence of the Czech public sector were highly evident during this October’s Prague Capital Market Summit conference. Business leaders, bankers and economists demonstrated a rare consensus over this single issue: the size of the state sector, and the regulatory framework which it has created, are stifling the private sector and killing investment activities; the consequence of this is the prevention of

cannot help but agree. Sadly, Parkinson’s law is merciless in this regard [“Work expands so as to fill the time available for its completion” –Ed.]. Which then leads to the question of whether the current trend of increased “terror” can be reversed, or whether we may one day end up seeing the total collapse of the current model of the social state. But today’s politicians need not concern themselves with such a potential future. After all, that scenario has nothing to do with the all-important next election. The author is chiefeconomist at Roklen

“Take 2 capsules as needed for stress. Put one in each ear whenever your boss starts talking“

E15 weekly, economic and business news magazine | www.e15.cz Igor Záruba, Executive Editor, [email protected]; Marian Hronek, Editor, [email protected] | Translation: TextMasters, [email protected] Contact: Adéla Nová, Secretary | Call (+420) 225 977 668 Postal address: Komunardů 1584/42, 170 00 Praha 7 | Published CN Invest a. s., Pařížská 130/26, 110 00 Praha 1 Josefov, IČ 04312945 Advertising: Šárka Kamarýtová, Sales Manager, [email protected] Production: [email protected] | Distribution: [email protected] Registration: E 21420 E15 weekly, ISSN 2464-711X Reprints & Permissions: The Publisher will consider requests for reprints or any other reproduction | Printed by EUROPRINT a. s. facebook.com/e15weekly

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Lukáš Kovanda

Don’t mention defeat! Call the spinmeisters ANO leader Andrej Babiš says that this year’s record low turnout (15.4 percent) in the second round of the Senate election serves as a reason to discuss abolishing Parliament’s upper chamber. Of course that has nothing to do with the fact that only three of 14 of ANO’s Senate candidates emerged victorious.

Photo: Profimedia.cz

The ANO party must now be viewed as a stable part of the Czech political scene. It’s perhaps not quite an ordinary party, but ANO is no anomaly

Jana Havligerová’s diary

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top story

Goodbye, real world... R

ight now, virtual reality has the potential to impact more people around the world than ever before. The first “virtual paper planes” are already circumnavigating the globe, and more such digital odysseys are on the way

Darek Šmíd Perhaps the most unusual aspect of virtual reality is the memories one creates. When I think back over my experiences in the virtual world, I don’t see computer games, creative programmes or graphic design. Rather, all I recall are the kilometre-long space ships flying above my head; and the glowing statue, which I managed to chisel out with my bare hands, flying through the air; and, of course, the hoards of manic clowns which I had to shoot down in one particular game. I still feel the echoes of my trigger fingers. Virtual reality is no longer just a storytelling device for movies along the lines of Johnny Mnemonic (1995), The Matrix (1999) and eXistenZ (1999). The experience has become comparable to leafing through the pages of a real magazine. And right now, the world has the largest number of virtual reality participants it has ever had. This surge is largely down to the top-of-the-line PlayStation VR head-mounted display from Sony, which offers the virtual reality experience to anyone who owns a PlayStation 4 games console, and is willing to fork out CZK 10,000. Hitherto, the VR experience was only available to those able to invest far greater sums into supercomputers and other necessary hardware available from companies such as HTC and Oculus. But now all that is changing. Virtual reality has become an easily accessible form of entertainment. Welcome to the future.

Photos: Jan Ignác Říha

The ins and outs

Entertainment-based technology has always sought to create an immersive experience. Which is why the best operatic auditoriums are designed as dome-shaped semi-circles – the best possible design to amplify sound waves so as to reach everyone in the audience. And that is why Pablo Picasso’s Guernica 1937 oil painting measures 3.5 metres high and almost 8 metres across – so as to enable the viewer to properly absorb all the horrors of the depiction of war (in this case the Spanish Civil War). And that is why today zoos do their best to offer visitors the chance to stand in immersive enclosures, with monkeys jumping over their heads, while costly underwater aquarium tunnels enable up-close encounters with stingrays and the like. Naturally, the greatest expenditures on such immersive experiences are spent by the film industry. Moving a long way from the earliest stories of viewers ducking an approaching on-screen train during the dawn of the cinematic age, now viewers’ senses have become far more attuned, and perhaps even numbed to sensory overload. This author went to see the much-hyped 2009 CGI movie Avatar on an IMAX screen, and barely blinked even

when alien panthers were jumping out of the screen. The action levels keep increasing, with almost every pixel of the screen given over to dizzying motion. But do we take it all in? Or are we switching off? 2D gives way to 3D, then 4D with the added sensual stimuli of shaking seats. The same as mono which then gave way to stereo. After that came surround sound. Then 5.1, 7.1. Now you can go and see this year’s live action film Gods of Egypt in a cinema with Dolby Atmos, which whispers right into your eardrums no matter where you sit.

processing the VR experience. Sure soaring through space in the shooting game Eve: Valkyrie is an experience from another world – albeit one that will set you back CZK 50,000. Furthermore, to the touch both Oculus and Vive felt more like ski glasses with wires hanging out the side. But PlayStation VR trailed a path frequently utilised by Apple: the tech may not do everything, but what is does, it does really well – and it looks sexy in the process. PlayStation VR looks like some kind of alien cap, and it shines too – certainly very cool! It relies on both the common Playstation controls as well as motion sensors which look like glowing ice-cream cones. Sony has had these on the market for more than five years. And it is all very user-friendly: no need for a complex setting-up process; no need for additional spending on supercomputers – just hook it up to a PlayStation 4. And today 40 million users around the world already have one of those.

Back to VR

Virtual reality is reaching levels of accessibility and immersion as never before. No matter what tech the cinema offers, the experience is still one of passively viewing a screen. You go where the camera takes you. But with virtual reality, the user is the master of one’s own experience. With just a few steps, one can stand, for example, at the foot of Mount Everest, with a 360 panorama of the Himalayas. And when you do return to the real world, your brain has registered memories not of a 2D film screen, but of a sensory experience as close to reality – hence virtual reality – as can be. Presently, different virtual reality hardware devices look pretty similar. You put on a headset and inside are two independent screens – one for each eye – as well as motion detection and other equipment. The headset is strapped around your head for the sake of stability. And to make the immersion even more real, there are stereo earphones. The 3D trick is nothing new. Each eye receives a slightly different picture and the brain does the processing to turn that into a three-dimensional image with height, width and depth. Of course the images the eye receives must be carefully designed to match the angle of sight. And that means an image not constrained by the edges of a frame. And so with both optical and auditory senses shifted into a virtual world, the brain is deprived of a number of key indicators that the world into which one has stepped is actually not real. And then the specific experience begins. For example with the Oculus Rift virtual reality headset, one might start inside a large entrance hall. The user turns their head in all directions to examine the giant space. Outside the structure’s windows, one notices an urban landscape of alien-looking skyscrapers. Wouldn’t this be a great location for Czech Television’s political reporter to film an episode of his interview show (I can’t help but think)!

Not quite

But mobile virtual reality should not be confused with the top-of-the-line version. Samsung Gear VR, Google Cardboard and the latest Daydream

Save Gotham. City and become a comic book hero in Batman Arkham VR View are considerably cheaper for consumers because their displays utilise simple mobile phone technology. Which is why they can hardly be described as offering a fully immersive form of virtual reality. So whether you place your phone in a Gear device, or the decidedly low-tech-looking Cardboard (which can literally be constructed out of cardboard via an online instruction manual) the experience is still restricted by an unnatural sense of tunnel vision.

What next?

True virtual reality

True consumer-level virtual reality hardware is today offered by a trio of companies – Oculus Rift, HTC Vive and PlayStation VR from Sony. And as Czech YouTube video blogger Fatty Pillow might say: “That’s another universe!” These three headsets are equipped with immeasurably more advanced technology than smartphone displays can offer; no more tunnel vision – the epic viewing angles fully encompass the field of vision, enabling users to become totally immersed in a virtual world. The high-definition experience comes by way of 2160 x 1200 pixels for the first two and 1080p in Full HD mode in the case of the Playstation. Each motion of the user’s head is perfectly mirrored in the on-screen virtual experience. And technology is what had, until recently, held back a truly immersive and affordable virtual reality experience. The human brain can detect a motion-to-picture delay of as little as 50 milliseconds. Only recently has hardware been able to close this gap. Before, a user would move, but a lag in the response time of the VR headset tended to create disorientation and even nausea. But now domestically accessible technology has caught up. And that means that VR for all is finally becoming a possibility. The aforementioned trio of home VR devices all feature supplementary handsets to enhance the experience. These bring the human hand into the VR world, offering a plethora of interactive possibilities. This author tried

Test rabbit. Texas governor Greg Abbott tries on an Oculus Rift device at AMD‘s Austin offices such a setup via HTC. When I lifted my hands in front of my face, it reminded me of when the hero from the Hellblazer comic series once said: “I’ll never have an experience like that again, even if I  live to 100!” I  twisted my hands around and then back again – and my virtual hands precisely copied my moves. Virtual reality tricks our brain in a way for which evolution provides an exploitable loophole. Simply put – we see, we move, we believe... However, while the respective launches of HTC Vive and Oculus Rift created waves a few months back, since then the proverbial sound of crickets has returned. Which means that PlayStation VR perhaps represents the last viable chance for virtual reality to gain mass market appeal. The reasoning behind such an assertion is simple: HTC Vive and Oculus Rift were both highly expensive. Not only did the basic hardware cost a fair dime, but consumers also required very strong computers capable of adequately

But even this latest army of pioneers is not claiming to have the final word in the development of virtual reality. So-called “augmented reality” is also undergoing significant development, as evidenced by this summer’s boom in playing Pokémon Go on mobile phones around the world. In such games, the real-world environment is augmented by computer-generated features. So now instead of huddling behind the proverbial school shed to slack off, teenagers are huddled together trying to hunt Pikachu. Now that’s progress... The future appears to point in the direction of a blend of VR and augmented reality. US science fiction author David Brin appeared to point the way forward with his 2012 novel “Existence” – a multilayered, multi-channel VR headset experience. One can imagine a combination of games like Pokémon, and more useful interactive educational experiences, for example exploring historical sites via VR. But many failed projects along the road testify to the uncertainty of future developments, for example Google Glass, and HoloLens from Microsoft. Both offered on on-screen augmentation of reality. Very nice. But they flopped. As humans, one form of entertainment, or one form of reality, has never seemed enough. That’s why we dream, or go to the opera, study works of art, or visit otherworldly enclosures at the zoo which take us to the jungles of Papua New Guinea. But never before have we been able to construct as immersive an experience as today’s virtual reality. Step inside... Taken from the magazine

10/11

face to face

TOMÁŠ IGNAČÁK

P

ilsen-based engineering group Škoda Transportation does more and more business abroad. While committed to its ongoing conquest of Germany, the company is also trying to make its mark in Israel and has no qualms about collaborating with Chinese businesses. “Our closed contracts just now are for deliveries abroad,” says group CEO and board chair Tomáš Ignačák

Photos: E15 Michael Tomeš

Rolling into Germany, Turkey and China

Jan Šindelář A  Škoda Transportation has walked away as the victor from an arbitration dispute with Czech Railways [ČD]. Has the dispute not done you more harm than good when it comes to your company’s image among your customers and the public in general? It certainly has. But that was not down to the outcome of the arbitration, it was all the fuss surrounding it. There have been way too many half-truths and unsubstantiated claims. We are a company that employs 5,500 people and sends more than half of its production out of

the country, and a company that has been investing billions in the development of its products. Added to that we are a company with a longstanding history. The campaign that did the rounds in the media was quite defamatory while we did in fact make every effort to avoid the arbitration in the first place. And even after the verdict was announced, we were still trying to achieve a conciliatory solution. You even threatened a lawsuit against transport minister Dan Ťok over some of the statements that appeared in the media. Did you pursue that step?

Our legal representatives conducted a thorough analysis of the statements and recommended suing the ministry instead. According to the lawyers, taking the ministry to court would stand a better chance of success as opposed to suing Mr. Ťok as a private person. Having considered all the pros and cons, we eventually decided to let it pass. There was a good possibility that such a lawsuit would by far exceed in its duration the tenure of the incumbent minister. Plus there are many genuine experts working at the ministry whose work we greatly appreciate and whose circumstances we also took into account when pondering potential legal action.

I am unable to give you an exact number right now but in general more than half of our output is destined for abroad. Our closed contracts just now are for deliveries abroad. We have recently signed a contract to supply trams to Eskişehir in Turkey and we will do the same for Riga in Estonia and Chemnitz in Germany.

foreign manufacturers are often discriminated against. Is that your experience as well? I can certainly confirm it. There are countries where we don’t bother trying, such as France or Spain. It would simply be a waste of time. Germany also used to be quite self-protective but it is getting better gradually as shown by our success in Bavaria and Is it your first contract to supply by the mentioned Chemnitz project. trams to Germany? Yes, it is a breakthrough, as it is our first Does it feel good to gain a foothold opportunity to get references for our in Siemens’ backyard? trams in Germany. Germany is a major We feel good about every new procountry when it comes to using trams ject, such as the Eskişehir contract.

Are you keeping an eye on new developments surrounding the disputed set of locomotives and the possibility of them operating in Germany? Or have you left it all in the hands of ČD? We fulfilled our end of the contract and supplied the operating permits and their equivalents for all the countries requested. When it comes to the actual operation of the locos in any particular country, well that is entirely up to the operator. I  would prefer not to comment any further. Although the arbitration has concluded, court action is still ongoing. The biggest order Škoda has received to date is one for the S-Bahn urban and suburban railway in Nuremberg. In that instance you are to supply trains to National Express. Has that business case made any progress? That is truly a sizeable project, worth almost 10 billion crowns. The order is for a total of 39 five-carriage trains for suburban service in the wider Nuremberg area. We succeeded in winning the tender in early 2015 and National Express confirmed our bid. Unfortunately, Deutsche Bahn appealed to BEG [Bayerische Eisenbahngesellschaft, the Bavarian railway company wholly owned by the Bavarian Government]. The current state of affairs in this case is that an appellate court is to convene in October and hopefully deliver a final verdict. It is the final instance available for an appeal.

We’ve just submitted our bid for electric units to be supplied to the Israeli state railway operator. If we win we will see the project through with CRRC Sifang

When will the first train carry passengers in Germany? I would stop short of divulging a date. We will do that together with Deutsche Bahn. At any rate, there will be plenty of opportunities to see the trains in motion next year as they will undergo testing on circuits in both the Czech Republic and as such it offers unprecedented poand Germany. tential. We have also submitted our bids Škoda Transportation has traditiona- in a number of other tenders in Germany. lly been perceived as a  supplier for whom Czech Railways is more or less When it comes to doing business with the sole customer despite attempts Western European countries, Czech to eliminate that perception. What exporters often complain that despiproportion of your business does ČD te there officially being a single market, open to all EU member states, account for?

We have already delivered 70 trams to Turkey and another 14 will follow. Does the current political situation in Turkey affect you? It is not perceptible in any way in negotiations. Of course, when it was right, left and centre in the media we were asking ourselves whether to submit

Tomáš Ignačák (47) Graduated from the Faculty of Electrical Engineering and Communication of the Brno University of Technology and completed postgraduate studies at the University of Toruń in Poland. Began working at Pars nova (previously Pars DMN Šumperk) in 1993 and became its CEO and chairman of the board in 2000. In 2008, the company became a subsidiary of Škoda Transportation. In 2012, Ignačák became a Škoda Transportation shareholder as well as vicepresident for sales. Three years later, ascended to the position of group CEO.

our bid at all. But we have not felt any actual effects on business. Web news server MotejlekSkocdopole.com recently ran a story about giant Chinese state-owned rolling stock manufacturer CRRC expressing an interest in Škoda Transportation, initially in the form of a joint venture. Can you provide any details? As I have already mentioned, we have several projects in China and we greatly appreciate our collaboration with local companies abroad. Regarding your question, I can give you a piece of news hot off the press. At the end of September, we submitted our bid for electric units to be supplied to the Israeli state railway operator. If we win we will cooperate with CRRC Sifang in seeing the project through.

12/13

Moravian Tuscany T he countryside around the southeastern Moravian town of Hodonín, and in the environs of the nearby village of Šardice, is filled with expanses of wheat and corn fields. And the rolling landscapes are tinged with shades of yellow, green and brown. The area lures photographers from as far as South Korea and Japan. And its similarity to the Italian countryside has led to the nickname “Moravian Tuscany”

Photos: Ludmila Korešová

special report

Author’s tip Spring is the best time to take photographs of the colourful landscape in Moravian Tuscany. From the end of April to early May, yellow rapeseed dominates. By autumn, the land may be bare, but in the right weather conditions, fog creates a surreal scene as it creeps across the hilly landscape.

Věra Sychrová Asides from Tuscany and the Palouse grassland region of the northwestern US, no other place on earth is said to have similar characteristics to Moravian Tuscany. However, the “natural” beauty here is actually manmade – and there was once a decidedly unnatural and deadly consequence. “The deforested land filled with rolling fields of corn, wheat and sunflowers, is perfectly predisposed to causing floods, as the rainfall flows down instead of being absorbed. It erodes earth, bringing mud down into the valley,” cautions our local guide Miroslav Gregorovič.

Back in the summer of 1970, Gregorovič experienced with his own eyes the consequences of such agricultural practices. He was working at the nearby Dukla coal mine. Strong rainfall caused quiet streams (the Kyjovka and Trkmanka) to transform into gushing rivers. “The torrents washed away everything in their path. The chief engineer and I went to check out the state of the mineshafts. But en route we were swept up by a huge wave of water, which lifted us and our van right into the air,” recalls Gregorovič. The flash floods tore off a layer of topsoil and began to flow into the lignite mines. Light sands were transfor-

med into sodden ground, the waters flooding 32 kilometres of tunnels. The tragedy led to the deaths of 34 miners. Craters up to 60 metres across formed in a number of places. “Had I not switched shifts, I would be among the dead,” says Gregorovič. “We were all hoping that some miners might be saved inside an air pocket. Their wives and children waited eagerly for a week at the mineshaft entrance, hoping and praying. But no survivors were found.” It took three years to clear up the mess left by this tragedy, at an estimated cost of CK 66m. Mining was permanently halted at the site in 1992, while the

underground tunnels were razed the following year. Later, as mayor of Šardice, Gregorovič tried his best to make sure such a tragedy could never happen again. Lakes were dug to capture flood waters; trees were planted. “We began working on reducing wind erosion and also bringing back former animal and plant life. We created bio-corridors for wildlife, which can now migrate without obstruction,” says the former mayor. Taken from the magazine

14/15

prague rambler

7even terrific tips

That’s the spirit!

Text Viola Černodrinská Illustrations Tereza Kovandová

Keplerova 6, Prague 1 A stone’s throw from Prague Castle, the Savoy hotel’s Hradčany restaurant is introducing game to its menu complete with tastings of Scotch and Bourbon.

Beauty derived from nature

12 Nov, Prague Gallery Laufen, 5 I. P. Pavlova square, Prague 2

If purely natural cosmetics is your thing then Green Beauty Market is your event. You will be able to attend lectures and take part in discussions held throughout the day on a range of topics such as healthy hair dyes, the testing of cosmetic products on animals and the certification of natural cosmetic products. Entry is free following registration at www.praguegallery.cz

Vegetable originals...

17 to 21 Oct, Betlémské square /1 Liliová street, Prague 1

Loyalty pays A new loyalty program, PFB, was launched in September, allowing members to buy products by brands such as GEOX, Armani Jeans, Beltissimo, Versace Jeans, Weekend Max Mara, Marina Yachting and other names with discounts of up to 15 percent. There are 21 shops located around Prague alone where you will be made welcome with the PFB card in hand.

Restaurant V Zátiší has joined forces with the Save Food [Zachraň jídlo] initiative. On its October menu it includes dishes made with imperfectly shaped vegetables. Usually, they would be ploughed back into the soil. Look forward to a special autumn pumpkin menu.

‘The Customs Officer’ in Prague 15 Sept to 15 Jan, Palác Kinských, 12 Old Town Square, Prague 1

The National Gallery in Prague holds the first ever Czech Republic exhibition of works by Henri Rousseau, one of the most prominent artists at the turn of the 20th century. The value of works by this painter – nicknamed the “customs officer”, or “Le Douanier”, by friends and as the “Sunday painter” by detractors – was recognised over time. Well-known works by Rousseau include his jungle scenes, created despite him never having set foot outside of France. The exhibition is supplemented with works by Czech artists influenced by Rousseau, such as Otto Gutfreund, Jan Zrzavý or Toyen.

Dressed in autumn

Pop-up coffee

Chodov Shopping Mall, Prague 4

Chodov Shopping Mall, Prague 4

MAX & Co., an Italian fashion brand offering traditional women’s elegance, lately opened its first boutique in Prague. Its autumn collection rides a wave of intriguing textures and prints in earth, golden and sapphire tones enlivened by floral patterns.

Nespresso has opened its latest Nespresso Boutique. And it has just about everything: a tasting area where you can try any and all of the 24 variations of Grands Crus coffee, as well as a recycling zone for handing in empty capsules. Did we say that they serve coffee too?

society Interns test savvy in real projects at Albert supermarkets firm

Photo: Provident Financial

Talented higher education students were invited to take part in Ahold’s ninth Summer Internship program undertaken at the headquarters of the international retail company. Ahold, which operates Albert supermarkets in the Czech Republic, gave the interns the opportunity to expand their knowledge and gain precious work experience during the summer months. Five selected students worked on actual projects together with managers from the departments of finance, communication and PR

Nimble Provident volunteers kept on toes at old folks’ home Photo: Ahold Czech Republic

A new straw nativity scene will feature during the Christmas season at the Břevnice Home for Seniors, near Havlíčkův Brod in Vysočina region. It was woven by volunteers from personal finance company Provident Financial, 23 of whom – drawn from the firm’s personnel department – arrived at the home to help the residents with all manner of tasks. These included autumnal activities required in the residence and its gardens. Windows were washed, garden sheds were painted, fences were fixed and sheep were chased. The latter activity was necessary to transfer the flock from grasslands to an insulated pen for winter ad ve r t i s i ng

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ký is taking Entrepreneur Daniel Křetíns of largest the majority ownership helm group EPH. Central European energy Biques Co-owners Patrik Tkáč and deals Ltd are departing in share worth more than one hundred billion crowns

Jan Stuchlík

T

he transaction will bring an end to an ownership structure which has seen CEO Daniel Křetínský Tkáč and business partner Patrik the of each hold 37.17 percent ký privately-h eld Energetic (EPH) a průmyslový holding priand the rest held by small rs grouvate equity shareholde of ped under Biques, an offshoot Banka. J&T bank ak Czech-Slov to 94 Křetínský’s stake will leap percent. two Tkáč will receive towards but that billion euros for his stake, billion could rise by up to a further and gas euros, depending on coal, growth in nuclear player EPH’s said. The coming years, the holding will receive passive Biques investors Under the more than a billion euros. Křetínský – new structure, 41-year-old Media Invest, Czech of co-owner a also E15 and CN the publishing house behind shareholder dominant the Invest – will be of his managers will while a selected group own six percent of EPH.

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16

diversions

Photo: Reuters

picture of the week

Hockney turns the page with oversized tome A Frankfurt Book Fair highlight was 79-year-old British artist David Hockney’s presentation of a Sumo-sized large-format monograph, A Bigger Book, a 500-page, career retrospective of his work published by Taschen. It is limited to 10,000 signed copies, 9,000 of which are Collector’s Edition books which, priced at EUR 2,000, come complete with a designer easel. Yorkshireman Hockney, praised for his openness to new media, helped introduce the fair’s THE ARTS+ program, dedicated to creative and cultural industries fuelled by 3D, artificial intelligence, virtual reality, augmented reality, and other trends

invitations GIG

DJ PARTY

CINEMA

TRIP TIP

Walls & Handbags, La Fabrika, Prague

The Cat Empire, Lucerna

BE24: Seth Troxle

American Honey (2016)

Konopište chateau

There’s a wall. It tests our courage and lets our imagination run riot. Then there’s baggage, full of long lost childhood wishes. A boy and five men try to revive boyhood fantasies found behind the wall… A Losers Cirque Company production. 24 October.

The genre-bending Australian outfit, known for a chaotic and fiercely uplifting live show, are difficult to describe and impossible to categorise. Their 25 October show at the Prague venue partly draws from new album Rising With The Sun.

Michigan native DJ Troxler is billed as awesomely larger than life. A modern Merry Prankster, he’s spun a sunrise set for a happily debauched Robot Heart party and lifted an Ibiza crowd with a lysergically spiked Prince-inspired track. Roxy. Prague. 27 October.

Star, a teenage girl with nothing to lose, joins a band of misfits in a travelling magazine sales crew. A whirlwind of hard partying, law bending and young love follow as they criss-cross the Midwest. Various cinemas.

Renowned as the last residence of Austria’s assassinated Archduke Franz Ferdinand (the bullet that killed him is on show), this converted-Baroque chateau is located in Benešov 50 km from Prague. See the rich Rococo banquet hall and Late Gothic art in the chapel.

Photos: Archive

DANCE PRODUCTION

About us. E15 Weekly is one of a group of business and economics-oriented publications printed by CN Invest a. s. It is a sister title to the E15 daily. Both periodicals, as well as a number of others, came under new ownership in the spring of 2016 when part of a portfolio formerly published by Mladá fronta a. s. was acquired. CN Invest a. s. publishes a broad range of print and online titles. In addition to other business-minded titles, the company also publishes lifestyle and women’s magazines (Maminka, Dieta, Moje psychologie) and children’s titles (Mateřídouška, Sluníčko). The publishing house also enjoys a considerable presence in the segment of technical and men’s online titles. CN Invest, and its sister company CZECH NEWS CENTER a. s. (the biggest publishing house in the Czech Republic, with titles such as Blesk, Reflex, Svět motorů, ABC), are members of the media concern CZECH MEDIA INVEST a. s.