Czech city deals blow to Amazon's plans for distribution hub

PRAGUE, March 18 Tue Mar 18, 2014 1:51pm EDT

PRAGUE, March 18 (Reuters) - The Czech Republic's second-largest city Brno dealt a blow to U.S. online retailer Amazon.com Inc's plans for a distribution centre in the south of the country, as councillors voted on Tuesday to reject some conditions for its construction.

The city council refused to back an amendment to the contract with Amazon that would have allowed funds to help build connections to the main highway near the plant's proposed site. The city also said its plan governing development did not allow construction.

Amazon last year announced plans to build two distribution centres in the central European country, creating around 2,000 jobs in Brno. A site near Prague airport has already received a go-ahead.

An Amazon spokeswoman was not immediately available to comment.

The rejection comes as the Czech economy is starting to get back on its feet after exiting a record-long six-quarter recession in the second quarter last year. Unemployment remains at a record high but a jobless rate of 8.6 percent is still low compared with others in the region.

Some countries such as Slovakia have already expressed interest in housing an Amazon logistics centre if it is rejected for Brno. Czech media reported the investment was worth 100 million euros ($139.1 million).

"Brno wasted its chance to get a strong investor at a time of economic recession," said Brno Mayor Roman Onderka, a member of the country's ruling Social Democrat party, whose government had pushed for the investment.

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