Public-Private Partnership ? great opportunity for building motorways!

Public-Private Partnership (PPP), as a tool for building motorways in a quick and transparent way, is still underestimated in Poland. The main barriers to the development of PPP include political games, inefficiency of public administration and a false image of the private sector which has been created. These are the most important conclusions from the presentations and discussions held during the panel of “Public-Private Partnership – how to spend money cleverly on roads” organised during the 18th Economic Forum in Krynica. The host of the panel was Stalexport Autostrady group.

‘If we want to have a network of motorways in Poland as soon as possible at the European level, we immediately need to use mechanisms of Public-Private Partnership which have been used successfully in other countries around the world’, said Emil Wąsacz, Chairman of Stalexport Autostrady SA group, when opening the debate. He expressed his dissatisfaction with the fact that the issue of motorways is mentioned in a political context and that a negative atmosphere is created with respect to private entities.

‘If we are not more open towards the private party in PPP, the works related to motorways will face a deadlock. The public party will not have enough funds and administrative capacity. And we all will not have enough time!’

Mr Wąsacz tried to dispel some myths which are still prevalent: ‘It is not true that there are some roads which are free of charge. It is not true that PPP facilitates corruption. And the state does not build better! The state builds slower and more expensive. Examples include A4 motorway section Wrocław- Katowice and A2 motorway section Konin - Stryków. At first, the government built them while spending a few billion PLN, but these were ‘bare’ roads with no accompanying infrastructure. Now tenders worth hundreds of millions of Polish zlotys are being organised, so as to ensure comfort and safety for travellers. Does this stand for better?, asks rhetorically Mr Emil Wąsacz.

Giuseppe Palma, Chairman of the Supervisory Board of Stalexport Autostrady SA group and at the same time Director of the Italian group Atlantia, which is the majority shareholder in Stalexport Autostrady, presented extensive experience in building and efficiently managing complex projects related to motorways in Western Europe as well as in other countries of the world. Atlantia injected capital into Stalexport Autostrady and at the same time it provides necessary experience and access to state-of-the-art solutions.

Giuseppe Palma emphasised the immense importance of Public-Private Partnership in developing a modern motorway infrastructure. ‘PPP is not charity, it’s business which has to be financially beneficial for both parties: private and public’, he convinced. The risk for investment partners and the stability of managing the investment over the period of many years need to be precisely specified. It enables efficient implementation of the best and state-of-the-art organisational and technological solutions.

Director Palma also presented very interesting data related to safety assistance systems for motorway traffic as well as technologically advanced and driver-friendly toll-collection systems.

Mr Janusz Piechociński, Polish MP and Deputy Chairman of the Infrastructure Commission in the Lower Chamber of the Polish Parliament, stressed that the most important factors which delay the development of road infrastructure include the inefficiency of public administration in Poland and the resulting backlogs. ‘If a given public office organises 300 tenders annually, it comes as no surprise that it takes so long to complete them. A few people cannot handle so many public procurement cases, and each of them has to be fully in line with the letter of law’, said Mr Piechociński. According to him, if regulations are not extensively simplified and procedures are not facilitated, we should not dream about building motorways in Poland faster.

Another participant of the panel organized by Stalexport Autostrady, Adrian Furgalski, Director of Zespół Doradców Gospodarczych TOR, referred to his famous publication which condemned ‘Polish motorway sins’ by saying that ‘What is the most important, is that the infrastructure cannot be treated as an element of political battles any more’. According to Mr Furgalski this political entanglement has until now limited the chances of constructing a proper network of motorways in Poland.

Jukka Luukkanen, Director in the European Investment Bank, explained how important it is for the financing institution that the rights and obligations of each party in a given Public-Private Partnership are clearly and realistically agreed upon between the partners.

The current point of view of the public sector was presented by Radosław Stępień, Director from the Ministry of Infrastructure. He declared that the needs of the private sector are understood and that there is the willingness to develop Public-Private Partnership in the area of constructing motorways. Mr Stępień announced that the tenders and the selection of contractors related to the key sections of the motorway A1 Stryków – Pyrzowice and A2 Stryków – Konotopa will be advanced, so that the investment is completed before Euro 2012 championship.

The panel, which took place on September 11th 2008, held on the second day of the Forum gathered, apart from the persons mentioned above, Jur Gruszczyński, attorney at law and a partner at Baker & McKenzie law firm. The following persons participated in the discussion: Tadeusz Syryjczyk, former MP and Minister of Transport, Marcin Święcicki, former Mayor of Warsaw, Bohdan Wyżnikiewicz, Vice President of the Gdańsk Institute for Market Economics, Adam Pawłowicz, former President of the Polish Information and Foreign Investment Agency and Jacek Karnowski, Mayor of Sopot. The panel was moderated by Wojciech Szeląg, economic journalist from TV Polsat.