THE CONSTRUCTION INDUSTRY OF CZECHOSLOVAKIA 1947-60

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• Document Creation Date: December 23, 2016
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• Sequence Number: 2
• Publication Date: September 16, 1957
• Content Type: REPORT

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N? 62
ECONOMIC INTELLIGENCE REPORT
THE CONSTRUCTION INDUSTRY
OF CZECHOSLOVAKIA
1947-60
CIA/RR 104
16 September 1957
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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ECONOMIC INTELLIGENCE REPORT
THE CONSTRUCTION INDUSTRY OF CZECHOSLOVAKIA
1947-60
CIA/RR 104
(ORB Project 47.1774)
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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CONTENTS
Page
Summary 1
I. Position in the Economy 3
II. Organization 5
A. Government Control 6
B. Division of Responsibility 7
III. Postwar Construction 9
IV. Construction in Major Economic Sectors 15
A. Industry 15
B. Electric Power 19
C. Transportation 22
D. Housing. 23
V. Major Inputs
A. Manpower
B. Materials
VI. Equipment and Technology
VII. Conclusions
Appendixes
28
28
31
33
36
Appendix A. Construction Enterprises Subordinate to the
Czechoslovak Ministry of Construction and to
the Slovak Commissariat of Construction . . . 39
Appendix B. Methodology
43
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Tables
1. Socialized and Private Enterprises and Employees in
Construction in Czechoslovakia, 1949
Page
5
2. Distribution of Construction Output in Czechoslovakia
During the Two Year Plan, 1947-48 11
3. Distribution of Construction Output in Czechoslovakia
During the First Five Year Plan, 1949-53 12
4. Volume and Growth of Construction in Czechoslovakia)
1938 and 1947-56 13
5. Average Utilization Time of Machinery and Equipment in
Construction Work. in Czechoslovakia, 1953-55
6. Volume of Housing Construction in Czechoslovakia,
1948-56
15
24
7. Number and Average Size of Dwelling Units and Total
Area of Housing Constructed by the State in Czecho-
slovakia, 1948-55 26
8. Manpower in the Construction Industry of Czechoslovakia,
1947-56 29
9. Production of Cement and Bricks in Czechoslovakia,
1937 and 1948-56 32
10. Consumption of Materials and Period of Construction in
Standard and Prefabricated Construction in Czecho-
slovakia
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THE CONSTRUCTION INDUSTRY OF CZECHOSLOVAKIA*
1947-60
Summary
Construction in Czechoslovakia was sharply curtailed during the
German occupation in World War II. The Germans concentrated on the
repair of war damage, the conversion of plants to war production,
the Shifting of plants to reduce their vulnerability to air attack)
and a limited amount of industrial construction. Construction of
housing virtually ceased. As a result of the reduced volume of con-
struction, large numbers of construction Workers left the construc-
tion industry for other employment, leaving the industry in the early
postwar years with a labor force less than half as large as that in
prewar years. With the beginning of economic planning in 1947, the
industry was nationalized and rapidly expanded, and employment in
construction rose from 161,000 in 1947 to 364,000 in 1953, where it
has since been stabilized.
The construction industry has played a significant role in the
economic development of Czechoslovakia since 1947. During 1947-53,
construction accounted for more than 60 percent of total fixed capital
investment, and its relative share of the national income rose from
4.7 percent in 1948 to 8.1 percent in 1953. During the Two Year Plan
(1947-48), housing and public works received the largest share of con-
struction resources. Industrial construction was limited largely to
the rehabilitation of basic industries which suffered war damage or
capital depletion during the occupation and did not significantly al-
ter the existing balance between light and heavy industry. Indus-
trial expansion proceeded rapidly with the beginning of the First Five
Year Plan (1949-53), with the major emphasis on development of heavy
industry as opposed to light and consumer goods industry. Expansion
and new construction of facilities for heavy industry since 1948 have
fundamentally altered the structure of industry in Czechoslovakia.
Within heavy industry, however, serious disproportions had developed
by the end of 1953. The machine building industry was expanded dis-
proportionately faster than the fuels, power, and raw materials bases,
* The estimates and conclusions contained in this report represent
the best judgment of ORB as of 1 July 1957.
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and production bottlenecks resulted. In 1954 and 1955 the rate of
expansion of the machine building industry was slowed as greater
attention was given to expanding the production base in the basic
industries, and this policy is continued in the Second Five Year
Plan (1956-60). The most glaring failure in construction since
1948 has been in the field of housing construction, which has suf-
fered from the higher priority accorded to industry in the alloca-
tion of construction resources. The backlog of demand resulting
from the curtailment of construction of housing during the war and
the growing urbanization accompanying industrial expansion combined
to create a serious housing shortage in urban areas) and this short-
age has prevailed throughout the postwar period. Because of adverse
effects on labor efficiency and stability, the shortage of housing
continues to be one of the most serious economic problems facing
the regime.
In response to the demands of reconstruction and development,
the volume of construction increased significantly after 1947. Out-
put in 1948 was 60 percent above the level of 1947, output in 1953
was 130 percent above the level of 1948, and output in 1956 was 18
percent above the level of 1953. Despite this significant growth,
however, the volume of construction has consistently failed to meet
the goals outlined in the economic plans. The major limitation to
further expansion of construction output has been a continuing short-
age of construction labor, particularly skilled labor. This shortage
has been particularly evident since 1953, when a peak was reached in
the size of the labor force. As a consequence, greater efficiency
and increased labor productivity have been the keys to continued ex-
pansion of construction output since 1953. The construction industry,
however, has failed to take full advantage of improved technology as
a means of increasing its output. Primarily because of poor organiza-
tion and management of construction work) machinery and equipment
(Which has been added in significant amounts) is inefficiently utilized,
poorly maintained, and in repair for excessive lengths of time. As
a result, the expected increases in labor productivity from increased
mechanization of construction work have not materialized.
The development of industrialized methods of construction (that
is, the use of prefabricated elements) has been a goal of the con-
struction industry since 1951. By 1955, however, only minor progress
had been made in applying the use of prefabricated elements in con-
struction, chiefly because of bureaucratic mismanagement. The ex-
perience gained since 1951 in the production and assembly of prefabri-
cated elements nevertheless affords the basis for a rapid expansion in
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the use of industrialized methods during the Second Five Year Plan.
Experiments have demonstrated that significant increases in labor
productivity as well as savings in materials and a reduction in con-
struction time can be achieved through the use of prefabricated ele-
ments. The Second Five Year Plan envisages a rapid increase in the
application of prefabricated elements in construction. The goal of
a 60-percent increase in construction output by 1960 compared with
1955 will depend to a large extent on the success of the construc-
tion industry in adapting its operations to industrialized methods
of construction.
I. Position in the Economy.
During World War II, construction in Czechoslovakia, except for
military purposes, was sharply curtailed. Building activity during
the war consisted mainly of conversion of plants to war production,
some industrial construction, repair of wai damage, and shifting of
plants to reduce their vulnerability to air attack. As a result of
this reduced volume of construction, large numbers of construction
workers were shifted to other types of employment. In 1947 the num-
ber of construction workers totaled only about 161,000 compared with
318,000 in 1930.
The demands of reconstruction and industrial development required
a rapid expansion of the construction industry, which assumed a vital
role in the postwar economic development of Czechoslovakia. After
1947 the Communist regime rapidly proceeded to nationalize the con-
struction industry, and by the middle of 1949 about 93 percent of all
construction workers had been organized into large, integrated con-
struction enterprises. Construction manpower rose to 228,000 in 1948
and reached a postwar peak of 365,000 in 1956.
The 228,000 workers employed in construction in 1948 represented
about 5.8 percent of the nonagricultural labor force. 1/* Because of
the demands placed on the construction industry by the First Five Year
Plan (1949-53), the number of workers in construction was?increased
faster than in nonagricultural employment as a whole, until in 1953
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construction workers accounted for about 7.7 percent of the nonagri-
cultural labor force. Employment in construction has remained rela-
tively stable since 1953, however, and in 1955 the construction sec-
tor employed about 7 percent of all nonagricultural labor. 2/
The requirements of postwar reconstruction, the program of in-
dustrialization, and the pressing need for housing combined to give
the construction industry an important investment role in postwar
economic development. Of total planned investment in the Two Year
Plan (1947-48)) about 55 percent was to be allocated for construction-
assembly work. Construction-assembly* work, however, actually ac-
counted for about 64 percent of investment over this 2-year period. 1/
During the period of the First Five Year Plan the share of construc-
tion in total investment declined to about 60 percent,II/ a figure
still considered excessive by the regime and high in relation to com-
parable figures in Western European countries. The principal causes
of this high ratio of construction to investment were (1) the tendency
to concentrate on large industrial projects which matured slowly;
(2) the tendency to have too many projects under way simultaneously,
with consequent delays at construction sites and failures to commis-
sion projects when planned; and (3) higher actual costs of construc-
tion than were envisaged in the economic plans. The share of invest-
ment devoted to construction probably declined in 1954 and 1955 as
more emphasis was placed on completion of projects under way and less
emphasis on starting new projects. According to the Second Five Year
Plan, investment is to increase faster than construction. Thus a fur-
ther drop in the share of construction in investment is to be expected,
provided the deficiencies noted above are corrected.
The relative contribution of the construction industry to national
income increased steadily from the end of World War II through 1953.
In 1953 the proportion of total national income contributed by the
construction industry was 72 percent greater than in 1948 and nearly
three times as great as in 1937. Net output of the construction
industry as a percent of national income is as follows
1937
1948
1949
1950
1951
1952
1953
3.0
4.7
5.5
6.4
6.9
6.9
8.1
* In the USSR and the European Satellites the cost of cOnstruction-
assembly includes the cost of installing production equipment (but
not the cost of the equipment) in construction costs.
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II. Organization.
The prewar construction industry in Czechoslovakia was composed
of a large number of small- and medium-sized private enterprises and
relatively few large private concerns. Of about 25,861 private enter-
prises in the construction industry in 1933, 520 were large corpora-
tions, 10,191 were partnerships, and the remainder were small per-
sonal types of organizations. Y
Nationalization of the industry proceeded rapidly after the Com-
munists came to power in 1948, with the emphasis on formation of
large, centrally directed enterprises. The nuMber of socialized and
private enterprises and employees in construction in Czechoslovakia
in 1949 is shown in Table 1. By the middle of 1949, about 93 percent
of total construction manpower in Czechoslovakia had been organized
Into 269 socialist enterprises. 7/
Table 1
Socialized and Private Enterprises and Employees in Construction
in Czechoslovakia
1949
Sector
Number of
Enterprises
Nutber of
Employees
Employment
(Percent
of Total)
Socialized
National
193
2145171
79.2
Communal
55
6,042
2.2
Cooperative
21
2,653
1.0
State and public adminis-
tration
27,993
10.3
Subtotal
250,859
92.7
Private
2,859
19,792
7.3
Total
3,128
270,651
100.0
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Of the 2,859 private firms still in existence on 30 June 1949, about
three-fourths employed fewer than 11 persons, and about one-third had
only 1 or 2 employees.kii?E/ In 1953 the socialized sector of the in-
dustry accounted for 99.7 percent of total construction output in
Czechoslovakia.
By the end of 1955 there were 210 large, national construction
enterprises and 350 local enterprises. In 1955, national enterprises
accounted for 81.2 percent of all construction by the socialized sec-
tor, local enterprises for 16.6 percent, and cooperatives for 2.2
percent. In addition to these enterprises, there were about 3,500
private builders operative during 1955. 12/
A. Government Control.
Under the Communist regime, control over all phases of the
planning and execution of construction in Czechoslovakia was cen-
tered at the ministerial level, a condition which resulted in serious
errors in planning and in reduced operational efficiency. Responsi-
bility for the planning and execution of investment construction was
widely dispersed among the various economic and defense ministries
and the kraj* national committees. Before October 1955, proposals
for investment projects in the various economic sectors apparently
were prepared in the responsible ministries and submitted to the
State Planning Commission for approval. Control of actual construc-
tion is similarly divided -- each ministry having responsibility for
investment projects maintains construction enterprises under its di-
rect control.
In an apparent move to insure better coordination of invest-
ment plans, a State Committee for Construction, with ministry rank,
was formed in October 1955. This committee was given authority to
coordinate investment plans and to exercise control over all major
aspects of construction for the national economy. 11/ In its work
of coordinating investment plans the State Committee for Construc-
tion is to cooperate closely with the State Planning Commission.
As in the USSR the creation of a supraministerial agency with cen-
tralized authority to coordinate and control all major construction
activity was apparently considered essential to the success of plans
for the development of heavy industry in the Second Five Year Plan. 12/
In addition to a chief and three deputy chiefs, the State Committee
* An administrative subdivision.
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for Construction has the following five departments, or administra-
tions: (1) mines) foundries, and power station construction; (2) in-
dustrial construction; (3) road construction; (4) residential and city
construction; and (5) legislative and organizational divisions. 22/
Simultaneously with the creation of the State Committee for Construc-
tion, control of construction activity was further centralized with
the formation of a Central Administration for Apartment and Public
Building to supervise the work of the building departments of the
National Committees and the local building enterprises. 12.1
Centralization of control over the planning and execution of
construction in Czechoslovakia, as well as in other European Satel-
lites, has generally resulted in the formulation of unrealistic plans
for investment in construction and has contributed to delays and
rising costs of construction. Planners in the economic ministries
have tended to be overly optimistic in formulating plans. The plans
have consistently underestimated the amount of resources required for
construction of investment projects, with the result that actual costs
exceeded planned costs. Thus building plans tended to be extravagant,
and more projects were started simultaneously than could be adequately
supplied with labor and materials. The resulting delays pushed con-
struction costs even further above Plan figures, so that the planned
physical volume of construction was often not achieved with allocated
investment funds.
Beginning in 1956, considerable attention was given to measures
to decentralize control over economic activity in order to give enter-
prise managers a greater voice in planning and management. Utiliza-
tion of enterprise managers' technical ability and knowledge of local
conditions should result in the more realistic formulation of construc-
tion plans. There is not yet, however, any concrete information on
the nature, extent, or effects of decentralization measures on the con-
struction industry in Czechoslovakia.
B. Division of Responsibility.
There is little definitive information on the division of re-
sponsibility in construction among economic ministries in Czechoslovakia
having jurisdiction over construction enterprises. In 1955, enter-
prises subordinate to the Czechoslovak Ministry of Construction and to
the semiautonomous Slovak Commissariat of Construction accounted for
about 50 percent of total construction output in Czechoslovakia. 12/
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The Czechoslovak Ministry of Construction is organized into
eight Main Administrations of National Enterprises with responsibili-
ties in the following fields: (1) construction of large industrial
combines, (2) other industrial constructions, (3) special construc-
tions (not identified), (4) residential and other public construction,
(5) engineering and hydraulic construction, (6) production and distri-
bution of construction materials, (7) terrain research, and (8) com-
mercial matters. lg The Slovak Commissariat of Construction is com-
posed of the following four Main Administrations of National Enter-
prises: (1) industrial construction, (2) engineering construction,
(3) residential and other construction, and (4) the manufacture of
construction materials. 1.7./
Each of these 12 main administrations has under its jurisdic-
tion a number of enterprises which perform construction work in the
administration's sphere of responsibility. Of the 210 national enter-
prises in Czechoslovakia in 1955, 51 were under the jurisdiction of
the Ministry of Construction and the Slovak Commissariat of Construc-
tion.* 1L3/ Four special enterprises at Ostrava, Trinec, Kosice, and
Svaty Kriz engage in construction of large industrial coMbines. In
addition, 10 other enterprises -- 6 in the Czech Lands (Bohemia and
Moravia) and 4 in Slovakia -- engage in other industrial construction.
A special enterprise with headquarters at Usti nad Labem engages in
construction of chemical plants. Two enterprises in the Czech Lands
and one in Slovakia operate in the mining, foundry, and electric power
fields. Other enterprises subordinate to the Ministry and the Com-
missariat engage in construction of apartment houses and workers'
settlements, transportation facilities, and engineering and hydraulic
Installations. 157
There are numerous scattered references to operations of na-
tional construction enterprises subordinate to other economic minis-
tries. Available data do not permit, however, any tabulation of the
number of enterprises subordinate to each ministry or their specific
functions. The 350 local construction enterprises probably engage
for the most part in construction of housing and of communal and
municipal facilities for their particular districts. It is also likely
that, as in certain other Satellite countries, the local enterprises
are available to the Czechoslovak Ministry of Construction and Minis-
try of Defense for work on projects of national significance within
their districts.
* For a detailed list of national construction enterprises subordinate
to the Czechoslovak Ministry of Construction and the Slovak Commissariat
of Construction, with their functions and locations, see Appendix A.
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The Ministry of Defense controls the planning and execution
of military construction and the construction of civil defense in-
stallations for the military. Construction plans for military in-
stallations are prepared by the Institute for Military Projects of
the Ministry of Defense.1510./ Actual construction is directed by
the Directorate General of Military Construction, which collaborates
closely with headquarters of the technical battalions supplying man-
power for military projects. The Ministry of Defense also has the
following national construction enterprises at its disposal 21/:
1. Konstruktiva, a combined military-civilian enter-
prise with headquarters at Prague and a number of branches through-
out the country.
2. Posista, at Plzen, a special enterprise for the
construction of airfields.
3. Armabeton, at Prague and Olomouc, engages in con-
struction of border fortifications and military warehouses.
4. Armaprojekt, at Bratislava and Kosice, engages in
airfield and other military construction.
5. Armastav, at Plzen.
6. Severostav, at Hradec Kralove and Liberec.
7. Marastav, at Pterov.
8. Stavoindustria, at Bratislava.
III. Postwar Construction.
By the end of World War II the construction industry of Czecho-
slovakia had been reduced to only a small fraction of its prewar
strength, and construction activity in 1945 and 1946 was at a virtual
standstill. With the advent of organized economic planning under the
Two Year Plan, construction manpower was expanded rapidly and the
volume of construction increased sharply.
The Two Year Plan called for construction output of 51.7 billion
koruny (in Plan prices of 1 January 1947).* Z2/ In 1948 it was
* Figures in koruny can be converted to US dollar equivalents at the
rate of 50 koruny to US $1. On 1 June 1953 the koruna was revalued
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planned that construction would total 29.2 billion koruny,/ about
22 percent above the estimated value of construction in 1938. ForFor
the 2-year period, however, the Plan was fulfilled by only 77.4 per-
cent. The planned and actual volumes of construction during the Two
Year Plan in prices of 1 January 1947 are as follows 61:
Value
(Billion 1947 Koruny)
Year
Planned
Construction
Actual
Construction
Percent
of Fulfillment
1947
22.54
15.41
68.4
1948
29.20
24.66
84.5
Total
51.74
40.07
77.4
Construction in 19Y7-48 was directed mainly toward housing and
public works rather than toward industrial expansion. Industrial
construction was largely limited to rehabilitation of such basic in-
dustries as coal, power, iron and steel, and the manufacturing in-
dustries which suffered capital depletion during the German occupa-
tion. Industrial construction accounted for only 18.9 percent of
total construction output in 1947-48, with slightly over half of all
industrial construction for the light and consumer goods industry. 2.2/
The greatest single effort was directed to relieving a shortage in
housing caused by wartime destruction and a backlog of demand result-
ing from the sharp curtailment of housing construction during World
War II. Housing construction accounted for slightly more than one-
third of total construction in 1947-48. g?./ The distribution of con-
struction output among major economic sectors during the Two Year Plan
is shown in Table 2.*
The First Five Year Plan provided for capital investment of 336.2
billion koruny, of which construction was to account for 176.9 billion
koruny, or 52.6 percent. 2// As was true during the Two Year Plan,
and the official rate was set up at 7.20 koruny to US $1. These are
not market-determined rates but are official rates set by the govern-
ment and may not reflect the true dollar value of the currency.
* Table 2 follows on p. 11.
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Table 2
Distribution of Construction Output in Czechoslovakia
During the Two Year Plan 2/
1947-48
Percent
Sector
1947
1948
Planned
Industry
14.5
21.6
18.9
Agriculture
3.2
3.2
3.2
Transportation
20.3
15.5
17.2
Housing
33.3
34.4
34.0
Public works
28.7
25.3
26.7
Total
100.0
100.0
100.0
and largely for the same reasons, this planned ratio of construction
to investment was exceeded, with construction accounting for about
60 percent of capital investment.
During the First Five Year Plan, emphasis was shifted from develop-
ment of light industry, which had supported a relatively high living
standard and provided the principal exports to the West, to develop-
ment of heavy industry. According to the original version of the First
Five Year Plan published in 1948, industrial construction was to account
for 25.2 percent of total construction output as compared with 18.9
percent during the Two Year Plan. The share of total construction
going to agriculture was increased to 6.7 percent as compared with 3.2
percent during the Two Year Plan, whereas the proportion of total con-
struction going to housing and transportation was to decline. The
planned distribution of construction output during the First Five Year
Plan is given in Table 3.*
The.originAl goals of the First Five Year Plan were revised upward
sharply in 1951 after the outbreak of the Korean War. The original
goal for capital investment was increased to 558 billion koruny, and
* Table 3 follows on P. 12.
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Table 3
Distribution of Construction Output in Czechoslovakia
During the First Five Year Plan 2/
1949-53
Sector
Value
(Billion Koruny)
Percent
Industry
44.6
25.2
Public works
41.1
23.2
Housing
39.3
22.2
Transportation
23.1
13.1
Institutional public
buildings
14.4
8.1
Agriculture
11.8
6.7
Trade and other services
1.9
1.1
Building industry
0.7
o.4
Total
176.9 100.0
the structure of investment was altered to increase the emphasis on
development of heavy industry, particularly engineering. 30/
In the economic Plans for 1954 and 1955, under
the impetus of the new course," the growth rate of heavy industry
was reduced, and a larger share of investment funds was applied to
housing, agriculture, and other measures to improve living standards.
The new Five Year Plan beginning in 1956, however, restores the pri-
ority position of heavy industry in the development of the economy.
Data on the actual value of construction output achieved in the
various sectors since 1948 are not available. The relatively low
degree of Plan fulfillment in housing and agricultural construction
in comparison with over-all Plan fulfillment indicates, however, that
scarce construction resources were probably diverted from these areas
to targets in industry having higher priority. Thus it is likely that
industry received a larger share of construction output than was en-
visaged in the economic Plans.
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The construction industry in Czechoslovakia has achieved a sig-
nificant growth in volume of construction output since 1947. Con-
struction output increased by 60 percent from 1947 to 1948. An
increase in output of 130 percent was achieved during the First Five
Year Plan, and in 1956 a further increase of 18 percent above the level
of 1953 was achieved. The volume and growth of construction in Czecho-
slovakia, 1938 and 1947-56, is shown in Table 4.
Table 4
Volume and Growth of Construction in Czechoslovnkia
1938 and 1947-56
Year
Index 2/
(1955 = 100)
Value,
(Billion Koruny) 12/
Percent of Increase
over Previous Year
1938
42 2/
7.7 ii/
1947
25 2/
4.6 :4/
1948
4o
7.3
6o
1949
51
9.4
28
1950
61
11.2
20
1951
67
12.4
10
1952
80
14:6
19
1953
92
16.8
15
1954
96
17.6
5
1955
100
18.3
4
1956
109 2/
20.0 1/
9 si
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b. Believed to be in terms of 1953 prices, because the in-
crease in 1953 above the level of 1948 in the preceding
source is identical to that given in the 1949-53 Plan ful-
fillment report, which was given in 1953 prices. (See
Methodology, Appendix B.) On 1 June 1953 the koruna was
revalued, and the official rate was set at 7.20 koruny to
US $1.
d. See Methodology, Appendix B.
e. 3121
f.
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Despite the continued growth in construction output, the construc-
tion industry persistently failed to fulfill its Plan goals. Only
in 1952 and 1953 is there any evidence that the construction plan was
fulfilled. Plan fulfillment reports for these years indicate fulfill-
ment by enterprises subordinate to other ministries. The degree of
fulfillment of the plan for construction output in 1950-51 and 1954-55
is as follows:
1950 1951 1954 1955 1956
95.0 E./ 92.5 .3a/ 94.5 12& 93.0 112/ 92.0*
Failure by the construction industry to fulfill Plan goals is to
some extent a reflection of the unrealistic goals assigned it by the
economic planners. The practice of having simultaneously more projects
under construction than could be adequately supplied with the necessary
resources resulted in numerous delays in construction. Probably more
significant, however, were poor organizational work in the industry, a
high rate of labor turnover, and excessive absenteeism, along with
shortages of materials. The industry failed to make the most efficient
utilization of resources and thus failed to achieve the desired levels
of productivity. This failure is clearly illustrated by figures in
Table 5** which show the average utilization time of machinery and equip-
ment on construction in Czechoslovakia, 1953-55.
Perhaps more significant than the low rate of utilization of ma-
chinery shown above is the failure to achieve any significant improve-
ment for most types of machinery from 1953 to 1955. This failure to
utilize efficiently available machinery can be attributed to poor or-
ganization of construction work, inadequate maintenance, and the ex-
cessive time required for repairs. 12./
The Second Five Year Plan calls for an increase in the over-all
volume of construction of 60 percent by 1960. The construction
enterprises of the Ministry of Construction are apparently to assume
a greater role in the industry because the planned increase in out-
put for these enterprises is 85 percent.11.3/ About four-fifths of
the increase in total output is to be achieved by increased labor
Co uted from the planned increase of 18 percent in 1956
and the actual increase of 9 percent shown in Table 4
13, above .
Table 5 follows on p. 15.
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Table 5
Average Utilization Time of Machinery and Equipment
in Construction Work in Czechoslovakia a/
1953-55
Percent
Type of Machinery
1953
1954
1955
Shovel excavators
46.7
43.9
49.9
Scrapers
43.2
35.2
34.6
Bulldozers
50.0
46.2
53.9
Dumpers
42.3
32.2
33.6
Cement mixers (over 500 liters)
37.7
33.2
35.3
Loaders
35.3
44.7
49.5
Unloaders
24.9
29.8
33.6
Cranes
51.8
52.9
51.9
a. S
productivity, which must rise by 54 percent according to the Plan.
It is planned to increase the number of workers in construction by
only 20 percent by 1960. LW
IV. Construction in Major Economic Sectors.
A. Industry.
Certain branches of heavy industry in Czechoslovakia, particu-
larly machine building, were expanded by the Germans during World War II
to produce war materials. Production of consumer goods, on the other
hand, was restricted, so capital depletion in consumer goods industries
was not large. These developments, together with the exodus of the
Sudeten Germans, left Czechoslovakia at the end of the war with a rela-
tively high per capita stock of capital. Thus the need was not
felt for an extensive program to develop industry in the earlier years
of economic planning, and a greater portion of new investment was di-
rected to housing, public works, and light industry than in the other
European Satellites.
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The program of industrial expansion initiated by the First
Five Year Plan required a construction effort of considerable magni-
tude, with the major emphasis on construction of facilities for heavy
industry. Expansion and new construction of production facilities in
heavy industry have fundamentally altered the structure of Czechoslovak
industry. By 1953, production in the machine building industry had
increased 3.3 times above 1948 production, compared with an increase
In gross industrial production of 102 percent.11(SI/ In addition to
the reconstruction and expansion of existing plants, 24 new machine
building plants were constructed during the First Five Year Plan
alone. 119/
Production capacity in the metallurgical industry was expanded
significantly during the First Five Year Plan. Partly through improved
production technique, but for the most part through the construction
of new capacity, production of major products in ferrous metallurgy was
increased during the First Five Year Plan as follows: pig iron, 69 per-
cent; raw steel, 67 percent; rolled materials, 73 percent; steel tubing,
74 percent; and ferroalloys, 380 percent. 22/ In 1949-53, 6 blast fur-
naces, 9 open hearth furnaces, 8 electric furnaces, 6 roll trains) 2
pipe rolling stands, and other equipment were constructed and put into
operation. 21/ The most important construction project in the field
of ferrous metallurgy was the Nove Hate Klementa Gottwald Iron and
Steel Works at Kuncice, near what is presently the largest such works
in the country at Vitkovice. This project is to be expanded during
the Second Five Year Plan (1954-58) to become the largest iron and
steel works in Czechoslovakia. 22/ Construction of another large
metallurgical combine at Kosice, in Eastern Slovakia, was started dur-
ing the First Five Year Plan. Economically this projected combine
was poorly located in an area having only soft coal and no large de-
posit of iron ore. Furthermore, difficulties in construction resulted
from the fact that the soil was unsuitable for the heavy structures re-
quired for the project. 2.3/ Construction activity was curtailed in
1953, and early in 1954 technicians at the project were assigned to
other projects,211/ indicating that construction may have been perma-
nently abandoned. Significant achievements in the development of
nonferrous metallurgy since 1948 include the construction of an alumi-
num factory at Svaty Kriz nad Hronom, the first in Czechoslovakia, 22/
and a large magnesium plant in the Gemer region of central Slovakia. 2g
A significant portion of industrial construction since 1949 has
been that for the chemical industry, which by the end of the First Five
Year Plan had increased its production 138 percent above the 1948 level. 21/
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A plastics plant at Bratislava, a cellophane and paper factory at
Ruzomberok, and an oxygen plant at Podbrezova were constructed dur-
ing the First Five Year Plan, and a plant at Novaky producing poison
gas, plastics, and caustic soda was expanded. In 1952, construction
was started at Podunajske Biskupice, near Bratislava, on what is to
be the largest refinery in Czechoslovakia. 2?/ Two new factories for
the production of synthetic fibers were constructed, and a number of
others were rebuilt or expanded. 22/ In 1955 a large cellulose plant
to produce cellulose from beechwood was put into operation in Hencovce. ?.2/
In addition, new facilities were provided for the production of peni-
cillin and other drugs, sulfuric acid, and phosphate and nitrogenous
fertilizers.
A serious shortcoming in the industrial buildup of Czecho-
slovakia during the First Five Year Plan was the failure to increase
production in the basic materials and power industries sufficiently
to meet the needs of an expanding industrial economy. This failure
reflects both deficiencies in planning and construction work and the
higher priority assigned to machine building and metallurgy in the
allocation of construction resources. In the mining of coal and iron
ore the primary emphasis was given to mechanization and to improving
the efficiency of utilization of existing facilities. Planned
construction in the coal mining industry, although relatively small,
was only 70 percent fulfilled during the First Five Year Plan.
The regime has attributed the low fulfillment of the construction
plan largely to a lack of proper geological research and to poor
performance by the construction industry. It is probable, however,
that an unwillingness to divert construction resources from the pri-
ority sectors of machine building and metallurgy was a significant
factor contributing to the underfulfillment of the plan. Increases
in capacity in coal mining were accomplished mainly by reconstruction
and expansion of existing facilities. Only 2 brown coal mines and 1
lignite mine were constructed and put into operation during the First
Five Year Plan. ?.3./
Beginning in 1954, measures were taken to overcome the serious
production lags which had developed in basic industries as a result
of the priority given to the development of the machine building in-
dustry. In 1954 and 1955 the rate of development in machine building
was reduced, and. greater attention was directed to building up the
fuels, power, and raw materials base. gl./
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Although a large number of new installations have been con-
structed for light industry, this sector has consumed a minor portion
of construction resources since 1948. A significant portion of con-
struction activity in this sector has been devoted to mechanization
and installation of new equipment in existing plants rather than to
construction of new facilities. Among the more important new instal-
lations constructed for light industry were 5 flax-breaking plants
and 2 flax-retting plants) among others, for the textile industry.
For the woodworking industry, eight sawmills and a number of facili-
ties for the manufacture of furniture were constructed. The construc-
tion of 10 large freezing plants, 46 operational refrigeration plants,
30 dairies, 5 milk-drying plants) 9 large slaughterhouses, 7 large
bakeries, and 1 sugar factory helped to promote an increase in pro-
duction by the food industry of 83 percent during the First Five Year
Plan.
The Second Five Year Plan continues the emphasis on expanding
production in heavy industry as the basis for the rapid development
of the national economy. The previous pattern of investment in heavy
Industry is altered, however, to favor the buildup of basic industries.
Planned increases in production by the machine building industry are
to be accomplished mainly by increased mechanization and specializa-
tion of production rather than by construction of new capacity. Dur-
ing the Second Five Year Plan the basic task of investment construc-
tion is to provide new productive facilities for the fuel, power,
chemical, iron and steel, and building materials industries.
Planned investment in these basic industries is more than 80 percent
above actual investment in the period 1951-55, compared with an in-
crease in total planned investment of 61.5 percent. .1./
The Second Five Year Plan calls for a volume of investment
In the solid fuels industry 115 percent greater than in the period
1951-55.pi Planned construction includes 6 new mines for coking
coal and coal washing plants in the Ostrava-Karvina region. Ten
new mines are to be constructed in the Most area. In the Sokolovo
district, 3 coal mines, 1 sorting plant, and 2 briquette plants are
to be built. In addition, 9 lignite mines are to be constructed in
southern Moravia and 4 in Slovakia.
In the metallurgical industry, 6 rolling mills with a capacity
of 1.3 million tons,* a pipe mill with a 70,000-ton capacity, 2 blast
* Tonnages are given in metric tons throughout this report unless
otherwise indicated.
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furnaces) 5 open-hearth furnaces, and 2 coke batteries are to be
constructed during the Second Five Year Plan. In addition, con-
struction will begin on a continuous sheet rolling mill and a plant
for production of cold rolled strips. 22/ Of the above installations,
the 2 blast furnaces, the 5 open-hearth furnaces, the 2 coke bat-
teries) and 4 rolling mills will be constructed at the Rove Hute
Klementa Gottwald Plant at Kuncice. /1/
Construction of the refinery at Podunajske Biskupice, which
was started in 1952, will continue to be a priority project of the
chemical industry during the Second Five Year Plan. Present plans
can for the first section of the refinery to begin operations in
January 1958, but the entire combine will not be completed until
1962. 2E/ Another priority objective is the completion of the Slovak
National Uprising Plant for the production of alumina at Ziar nad
Hronom, near the new aluminum plant at Svaty Kriz nad Hronom. 2.3./
Production of synthetic fertilizers will be substantially increased
by the construction of new plants to produce ammonia and phosphate
and nitrogenous fertilizers. 2i+/ Among other important construction
projects planned for the chemical industry are a plant for production
of polyamide fibers for the textile industry, a cord silk plant at
Lovosice, a plant for the production of synthetic rubber, and a ben-
zol and tar-processing plant.
B. Electric Power.
The rapid industrial expansion in Czechoslovakia since World
War II has required an extensive construction program to increase
the capacity for production of electric power. Primarily through
the construction of new powerplants, the production of electric power
was increased roughly two and one-half times between 1945 and 1955.*
In 1948, the last year of the Two Year Plan, production reached 7.7
billion kilowatt-hours (kwh), about 74 percent more than in 1945. I.6./
By 1955, production of electric power had reached 15.0 billion kwh,
about 95 percent more than in 1948. 12/
Although capacity for generating electric power has been in-
creased substantially, production throughout the postwar period has
* Figures for the increase in installed capacity, if available, would
be a better measure of the extent of construction activity, because
production figures reflect changes in utilization time of equipment.
It is believed, however, that annual utilization time did not change
significantly, and that production figures reflect reasonably accurately
the relative increase in installed capacity.
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failed to meet the requirements of the economy and the population.
This failure has most often been attributed by the authorities to
weaknesses in the construction industry. A common complaint has
been that construction time is too long and that new plants are not
put into operation when planned. Such basic weaknesses in the con-
struction industry as poor organization of work, absenteeism, labor
turnover, and inefficient use of equipment have been limiting factors
in electric power construction as in all other types of construction.
The electric power sector, however, offers a particularly good example
of the harmful effects of overplanning. Relatively large amounts of
manpower and materiala are required for construction of electric
powerplants, particularly hydroelectric powerplants. Supplies of
construction manpower and materials were not sufficient to assure
continuous operation on the numerous plants under construction simul-
taneously. The results were delays in construction, higher costs
than anticipated, and failure to commission projects Wen planned.
Furthermore, completion of projects was sometimes delayed by the in-
ability of the machine building industry to deliver the necessary
equipment.
During the Second Five Year Plan, measures are to be taken
to overcome the bottleneck in production of electric power. A greater
proportionate share of construction effort and resources than in pre-
vious years is to be devoted to construction of power facilities, and
the production of power-generating equipment is to be increased to
supply the new facilities. /IN The Plan calls for the construction
of 2,300 megawatts (mw) of new capacity in the period 1956-60, there-
by enabling an increase in production of electric power of 68.5 per-
cent to more than 25 billion kwh in 1960. 12V
Thermal electric powerplants constitute the bulk of the new
electric power capacity constructed and put into operation through
1955. Thermal electric plants have provided nearly nine-tenths of
total production of electric power throughout the postwar period. Pcii
In addition to numerous small plants to supply individual industrial
enterprises, six large thermal electric powerplants were constructed
before the beginning of the Second Five Year Plan. Among these the
most important were at Porici (Pond i I), Hodonin (Hodonin I), Novaky
(Novaky I), and Bron. 81/
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The largest thermal electric powerplant in Czechoslovakia, with a capac-
ity of 300 megawatts, is to be constructed at Opatovice. The first
50-mw turbo-aggregate is scheduled to go into operation at this plant
In 1959. gl/
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During the First Five Year Plan, Czechoslovakia initiated a
long-range program for development of its unharnessed potential for
production of hydroelectric power. Between 1949 and 1955, construc-
tion of a number of major hydroelectric projects was started, mainly
on the Vltava and Vah Rivers. Of 6 hydroelectric powerplants con-
structed before 1956, the 2 most important were a plant at the Slapy
Dam on the Vltava and another on the Orava River, a tributary of the
Vah. /92/ The Slapy plant, with a capacity of from 120 to 140 mw, is
the first hydroelectric plant in Czechoslovakia with a capacity of
more than 100 mw. 132/ On the Vltava, major hydroelectric powerplants
are presently under construction at the Lipno and Orlik dams. The
Lipno plant, to be completed during the Second Five Year Plan, is to
have a capacity of 120 mw. 1im?/ Initial operations at the Orlik plant,
which will be the largest in Czechoslovakia, are scheduled to begin
in 1961.
Extensive development of hydroelectric power has been under
way on the Vah River to improve the power supply in Slovakia. Under
construction at the beginning of 1956 and scheduled for completion
during the Second Five Year Plan were plants at Nosice, Skalka,
Krpelany, and Sucany, with a combined capacity of 140 mw. E11/ Major
powerplants are to be constructed and put into operation on the Vah
at Lipovec and Madunice during the Second Five Year Plan. In addi-
tion, the Hricov, Miksova, and Povazska Brystrica cascades on the
Vah and the accompanying Ruzin hydroelectric powerplant are to be
developed during the Second Five Year Plan. i3_2/
The program of hydroelectric power construction, although
Impressive, will not significantly alter the proportions of total
power supplied respectively by hydroelectric and thermal electric
powerplants by 1960. New plants planned for completion during the
Second Five Year Plan will increase the installed capacity of hydro-
electric powerplants by only about 400 mw, 22/ or about 17 percent
of the total planned increase in electric power capacity of 2,300 mw.
Considerable advantage could have accrued from a more rapid
development of production of hydroelectric power in the form of lower
production costs per kilowatt-hour and, more significantly perhaps,
reduced pressure on overburdened coal supplies. As a matter of
economic necessity, however, the development of hydroelectric power
has had to be pursued as a long-range project. The rate of expansion
of hydroelectric power facilities has probably been controlled largely
by the following two considerations: (1) hydroelectric plants require
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more manpower and materials for constructed units of installed capac-
ity, a longer period of construction, and higher initial costs than
do thermal electric plants; and (2) with the shorter period required
for construction, thermal electric plants could more quickly meet the
pressing demand for electric power.
C. Transportation.
Increases in the volume of rail traffic in Czechoslovakia
since the end of World War II have been accomplished mainly through
improved efficiency of operations and greater utilization of exist-
ing facilities. In Czechoslovakia, as in the other European Satel-
lites, the practice has been to achieve the maximum degree of utili-
zation with the least possible capital outlay. From the end of the
war until 1955, there was no appreciable expansion of the railroad
network in Czechoslovakia. 21/ Construction activity in rail trans-
port has been directed primarily to strengthening, modernizing, and
double tracking existing lines rather than to construction of new
routes. Economically, the most important achievement was the double
tracking of the "Friendship Line" from Zilina in western Slovakia
to Cierna on the Soviet border. 2?./ Before World War II the only
direct rail connection between eastern and western Czechoslovakia
was the single-track, low-capacity line between Zilina and Kosice.
Construction of the second track of the "Friendship Line" was com-
pleted in 1955 23/ and provided a first-class east-west link between
Prague and Cierna. In view of the industrialization of Slovakia
and the reorientation of Czechoslovak foreign trade toward the USSR,
the "Friendship Line" is of major economic importance.
During the First Five Year Plan a program for electrification
of railroads was begun, but no great progress had been made by 1955.
The only major section electrified was the 165-kilometer (km) section
of the "Friendship Line" between Zilina and Spisska Nova yes. This
project was started in June 1949 and commissioned in February 1956. 211./
Electrification of the 165-km Prague - Ceska Trebova line (a part of
the Prague-Cierna line) was started in 1951 and was sdheduled for
completion in 1954. 22/ Numerous difficulties were encountered in
construction, however, and electrification of this line is now scheduled
for completion in 1958. 2?/
Construction in the field of rail transportation during the
Second Five Year Plan will be concentrated on electrification and
continued improvement of existing lines. The Plan calls for
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the electrification of 750 km of railroad lines in the period 1956-
6o. 21/ Effort will be directed mainly to the electrification of
the entire Prague-Cierna line, which is to be completed by 1960. 2?/
Other lines to be electrified include the following: Hranice-Bohumin,
Prague - Usti nad Labem, Usti nad Labem - Nymburk - Kolin, and
Nymburk-Poricany. 22/ During the Second Five Year Plan) new rails
capable of withstanding axle loads of from 18 to 20 tons are to be
Installed on 3,860 km of line, 122/ and automatic block signaling is
to be installed on 282 km of line.Th
11/ e yearly volume of genera].i
repair of lines is to increase from 00 to 900 km during the Second
Five Year Plan. 102/
Construction of new highways in Czechoslovakia since the end
of the war has been of only minor significance. Activity has been
confined almost entirely to modernization, improvement, and main-
tenance of the existing road net, a pattern which is to continue dur-
ing the Second Five Year Plan. Principal measures planned for improve-
ment of the highway net in the period 1956-60 are the paving of 15)000 km
of roads, improvement of 50 percent of the existing gravel roads, and
increasing the percentage of dust-free roads from 24 percent to 26 per-
cent of the road network. 103/
D. Housing.
Czechoslovakia faced a serious housing shortage at the end of
World War II. War damage to housing was comparatively light, amount-
ing to only about 3 to 4 percent of existing housing stocks. The
major cause of the shortage was the almost complete halt of renova-
tion and new construction during the war years. As a result of the
rapid industrialization of Czechoslovakia in the postwar years, the
shortage of housing became particularly acute in urban areas, as
workers migrated from the countryside to the growing industrial centers.
The continuing shortage of housing, because of its adverse effects on
labor efficiency and stability, is a major economic problem confronting
the regime in Czechoslovakia.
The most significant failure of the construction industry in
Czechoslovakia since the war, in terms of Plan fulfillment, has been
In the field of housing construction. New housing constructed since
1947 has fallen far below the needs of the country as estimated in
the economic plans. Not until 1952 did the dwelling units constructed
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reach the level of the immediate prewar years.* Available statistics
Indicate that the number of dwelling units made available in the en-
tire postwar period has kept pace only with the needs created by
population growth. Moreover, the major indexes of quality of housing
size of apartments, residents per apartment, residents per room, and
average area per resident -- declined between 1950 and 1955. 121114/
The bulk of all housing constructed in the postwar period
has consisted of workers' housing (apartments or dwelling units) con-
structed by the socialized sector, primarily in industrial areas.
Failures in the state housing construction program led, however, to
increased emphasis on private construction by individuals beginning
in 1954. The total volume of housing constructed in Czechoslovakia,
1948-56, is Shown in Table 6.
Table 6
Volume of Housing Construction in Czechoslovakia 2/
1948-56
Thousand Dwelling Units
Year
State Sector
Private Sector
Total
1948
11.9
9.8
21.7
1949
19.6
9.5
29.1
1950
29.1
9.1
38.2
1951
22.3
8.6
30.9
1952
30.3
8.9
39.2
1953
29.7
9.3
39.0
1954
27.8
10.4
38.2
1955
35.2
15.4
50.6
1956
32.0 12/
17.0
49.0 h/
a. 102/. These data do not represent net additions
to housing stock, because no account is taken of with-
drawals. Czechoslovak figures reveal, for instance,
that in 1950-55, 1 dwelling unit was wrecked for
every 5.7 which were built. 106/
b. 107/
* The number of dwelling units constructed in 1950 actually reached
the prewar level, but declined sharply in 1951. Only since 1952 has
the number of units constructed equalled or surpassed the prewar level
on a sustained basis.
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Plan goals for construction of workers' housing by the social-
ized sector have been underfulfilled by substantial margins since
1950. The original version of the First Five Year Plan called for
construction of state housing at the average rate of 26,000 dwelling
units per year, 12L3/ a goal which assessed fairly realistically the
capabilities of the construction industry. As indicated in Table 6,*
new construction by the state in the years 1949 and 1950 averaged
24,350 dwelling units annually, about 94 percent of the planned annual
average for the 5 years of the Plan. The Plan was revised sharply
upward in 1951, however, assigning the following goals, in number of
dwelling units for the years 1951-53 109/:
Number
Year of Dwellings
1951
37,000
1952
44)000
1953
52,000
Total 133,000
This upward revision of housing goals reflected the need for new
workers' housing which would result from the accelerated industrial
development provided for in the 1951 Plan revision. Actual construc-
tion by the state during the period 1951-53, however, amounted to
only 82,300 dwelling units (see Table 6*), or about 62 percent of the
Plan goal of 133,000 dwelling units.
Apparently under the impetus of the "new course" policy origi-
nated'in the Soviet Bloc in 1953, the regime announced that in 1954
housing construction by the state would total 40,000 dwelling units, no/
an increase of Slightly more than one-third above actual achievement
in 1953. The Plan was fulfilled by only about 70 percent, however,
and fewer dwelling units were constructed than in 1953. It appears
that an original Plan for construction of 48,000 dwelling units in
1955 was revised downward to 40,000 Ill/ as a result of the poor per-
formance in 1954. Even this reduced Plan goal, however, was fulfilled
by only 88 percent.
The regime has been able to provide even this inadequate num-
ber of new apartments only by progressively building smaller units.
* P. 24, above.
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The number of total square meters (sq m) of dwelling units constructed
affords a better measure of the physical volume of state housing
construction than does the number of dwelling units. The average size
of state-constructed apartments, measured in terms of inhabitable space,
was reduced from 57.1 sq in in 1948 to 35.4 sq in in 1955. The total
area of inhabitable space in dwelling units constructed by the state
in Czechoslovakia, 1948-55, is shown in Table 7.
Table 7
Number and Average Size of Dwelling Units and Total Area
of Housing Constructed by the State in Czechoslovakia 2/
1948-55
Year
Number
of Dwellings
(Thousand Units)
Average
Inhabitable Space b/
(Square Meters)
Total
Inhabitable Space s/
(Thousand Square Meters)
1948
11.9
57.1 di
679.5
1949
19.6
N.A.
N.A.
1950
29.1
53.0
1,542.3
1951
22.3
48.0
1,070.4
1952
30.3
39.5
1,196.9
1953
29.7
37.7
1,119.7
1954
27.8
35.9
998.0
1955
35.2
35.4
1,246.1
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b. Rooms measuring 4 sq in or more in area-and kitchens measuring
12 sq m or more in area are included as inhabitable space in this
table. The usage is somewhat ambiguous because, for example, a 3-
room apartment may include 3 rooms with no kitchen, 3 rooms and a
kitchen less than 12 sq m in area, or 2 rooms with a kitchen 12 or
more sq m in area.
c. Obtained by multiplying columns 1 and 2.
d. 113/
The poor performance in the field of state housing construc-
tion reflects the low priority assigned to this sector in the alloca-
tion of construction resources, particularly manpower. The Plan goals
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for housing construction were apparently predicated on a rapid ad-
vance in construction technology -- the use of assembly-line methods,
panel construction using prefabricated sections, and increased mech-
anization -- as a means of raising productivity and overcoming the
labor shortage. The proposed advances were not achieved, however,
either in the development of technology or in the production of pre-
fabricated elements. In addition, the standard deficiencies such as
labor turnover, excessive absenteeism, and inefficient utilization
of resources contributed to the low incidence of Plan fulfillment in
state housing construction.
In an attempt to offset to some extent the deficiencies in
state housing construction, the regime in recent years provided in-
creased incentive to individuals to build their own homes, as indi-
cated by the sharp rise in the number of private houses constructed
since 1954. Such incentives take the form of bank loans at low in-
terest rates, materials supplied by the state at wholesale prices,
and technical assistance. 11L41 This policy is intended as a measure
to secure needed housing without putting an additional strain on short
supplies of construction manpower, because the individual must supply
his own labor and cannot employ workers from the socialized construc-
tion sector. 115/
There appears to be little possibility of improvement in the
basic indexes of quality of housing in Czechoslovakia by 1960. Al-
though the Second Five Year Plan calls for the construction of roughly
50 percent more dwelling units than were constructed in the period
1951-55, achievement of this goal will do no more than maintain the
indexes at the unsatisfactory levels prevailing in 1955. It has been
estimated that a minimum yearly average of 62,000 dwelling units must
be constructed in the period 1956-60 to meet the needs created by
the estimated growth in the number of households. 116/ The Second
Five Year Plan calls for construction of 300,000 dwelling units (250)000
by the state and 50,000 by individuals), 11// a yearly average of
60,000 dwelling units. The 1956 Plan provided for construction of
42,000 dwelling units by the state, an increase of nearly 20 percent
above achievement in 1955.* It appears that the Plan was revised
downward to 35,600 dwelling units in March 1956, 112/ probably as a
result of poor Plan fulfillment during the first quarter. Even this
* Estimated from the announced Plan for construction of 1.5 million
sq in of dwelling space as reported in source 118/, on the assumption
that the average size of dwelling units remained the same as in 1955
(35.4 sq m).
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revised goal was fulfilled by only about 90 percent) however) as only
32,000 dwelling units were constructed in 1956.
V. Major Inputs.
A. Manpower.
The program of reconstruction and industrial expansion in
Czechoslovakia beginning in 1947 required a rapid growth in the size
of the construction labor force, which had been badly depleted dur-
ing World War II. Average yearly employment in construction increased
sharply in 1947 and 1948 and then grew at a declining rate through
1953. Over-all employment in construction increased by about 60 per-
cent from 1948 to 1953. The number of workers engaging in actual pro-
duction work increased by only a little more than 50 percent, however,
and employment in planning, design, and administration more than
doubled. In 1955, average yearly employment in construction had
dropped to about 3 percent below the 1953 level, with the entire de-
cline being absorbed by the production sector. Manpower in the con-
struction industry in Czechoslovakia, 1947-56, is shown in Table 8.*
The increase of approximately 50 percent in construction man-
power since 1948 has been far from sufficient to meet construction
requirements as outlined in the economic plans. A persistent short-
age of labor, and particularly skilled labor, is officially recognized
as the major limitation to a more rapid growth in the volume of con-
struction output in the postwar period. The inability of the con-
struction industry to retain adequate numbers of skilled workers or
to increase significantly the proportion of skilled workers in the
total has seriously impeded efforts to develop a stable and efficient
construction labor force. At the beginning of 1955, skilled workers
constituted only about one-third of total construction workers, com-
pared with percentages ranging from 50 to 80 percent in other sectors
of industry. 122/
The stagnation in the growth of employment in construction
In recent years has resulted not so much from the lack of new re-
cruits as from the inability of the construction industry to retain
workers in industry once they are recruited. A major shortcoming
of the construction industry is an excessive rate of labor turnover,
with its disrupting effects on the prOduction process. For example,
* Table 8 follows on p. 29.
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Table 8
Manpower in the Construction Industry of Czechoslovakia
1947-56
Thousand Workers
Year
Production
Workers
Other hi
Workers
Total
1947
N.A.
N.A.
161 2i
1948
194
34
228
1949
237 2/
N.A.
N.A.
1950
258 di
N.A.
N.A.
1951
277 di
N.A.
N.A.
1952
291 di
N.A.
N.A.
1953
294
70
364
1954
288
75
363
1955
277
76
353
1956
287
78
365
1st quarter
265
76
341
2d quarter
287
76
363
3d quarter
299
78
377
4th quarter
298
79
377
b. Probably refers to employees in planning, design,
and administration.
c. 122/
it was reported that in 1954 90,000 workers were recruited by the con-
struction industry, but 100,000 workers left the industry for other
employment. In the period January - October 1955, 64,000 workers were
recruited, but 74,000 left the industry. 124/
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A number of factors contribute to the high rate of labor
turnover in construction, the foremost of which is probably concerned
with wages. Available information indicates that as a rule average
wages in construction compare unfavorably with those in certain other
branches of industry. Workers are thus lured from construction by
the prospect of higher wages in other types of employment. As an
example, it is reported that in the Ostrava industrial region, aver-
age wages in construction of from 1,400 to 1,500 koruny per month com-
pare with rates of from 2,000 to 2,100 koruny per month for steel
workers and from 2,500 to 3,000 koruny per month for coal miners. 125/
Within the industry itself a further disrupting factor is the wide
variation in wage rates for similar types of work between different
construction projects. 12?/ Apparently it has been the practice to
offer above-average wages for workers on high-priority projects, thus
giving rise to disrupting labor movements within the industry itself.
Furthermore, a wage system which was inequitable with regard to rela-
tive payments for skilled and unskilled labor has created discontent,
particularly among skilled workers. For example, it is reported that
in 1955 a mason earned 23 percent more than a temporary worker and
only 3.5 percent more than a digger (not further identified, but pre-
sumably common labor). Before World War II a mason earned 30 percent
more than a temporary worker and 20 percent more than a digger. 127/
During 1956 the regime took steps to correct the inequities
in the wage structure in the construction industry. Early in 1956
the Minister of Construction conceded that existing work norms were
unrealistic, because they were based on the assumptions and experience
of 1952. A new wages and norms system, purporting to provide quali-
tatively better work norms, was put into effect on 1 June 1956. 12W
The new program provided for increases in both work norms and wages.
The announced purpose of the new system was to remove inequities in
the wage structure by providing qualified workers with the opportunity
to earn higher wages. There is evidence, however, that the new pro-
gram was not accepted with enthusiasm by construction workers. There
have even been reports that protest strikes were called by workers
in various locations in the belief that the new system might in fact ?
result in lower wages. 129/
The seasonal nature of construction is another major factor
contributing to instability in the construction labor force. Large
numbers of construction workers are released during the first quarter
of the year, when construction activity is seasonally low, and are
difficult to bring back after finding other employment. Other possible
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factors contributing to the high rate of labor turnover are poor
housing and cultural facilities for construction workers, the
necessity of moving from project to project, and dissatisfaction
over excessive idle time resulting from poor organization and
management at construction sites.
In view of the limited possibilities for increasing employ-
ment in construction, increased productivity of labor has been of
vital importance as .a means of expanding construction output. The
fact that the volume of construction increased by 130 percent dur-
ing the First Five Year Plan, and construction manpower was in-
creased by only a little over 50 percent, indicates the significant
contribution of increased labor productivity to the growth in con-
struction output. Worker productivity increased by 52 percent
during the First Five Year Plan. 130/ Further increases of 6.8
percent, 8.8 percent, and 8.4 percent were reported in 1954, 1955,
and 1956, respectively. 131J Increases in labor productivity since
1948 have been accounted for primarily by greater mechanization
And improved technology in construction. The rapid movement of
skilled workers in and out of the construction industry seems to
Indicate that improvements in the technical levels of workers have
not contributed significantly to the increase in labor productivity.
Growing mechanization, the greater use of assembly-line
methods, and the increased use of prefabricated elements are the
basis for projected increases in productivity during the Second
Five Year Plan. In addition, increased attention is to be given
to securing more efficient use of machinery and equipment by im-
proving organizational work. The Second Five Year Plan envisages
an increase in labor productivity by 1960 of 54 percent above the
level of 1955, 132/ or an average annual increase of about 9 per-
cent. Increased productivity is expected to account for four-fifths
of the growth in construction output during the Second Five Year
Plan. 111/
B. Materials.
Production of construction materials in Czechoslovakia has
been expanded significantly since 1948 to meet the needs of ex-
panding construction output. In 1955, production of cement and
bricks, the two major construction materials, was 74.4 percent and
59.6 percent, respectively, greater than in 1948. The increases
in production, however, have persistently failed to meet planned
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goals. The original version of the First Five Year Plan called for
a 62.5-percent increase in production of cement, from 1.7 million tons
in 1948 to 2.6 million tons in 1953. In the 1951 Plan revision the
1953 goal for production of cement was raised to 3.4 million tons,
an increase of 112.5 percent above the level of 1948. 134/ Actual
production in 1953, however, reached only 2.3 million tons, 40 per-
cent greater than in 1948 and only 68 percent of the revised Plan
goal. Further increases in production of 10.4 percent, 12.9 per-
cent, and 8.9 percent were achieved in 1954, 1955, and 1956, respec-
tively, but the increase in each year failed to meet the production
goal established in the economic Plan. 135/ Production of bricks
by 1953 had reached the volume envisaged in the original version of
the First Five Year Plan (there is no information on a revised goal
for brick production), but production plans were not fulfilled in
1954 and 1955. 136/ Production of cement and bricks in Czechoslovakia,
1937 and 1948-56, is shown in Table 9.
Table 9
Production of Cement and Bricks in Czechoslovakia
1937 and 1948-56
Year
Cement
(Thousand Metric Tons)
Brick
(Million Units)
1937
1,273 2/
836 2/
1948
1,658 2/
924 2/
1949
1,761 hi
889 2/
1950
1,991 b/
1,015 2/
1951
2,112 la/
1,108 2/
1952
2,288 2/
1,278 2/
1953
2,320 21
1,212 2/
1954
2,562!!
1,320 2/
1955
2,892 2/
1,475 2/
1956
3,148 2/
1,592 21
a. 137/
b. 138/
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The degree to which production of building materials, par-
ticularly cement, fulfills domestic requirements is difficult to
assess. Production in 1953 of only 68 percent of envisaged require-
ments for planned construction would appear to indicate that cement
production has constituted a major bottleneck in the construction
Industry. As previously noted, however, construction plans have been
overly optimistic, exceeding the capabilities of the economy not only
with respect to materials production, but also with respect to the
availability of manpower. It seems significant that official state-
ments concerning over-all performance by the construction industry
seldom refer to materials shortages as a major deficiency inhibiting
fulfillment of construction plans. Although there are numerous refer-
ences to cement shortages at individual construction sites, it is
possible that such shortages result largely from maldistribution
and/or excessive waste of cement at the site. Available evidence
indicates that cement production has been adequate to meet the require-
ments of investment construction in the socialized sector but has not
met the demand from prospective builders of private housing and farm
buildings in the private sector of agriculture. It should be noted,
however, that "requirements of investment construction," as used in
this connection, refer to the quantity of cement that the construc-
tion industry was able to consume rather than to the quantity that
would have been required to fulfill investment construction plans.
The Second Five Year Plan calls for continued expansion of
production of building materials. Production of cement is planned
to reach 4.5 million tons in 1960, 56 percent above, the level of 1955,
and production of bricks is to increase by 63 percent. 129/ Fulfill-
ment of these plans for increased production of cement and bricks
will be assured if the average annual rate of increase can be main-
tained at the level achieved in 1956. To support the planned increase
In production of cement, production of installations for cement plants
Is to be increased by 197 percent by 1960, to 22,000 tons. 140/
VI. Equipment and Technology.
As the rate of growth in construction manpower in Czechoslovakia
declined after 1950, mechanization of construction and improved tech-
nology became increasingly important in assuring the continued growth
In construction output. Only by these means can Czechoslovakia attain
the increases in productivity necessary to offset the lack of available
manpower. The quantity of machinery and equipment supplied to the con-
struction industry increased significantly by 1953. In that year,
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compared with 1948, enterprises of the Ministry of Construction had
twice as many dredges, 4 times as many scrapers, 2-1/2 times as many
bulldozers, and 37 times as many cranes. 1.1,./ The extent of mechani-
zation achieved in certain basic operations in construction by 1955
is shown in the following tabulation IS:
Operation
Percent
Earthwork
79.5
Plank and board work
22.4
Interior work
38.0
Assembly of prefabricated parts
73.7
Masonry work
37.0
Plastering
20.2
Concrete mixing
90.0
143/
Stocks of machinery and equipment in the construction industry
will continue to increase during the Second Five Year Plan, but the
main effort in this area will be to assure more efficient utilization
by construction enterprises. Performance in this request has been
exceedingly poor. Excessive idle time of available machinery and
equipment has resulted from poor organization and management, as
indicated in Table 5.* Improper maintenance and the excessive time
required for repairs further contributed to the low rate of utiliza-
tion of existing equipment. 144/ Thus despite significant additions
to the equipment park, labor productivity increased at a rate slower
than planned, and envisaged reductions in construction costs were not
realized. 145/
The industrialization of construction has been a primary goal of the
Czechoslovak construction industry since 1951. The large-scale applica-
tion of prefabricated elements in construction affords the best possi-
bility for increased labor productivity which, because of the scarcity
of construction manpower, is vital to the continued expansion of con-
struction output. A basic requisite of large-scale industrialization
of construction is standardization, both of building plans and of
specifications for prefabricated construction elements. Institutes
of the Ministry of Construction began intensive research in 1951
looking to the development of standardization, particularly in the
field of housing construction. 146/ Achievements in this field have
been limited, however, by bureaucratic mismanagement. By the end of
* P. 15, above.
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1955, standardization had not developed sufficiently to support a
large-scale program of production and assembly of prefabricated
elements, and the program remained largely in the experimental
stage. The regime claims the construction with prefabricated wall
panels of only 255 apartment units in 1955, and only 905 were planned
for 1956. 11E/ Experience gained in this field since 1951, however,
should provide the basis for a large-scale development of industrial-
ized construction during the Second Five Year Plan.
Successful application of industrialized methods of construction
on a large scale is perhaps the primary task of the construction in-
dustry during the Second Five Year Plan. Czechoslovak experience has
demonstrated that construction with prefabricated elements requires
fewer workers and significantly increases labor productivity, a con-
dition which is counted on strongly to compensate for the shortage of
manpower. In addition, this method of construction affords other sig-
nificant advantages in the form of reduced consumption of materials
and shorter construction time. Table 10,* based on Czechoslovak ex-
perience, compares consumption of materials and construction time on
similar projects constructed by standard and by industrialized methods.
Further, prefabrication, by eliminating the wet-concrete process, will
allow a greater volume of construction during the severe winter months
of the first quarter of the year. By thus moderating the seasonal
nature of construction, the use of prefabricated elements should con-
tribute materially to greater stability and efficiency in the construc-
tion labor force.
Increased labor productivity and shorter periods of construction,
however, were not accompanied by the expected reduction in construc-
tion costs where prefabricated elements were applied. In 1956 the
cost of producing and transporting construction elements remained so
high as to offset gains from greater productivity. 1.1.;_@/
The Second Five Year Plan envisages a rapid expansion in the ap-
plication of industrialized methods of construction. It is planned
that 21,000 apartment units (multiple unit buildings) will be built
in 1960 with prefabricated sections and large wall panels, of which
7,000 will be completely prefabricated. 11.19/ Although construction with
prefabricated elements has to date been oriented mainly toward housing
construction, it is planned to apply this method on a broader scale
to industrial construction as the Second Five Year Plan progresses.
* Table 10 follows on p. 36.
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Table 10
Consumption of Materials and Period of Construction
In Standard and Prefabricated Construction in Czechoslovakia 2/
Kilograms per Cubic Meter
Specifications
Standard Construction Prefabricated Construction
11-Story House 11-Story House (Assembled
(Brick) with Wall Panels)
Weight 600.0 380.0
Consumption of steel 6.4 3.0
Consumption of cement 30.0 35.0
Consumption of bricks 60.0
Period of construction
(months)
18.o 5.0
Production of prefabricated blocks and panels is to increase signifi-
cantly to support the planned program of industrialization of construc-
tion. The principal emphasis will be on the expansion of construction
with large wall panels. 151/ Large, complete wall panels are less
costly to produce and can be assembled more cheaply and in less time.
With the development of large-scale production and assembly of large
wall panels, costs of construction with these elements may be expected
to decline. Press statements by construction officials indicate that
the problem of transporting large wall panels will be solved by develop-
ing production in plants near construction sites, particularly in the
major industrial areas having a large and long-range demand for new
construction. The success of the construction industry in achieving
the construction goals of the Second Five Year Plan will depend to a
very large extent on the degree of success in adapting its operations
to industrialized methods.
VII. Conclusions. -
Throughout the postwar period the investment construction program
of Czechoslovakia has been characterized by faulty planning, a condi-
tion attributable largely to the centralization of authority over all
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investment construction plans in the government ministries. The cen-
tral planners in Czechoslovakia, as in most other Satellite countries,
have tended to be overly optimistic concerning the capabilities of the
economy in the field of investment construction. Central authorities
were inclined to give more weight in economic plans to construction of
large, new industrial enterprises than to modernization and expansion
of existing facilities, and throughout the postwar period too many
new projects were put under construction simultaneously. Thus not
only were construction resources excessively dispersed, with the con-
sequent delays in construction and higher costs, but also large amounts
of resources were tied up in projects which could only mature over a
long period of time. The contribution of the construction industry to
the growth of the national economy in Czechoslovakia, although sig-
nificant, would have been greater had the industry been able to con-
centrate its resources on a smaller number of projects which could
more quickly be brought into production.
Faulty planning, however) has been only partly responsible for
the persistent underfulfillment of construction plans. The growth
in construction output since 1951 would have been greater had the
construction industry taken full advantage of opportunities to in-
crease its operational efficiency. Little was done, however, to im-
prove the organization and management of construction or to more fully
utilize machinery and equipment ahd improved methods of construction.
The deficiencies in management largely accounted for the failure to
achieve reductions in construction costs. The apparent lethargy of
many enterprise managers in adopting technical advances and in assur-
ing more efficient use of equipment cannot be adequately explained.
A possible explanation, however, may be that the high degree of cen-
tralization of authority over most aspects of construction work is
not conducive to initiative on the part of managers and foremen.
The directives of the Second Five Year Plan indicate a more realis-
tic approach to the problems of investment construction than has pre-
vailed in the past. Considerably more attention is to be given to the
possibilities of increasing production by modernization, mechanization,
and expansion of existing facilities. In the sphere of new construc-
tion, work will be concentrated on fewer projects and will thus make
a more timely contribution to production. Such a program, if carried
out, will result in a better allocation of resources and improved ef-
ficiency in the operations of the construction industry.
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The goal of a 60-percent increase in construction output during
the Second Five Year Plan does not appear excessive. Construction
output in 1956, although it failed to fulfill the annual Plan, never-
theless increased to a greater extent (9 percent above the level of
1955) than in any year since 1953. An average annual increase of
10 percent in the years 1957-60 will assure the over-all 60-percent
increase envisaged for the Second Five Year Plan. The decentraliza-
tion program begun in 1956 should lead to improved planning, organiza-
tion, and management of construction. With the improved technology
now available, it appears probable that the construction industry
will fulfill its assigned tasks by the end of the Second Five Year
Plan.
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APPENDIX A
CONSTRUCTION ENTERPRISES SUBORDINATE TO THE CZECHOSLOVAK MINISTRY OF CONSTRUCTION
AND TO 12th SLOVAK COMMISSARIAT OF CONSTRUCTION*
Enterprise
Ministry of Construction
Mein Administration for Industrial
Construction
Vystavba rudnych dolu a huti
Vystavba dulniho a energetickeho
zarizani
Vystavba chemickeho prunomlu
Pruostav
Prumstav
Prumstav
Proostav
Prumstav
Teplotechna
Main Administration for Construction
of Combines
Vitkovicke stavby
Trinicke stateby
Eukostav
Erca.
Main Administration for Special
Industrial Construction
Stredoslovanske stavby
Prumstav
Armabeton
Pn.zistav
Stavobet
Location
Prague
Ostrava
Usti sad Labem
Plzen
Most
Pardubice
Brno
Prostejov
Prague
Ostrava
Trinec
Kosice
Svaty Kriz
Zvolen
Pure Svaty Martin
Prague
Vsetin
Semtin
Function
Construction of ore mines and foundries
Construction of mining and power installations
Construction of chemical plants
Industrial construction
Industrial construction
Industrial construction
Industrial construction
Industrial construction
Construction of central heating installations
Construction of large industrial complexes
Construction of large industrial complexes
Construction of large industrial complexes
Construction of large industrial complexes
fThese enterprises construct special industrial
Installations such as police installations,
atomic installations, and plants with secret
production plans.
* This list of 51 enterprises is based on information obtained in 1951. It is possible that enter-
prise names have been changed and that organizational.Zhifts have occurred. Reports in 1955, however,
still referred to the 51 enterprises under the jurisdiction of the Ministry of Construction and the Com-
missariat of Construction. Thus it is believed that the above list reflects reasonably accurately the
number and functions of construction enterprises subordinate to these agencies. The indication of the
function of the subordinate enterprises gives an approximate translation of the Czech and Slovak
designations of these enterprises.
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Enterprise
Ministry of Construction (Continued)
Main Administration for Residential
and Other Construction
Location Function
Bystove stavby Most Residential construction
Stavby sidliat Ostrava Residential construction
Pozemni stavby Prague f
Pozemni stavby Ceske Budejovice
Pozemni stavby Teplice Above-ground construction, probably including
Pozemni stavby Havlickuv Brod j housing, public works, and possibly certain
Pozemni stavby Brno I industrial structures
Pozemni stavby Cottvaldov
Pozemni stavby Opava
Instalacni zavody Plzen Installation works, possibly finishing work
such as plumbing and wiring
Main Administration for Engineer-
ing Construction
Vodni stavby Tabor Hydraulic construction
Dopravni stavby Prague Transportation construction
Dopravni stavby Ravlickuv Brod Transportation construction
Ingstav Prague Engineering construction
Ingstav Brno Engineering construction
Main Administration for Manufacture
of Construction Materials
Prefa Prague Manufacture of construction materials, types
unloaown
Prefa Brno Manufacture of construction materials, types
unknown
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Enterprise
Ministry of Construction (Continued)
Math Administration of Supplies
Staviva
Staviva
Slovak Commissariat of Construction
Main Administration for Industrial
Construction
Vyntavba rudnyeb bani
Prierastav
Pricmmtav
Priemstav
Main Administration for Residential
and Other Construction
Pozemni stavby
Pamernal stavby
Pozethi stavby
Paternal stavby
Pomemni stavby
Bratislavake instalacni zavody
Main Administration for Engineer-
ing Construction
Hydrostav
'fret druzby
Ingstav
Location
Prague
Bratislava
Pt?
Bratislava
Mina
)(bathe
Bratislava
(Titre
Bartsth Bystrica
Zilina
Proem
Bratislava
Bratislava
Kosice
Bratislava
Enaction
rossibly responsible for distribution of con-
struction materials
Construction of ore mines
Industrial construction
Industrial construction
Industrial construction
[Above-ground construction, Probably public
works and possibly certain industrial
Latructures
Installation worth, possibly finishing
work such as plumbing and wiring
Hydroconatruction
Railroad construction
Engineering construction
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Enterprise
Slovak Commissariat of Construction
(Continued)
Main Administration for Manufacture
of Construction Materials
Prefa
Location Function
Bratislava Manufacture of construction materials, type
unknown
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APPENDIX B
METHODOLOGY
An index of construction in Czechoslovakia for the period 1948-55,
with 1948 as the base year (1948 = 100) is ap- 50X1
parently based on data for the value of construction output in con-
stant prices of 1953. in 1948-55 total 50X1
construction and assembly work amounted to 107.5 billion koruny.
The given index was first converted to a 1955 base (1955 = 100).
Index numbers for the 8 years, 1948-55) were then totaled) and the
Index number for each year was computed as a percentage of the total.
This percentage was then applied to the figure 107.5 billion koruny
to determine the value of construction output for each year at 1953
prices.
onstruction output in 1948, at constant
prices of 1947, was 6o percent greater than in 1947. This ratio was
used to link values for 1947 to the index. The figure for the value
of construction output in 1938 was determined from the relationship
of the index numbers for 1938 and 1947.
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