Despite investing a greater percentage of its gross domestic product into transport infrastructure than, for example, Germany or the UK, Poland still has one of the lowest proportions of highways as a percentage of its total road infrastructure in the European Union.

Moreover, the state-owned firm which coordinates rail transport, Polish State Railways (PKP), has been accused by the Organisation for Economic Co-operation and Development (OECD) of lacking transparency. The OECD has also blamed PKP for holding back the development of Polish rail transport.

In comparison with many of its more developed EU neighbors, there is significant room for improvement in Poland and subsequently a plethora of investment opportunities.

As a member of the EU, Poland benefits from large subsidies for transport infrastructure investments. The country is, moreover, under pressure to ready its infrastructure in time for the Euro 2012 soccer championships, which it is co-hosting with Ukraine.

There are thus genuine incentives for Poland to get its infrastructure in order. Nevertheless, a significant number of deterrents remain for investors, as well as severe transport infrastructure shortcomings.

The best-laid plans…

Following a recent General Directorate for National Roads and Highways (GDDKiA) plea for more government outlays for road infrastructure, Deputy Minister of Infrastructure Radosław Stępień said zł.35 billion would be provided for Poland’s roads next year.

However, despite Poland’s apparent eagerness to invest in roads, such spending levels will be difficult to achieve, the CEO of the Polish Road Congress, Zbigniew Kotlarek, told daily Rzeczpospolita.

“We already have delays in relation to that plan [for 2010] and next year we will [likely] spend [only] zł.22 billion,” Adrian Furgalski, a transport infrastructure expert at the Transport Consultants Group, told the newspaper.

Despite having asked for more government funding, the GDDKiA is also likely to spend only zł.20 billion of the zł.26.7 billion budgeted for this year, according to Mr Furgalski.

While the outlays for investments are high, the OECD has said that the methods by which money is invested are what often causes problems. Poland spends about nine times more on the construction and extension of its roads than on renovation and maintenance, though the latter could in many circumstances be more beneficial and financially viable, according to the OECD.

Full steam ahead?

In the lead-up to Euro 2012, the state has also budgeted zł.350 million for renovating train stations this year. That sum is, however, only enough to renovate 23 of Poland’s 83 “strategic stations” – train stations which are first in line for renovation works. Poland has some 2,600 train stations in total, though only 1,000 are in regular use.

Beyond stations, Poland spends only about E4,000 on the maintenance of each kilometer of railway track every year. The Netherlands, by contrast, spends some €100,000 while Germany spends €132,000.

Anyway, Poland’s railway tracks are currently in such disrepair it would cost zł.47 billion to restore them to their original state, said Dorota Bartoszek, editor in chief of transport infrastructure trade magazine Infrastruktura Transportowa.

Red-tape restrictions

The OECD and consultancy PricewaterhouseCoppers have also found fault with the formal and administrative aspects of Polish road development. According to a PwC report, Poland lacks the tools, procedures and strategies to coordinate subsidies, infrastructure investments and tender processes.

The contract-bidding process allows for frequent insider collusion and corruption, which is damaging to Poland’s image as a place to invest in transport infrastructure.

The OECD also suggested that bureaucracy continues to be a road block to infrastructure development, even at the highest levels. Indeed, according to the OECD, inadequate inter-ministerial cooperation in transport investments often results in projects doubling in terms of the time needed to complete them.