7th March 2005
Thursday, September 2nd, 2010
Building a road to nowhere?
For the first time there are EU funds available to change the state of Polish roads. Entrepreneurs can't wait, but some are skeptical that the ambitious goals can be achieved.
The appalling state of Poland's roads is infamous across Europe. For those who journey outside Warsaw, a simple meeting can turn into a transport trial. Even in the capital, the risk of losing a wheel in the chasm-like post-winter cracks can turn into a daily trauma. But the consequences of the pitiful road network go far beyond a simple question of comfort. The fatality rate per capita on Poland's roads is nearly double the level in neighboring Germany, and while deaths fell in the 15 old EU countries by 10 percent, the figures in Poland show no sign of a dramatic decrease.
It is estimated that as much as 80 percent of Polish roads fail to meet EU standards and could be classified as unsuitable for traffic. But, no matter how dreadful it sounds, even the government agrees that this is an understatement.
"Some 88 percent of our roads are local and regional, and of the remaining 12 percent only four percent comply with EU norms. We have one of the worst, if not the worst road networks in the EU," says Vice-Minister of Infrastructure Ryszard Kurylczyk.
The plan
But what allows the Vice-Minister to remain optimistic is the changing landscape. According to the Office of the General Director of National Roads and Highways (GDDKiA), a record sum of zł.7 billion is at its disposal for road construction and repair in 2005.
"Between 2005 and 2013 some 2,000 km of highways [and] 1,700 km of expressways will be opened," claims the deputy director of GDDKiA, Piotr Janczewski. This year alone contractors are to finish construction of 122 km and begin 547 km of motorways. By the end of 2005 one should be able to travel from Kraków through Wrocław almost to the German border on the A4 highway, and from Łódź to Poznań via the east-west A2 highway. This international route will connect Germany with Belarus by 2013.
Business votes "yes"
The vice president of distribution facilities provider Pro Logis, Michael de Jong-Douglas, was clearly surprised by this outlook. Referring to GDDKiA's blueprint, he says: "I am going to show this map to my clients, because the perception is roads are worse than this."
But many businesspeople from the logistics sector emphasize that if a highway ends just 10 km before the border, the obstacles to freight transport remain. Poland has EU members along two thirds of its borders, and the remaining territory leads to promising eastern markets. Its potential as a logistics and transport hub is obvious.
Mark Charlton, author of PricewaterhouseCoopers' recent report, Emerging Trends in Real Estate Europe 2005, says: "[With regard to warehousing and logistics] Central Europe in particular is benefiting from a shift to low-cost areas, a shift from west to east and a shift from retail to industrial, supplying to the consumer directly from the warehouse. Prague, Warsaw and Budapest all [benefit] from cross-border goods movements from countries proximate to the EU accession countries."
"Companies are no longer looking at logistics on a country-by-country basis," adds Jong-Douglas, while Kris Pauwels from DHL spells out his concerns: "Production already moved east, everyone acknowledges that." Others state, however, that cost savings resulting from setting-up a large regional warehouse in Poland could be eaten up by additional transport expenditure.
The country has to face the challenges of rapidly developing road transport, which, by EU measures, is expected to jump 80 percent by 2030. The Czech Republic suffers from massive congestion already, after the number of trucks crossing some of its borders quadrupled following EU accession. The infrastructure of Poland's southern neighbor is full of bottlenecks. Given that the Czech Republic enjoys much better roads than Poland, this should set alarm bells ringing. However, Dariusz Słotwiński, the Polish president of the country's main construction company, Strabag, is optimistic: "The government looks very determined to achieve its goals."
The story so far
The future may appear to be rosy, but everyday experiences tell a different story. The winner of the A1 bid from Gdańsk southbound, the GTC consortium, is scheduled to start construction of a 118 km strip this year, but is still negotiating the government's commitment to the project.
Traffic monitoring showed that the A1 is unlikely to achieve profitability in the foreseeable future. Consequently, GTC is appealing for public support and financial guarantees. And although Minister Kurylczyk agrees that the state should chip in for strategic routes such as the A1, which may help unblock Polish ports, the case has become complicated. The tender initially offered no state support, and now, after the change in rules, other parties that were originally interested may want to block the investment through Polish or European courts. This would postpone the already delayed process.
Meanwhile, in the Wielkopolskie voivodship, clouds are gathering over the recently opened highway. The Autostrada Wielkopolska consortium, which built and now operates the route, is being pressurized by authorities to stop charging tolls to truck drivers. Logistics companies have apparently advised their drivers to save additional costs by detouring the highway via local roads. Thus, cavalcades of 40-tonne monsters have been rolling through tiny villages, bringing their inhabitants out on to the streets in protest. The government is offering some compensation, but the consortium says it is not enough. Słotwiński, whose firm is one of the consortium members, is frank: "Autostrada Wielkopolska is asking for twice as much as the government is offering."
So far, companies are refusing to pay because the 150 km route costs zł.146 for a large, three-axle truck.
"Our country cannot afford such tolls," says a specialist in road planning and location from one of Warsaw's main engineering firms. On the other hand, as no one expects private investors to operate below profit, public support seems necessary.
Devil in the details
The law looms large over the 2013 plan. Some bills were designed to accelerate the planning and design phase of projects, but the above mentioned road-planning specialist claims that investors and authorities have been implementing laws first and learning from their mistakes afterwards: "We need to wait one to two years before most of the problems emerge."
To sum up, Polish projects often lack the environmental background required to obtain EU funding. And several recently introduced ecological laws are not helping rapid and smooth investment. The European Nature 2000 areas cannot be altered by any road projects, unless appropriate protection is provided. And such measures pump up the costs of construction.
"Instead of building the shortest possible bridge, one might have to build a flyover for the entire valley," explains the specialist.
All the above present a thorough challenge for future decision makers. Regulations providing guidelines for public-private partnerships (PPP) are being discussed in the parliament, but Jan Rokita, the leader of Civic Platform and widely regarded as the Prime Minister in waiting, is skeptical: "The PPP is a matter of know-how and not legislation." He announced that his party would increase the effectiveness of private and public cooperatives.
Until then, perhaps those who can afford it should consider equipping themselves with off-road vehicles.
From Warsaw Business Journal by Błażej Karwowski
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