Financing on horizon for A2 motorway
Financing for a portion of the A2 highway that is expected to be in place in the first half of the year could clear the way for construction on the long-awaited motorway to start in late summer, representatives for concession winner Autostrada Wielkopolska (AW) said last week.
"If everything goes quickly and goes as we see it, it is possible even in April or May," said Robert Moren, media specialist with public relations company Point of View, which represents AW.
Moren said that AW is talking with the European Investment Bank (EIB) about providing funding, although no agreement has yet been reached. AW has also been in talks with two banking consortiums, one led by Societe Generale and the other by Credit Lyonnais, about taking on a syndicated loan. AW needs a loan to cover about 40% of its construction costs, which equates to roughly E250 million.
AW is accepting loan offers until Feb. 11, Moren said. "We are very close to the final decision," he said.
AW won a concession to build a 149-kilometer stretch of the planned A2 motorway in April 1997, but like many concession winners in Central Europe has had difficulty in putting together financing for the project. Bankers have been unwilling to back the motorway because they said the government's plan to have private money fund the entire investment was unreasonable.
Originally, concession winners were to pay back loans with money from future tolls, but now that revenue stream is expected to fall short of financing costs. As a result, bidders and financiers have asked the Polish government to step in and provide up to 50% of the funds for both motorway projects planned in Poland, the A1 and the A2.
The Gdansk Transport Company, which won the concession for a 152-kilometer stretch of the A1 motorway from Gdansk to Torun, is also making progress on its project. At a press conference last Tuesday, Andrzej Urbanik, president of the Agency for Motorway Construction, said that the government and Gdansk Transport had recently had talks on what was needed to move the project forward. Gdansk Transport is looking for the government to provide financial assistance.
AW, however, is seeking to build its stretch of the A2, from the Polish town of Konin to Nowy Tomysl, with private funds. The company is only asking the government to provide a guarantee.
Other financing portions include 30% from AW's own funds, with a further 30% coming from either a government-backed loan or bond issue. The syndicated loans would make up the remaining portion.
The EIB would step in to provide some of the government-backed loan, Moren said. AW has until July 29 to nail down how it is going to finance the project or risk losing the concession.
"If EIB sees another option, we are ready to discuss with them what to do," Moren said.
