11:56 9 March 2020
Post by: WBJ

Economic prowess or investing dissent?

Poland joined the European Union in May 2004, and the biggest beneficiary of EU funds since 2007. Ever since, it has been a perpetual construction site. Unequivocally, the funds have had a significant impact on accelerating the pace of the country’s modernization. However, a large section of the Polish society is dissatisfied with the upcoming investments. By Sergiusz Prokurat

Economic prowess or investing dissent?

Poland’s ruling right-wing Law and Justice (PiS) party who narrowly won a second term in office has its own vision of the future of the central European nation’s infrastructure. Recently, Warsaw ratified an agreement to dig a waterway across a narrow strip of land – the Vistula Spit – that separates the country’s coastline in its north-east from the Baltic Sea. The sand pit stretches from the northern Polish city of Gdańsk to Baltiysk in the Russian exclave of Kaliningrad. A Polish-Belgian consortium that is in charge of implementing the project will develop the maritime port in Elbląg, northeastern Poland. The canal intends to enable Polish sailors to go to the sea from the port without having to request access to pass through Russian territory. Moscow demands that the passage of each vessel must be reported a week in advance. 


However, Polish sailors have voiced their concern. The Vistula lagoon is shallow. Roughly half of it lies within Poland and has an average depth of 2.7 meters. Seamen have said that only boats with a draft of up to one meter can ferry freely across the water body. Moreover, rapid changes in the water level, sometimes falling down to 1.5 meters within 24 hours due to winds or simply low tides, could prevent sailors from navigating across the lagoon. Dredging in such conditions is quickly reverted by nature unless the body of water is dredged continuously.


There are nearly 30 Polish ports on the Baltic Sea that deal with over 2.5 million tonnes of cargo per year. The Elbląg port is expected to transport 100,000 tonnes of cargo – 300 times less than Gdańsk. It would cost the taxpayer almost PLN 1 billion (€233 million), Poland’s maritime ministry has claimed. Work has already begun and will finish by 2022.


Meanwhile, residents of Polish towns located on the Spit have protested against the construction of the port because in their opinion the investment will destroy the beaches located east of the planned channel due to interruption of the natural sand deposition process. Ecologists have protested as well, pointing at the irreparable damage caused to nature.


The Vistula Spit is not the only major infrastructural conundrum the government has entangled itself in. Its first term was also marred by a controversy over a much larger and costlier project PiS decided to implement, despite popular dissent. The proposal for a central airport in Poland was put forward in the 1970s. It got shelved in the 1980s and 1990s. However, the idea gained momentum under PiS’s nationalistic regime with the government approving the plan in November 2017. The Central Communication Port (CPK) project involves building a new 3000-hectare gigantic airport in Baranów, located 50km (31 miles) southwest of the capital Warsaw. Once built, it is expected to be the third largest airport in Europe and the seventh in the world. Warsaw believes that once completed in 2027, the transport hub will initially serve 45 million passengers a year (Poland’s number 1 airport currently serves 17 million annually) and eventually 100 million travelers per year. Along with the airport, the plan involves building a network of railways and roads around the airport connecting nearby towns and cities, including a Hyperloop vacuum railway. The whole project will cost the exchequer an approximate PLN 80 billion (€18.6 billion). Currently, the majority of air traffic in Poland is served by regional airports. The largest share in the aviation market in Poland is held by low-cost airlines, such as Ryanair and Wizz Air, which offer competitively-priced tickets.


It is necessary to determine what the future of other airports could be, including those in and around Warsaw – Chopin and Modlin. PiS initially favored closing down the airports before surreptitiously withdrawing their suggestion. Undoubtedly, a country the size of Poland needs a major airport. However, the project is based on the assumption that the Polish flag carrier LOT will become a leading power in the aviation market if it has a sufficiently large airport. But if we analyze the last decade of the state-owned LOT’s operations, we can conclude that it is closer to bankruptcy than to being an aviation heavyweight. Currently, the market shows that the company is growing. But it is worth pointing out that in 2014, it received a capital injection from the state budget, without which it would have collapsed. in 2014, it received a capital injection from the state budget, without which it would have collapsed.


The residents of Warsaw have acknowledged the construction of an airport almost 50km (31 miles) from the city center without enthusiasm. The average distance to European hubs from the metropolitan centers that they serve is 22km (13 miles). However, the proposal to shut down local well-communicated airports in Warsaw has made its residents angry. In June 2018, in a resounding majority, Baranów residents voted down the proposal to build CPK. Through a non-binding referendum they said they did not want to give up their land for the new airport. Despite the deputy infrastructure minister promising that the voice of the public would be taken into consideration, the company to build CPK has already been established. Initial work is underway.


These projects result from the way reality is perceived by the ruling party politicians. It is geopolitics. It puts forward recipes for making Poland great. It argues that Poland should pursue an offensive policy for its own security. Elbląg port and CPK are examples of PiS flexing their economic muscles. Whether the Polish GDP will grow at the promised 0.5 percent per year due to CPK, whether the Polish airline hub will manage to attract enough passengers from neighboring countries and whether the Elbląg port will prove to be a valid economic decision, remains to be seen.

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