In recent years, Poland, like many countries in the CEE region, has undertaken significant actions in order to ensure the development of its infrastructure.
Despite the fact that many projects have been carried out or are at an advanced stage (e.g., a waste incineration plant in Poznan, a district court in Nowy Sacz, and a poviat (district) hospital in Zywiec), many infrastructure projects still need to be implemented. This includes projects of a significant value and with a nationwide impact. Market specialists estimate that the railway, waste-to-energy, healthcare, road, street lighting and thermal efficiency sectors require the most investment.
Projects in Poland receive support from the government and public sector partners, including the Ministry of Infrastructure and Construction (road and railway projects) and the General Directorate for National Roads and Motorways (road projects). For instance, the Ministry of Infrastructure and Construction and the Ministry of Economy carry out various programs to maximize infrastructure development. This includes programs which provide financial assistance in obtaining professional advisory services by the public parties (projects from the waste management, roads, healthcare, revitalization, and thermal-efficiency-improvement sectors are most desirable) and advisory assistance for public parties with implementing regulations such as the ‘National Railway Program until 2023’ (which provides approximately EUR 16 billion for railway projects until 2023) and the ‘National Road Construction Program for 2014-2023’ (which provides approximately EUR 25 billion for road projects until 2023). Such actions aim to improve quality standards on the part of public entities and to accelerate tender proceedings.
When it comes to project financing, European Union (EU) financing programs still have the biggest impact on the development of infrastructure. Currently, Poland benefits from EU programs for the years 2014-2020 and is actually the biggest beneficiary among all EU countries (EUR 82.5 billion). It has not yet been decided whether Poland will participate in EU funding after 2020. Opinions on this subject vary; however, a decrease or discontinuance of EU funding after 2020 will likely increase the growth of public-private partnership (PPP) ventures. Also, international financial institutions such as the EIB and the EBRD have been active in helping finance infrastructure projects which have been struggling to obtain private financing for the full amount of their value.
In 2015, the Polish government improved the legal system in matters related to infrastructure by means of the Minister of the Economy’s Regulation of 11 February 2015 on risk categories and the factors to be considered in their assessment and the Act on Revitalization of 9 October 2015 (which determines, among other things, that particular payments for private partners may be classified as current public expenditures, and therefore recorded off balance sheet for public parties).
2015 was a breakthrough year in Polish infrastructure. Many complex and innovative projects were commenced – and many more were already in progress: the first healthcare PPP project of big scale (the construction of the poviat hospital in Zywiec), the first government PPP project (the construction of the district court in Nowy Sacz), the pioneer PPP provincial road projects (the construction and maintenance of provincial roads in the Kujawsko-Pomorskie and Dolnoslaskie voivodships), as well as large nationwide railway investments. As recent reports show, the number of PPP projects in Poland is still increasing, as is the number of private investors.
By Wadim Kurpias, Partner, and Marta Kulhawik, Lawyer, CMS
This Article was originally published in Issue 2.6. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.