Gov't does about-face, reopens economic zones to new investors
However, the government has not completely reopened the zones' gates. Rather, in the face of European Union (EU) opposition to them, it has created a window for new investment that will shut next year.
Under its latest decree, the government said the zones, which offer hefty tax breaks, could bring in new investors only until the end of 2000. Unless, that is, the area in which the zone is located has exceptionally high unemployment, in this case defined as a jobless rate that is 150% the national average. Such zones will be allowed to bring in new investors until the end of 2001.
Although the decision reverses an Economy Ministry order from last month, it gives a bit more certainty to the zones and companies that were considering investing in them. This is especially true for the Wałbrzych special economic zone, which is now in negotiations with Toyota.
Toyota is expected to invest more than $100 million in Wałbrzych and employ 500-600 people, according to a Cabinet press release issued last week. The deal will fill the zone and so Toyota will be the last investor there, said Włodzimierz Gawroński, deputy mayor of Wałbrzych.
But the size of the investment should bring substantial gains to the area, he added.
"We are certain that Toyota's investment will bring many benefits to Wałbrzych - new jobs, tax revenues, and training in new skills for our citizens," Gawroński said.
Wałbrzych's unemployment rate was 15.2% in September 1998, the latest figure the city has available, more than 150% of the national unemployment rate, which at the time was 9.6%. So in theory Toyota has until the end of 2001 to make its investment.
Toyota, however, is still playing coy about the deal.
"There's been no decision, we are still looking for opportunities," said Naoto Fuse, a Toyota spokesperson in Brussels. He would not confirm the size of the investment quoted by the government's press release, nor would he comment on the effect the latest government decision would have on his company's investment plans.
But other new investors were far less sanguine about the new rules.
The decision is "great news" said Richard Lada, country manager for Motorola. His company plans to move into the Krakow special economic zone "within the next couple of months," Lada said.
For some, the reopening of the zones did not go far enough. "I am not satisfied with this decision," said Piotr Wojaczek, president of the Katowice Special Economic Zone. "We planned to continue accepting new investors until Poland joins the European Union, at least until 2003."
Even under the tighter deadline, Wojaczek says his zone will bring in 10 more investors. He is banking however on an undefined term in the government's new decree. The Katowice zone is split into five subzones, each located in a different gmina, or township. The unemployment rates differ widely between the subzones, from 5% in Tychy to 15% in Żory. Wojaczek hopes that this means he can keep funneling investors into some of his subzones until the end of 2001, while others will be closed in 2000. "The regulations did not define" what to do in such cases, Wojaczek said. "So we will define it in the way most advantageous for us."
The Katowice zone plans three tenders in July, for spots in the Sosnowiec, Gliwice and Żory subzones, and two tenders in August for the Gliwice subzone. The Katowice zone has attracted DM 1.5 billion in investments, employing 13,000 people, Wojaczek said.
Under its latest decree, the government said the zones, which offer hefty tax breaks, could bring in new investors only until the end of 2000. Unless, that is, the area in which the zone is located has exceptionally high unemployment, in this case defined as a jobless rate that is 150% the national average. Such zones will be allowed to bring in new investors until the end of 2001.
Although the decision reverses an Economy Ministry order from last month, it gives a bit more certainty to the zones and companies that were considering investing in them. This is especially true for the Wałbrzych special economic zone, which is now in negotiations with Toyota.
Toyota is expected to invest more than $100 million in Wałbrzych and employ 500-600 people, according to a Cabinet press release issued last week. The deal will fill the zone and so Toyota will be the last investor there, said Włodzimierz Gawroński, deputy mayor of Wałbrzych.
But the size of the investment should bring substantial gains to the area, he added.
"We are certain that Toyota's investment will bring many benefits to Wałbrzych - new jobs, tax revenues, and training in new skills for our citizens," Gawroński said.
Wałbrzych's unemployment rate was 15.2% in September 1998, the latest figure the city has available, more than 150% of the national unemployment rate, which at the time was 9.6%. So in theory Toyota has until the end of 2001 to make its investment.
Toyota, however, is still playing coy about the deal.
"There's been no decision, we are still looking for opportunities," said Naoto Fuse, a Toyota spokesperson in Brussels. He would not confirm the size of the investment quoted by the government's press release, nor would he comment on the effect the latest government decision would have on his company's investment plans.
But other new investors were far less sanguine about the new rules.
The decision is "great news" said Richard Lada, country manager for Motorola. His company plans to move into the Krakow special economic zone "within the next couple of months," Lada said.
For some, the reopening of the zones did not go far enough. "I am not satisfied with this decision," said Piotr Wojaczek, president of the Katowice Special Economic Zone. "We planned to continue accepting new investors until Poland joins the European Union, at least until 2003."
Even under the tighter deadline, Wojaczek says his zone will bring in 10 more investors. He is banking however on an undefined term in the government's new decree. The Katowice zone is split into five subzones, each located in a different gmina, or township. The unemployment rates differ widely between the subzones, from 5% in Tychy to 15% in Żory. Wojaczek hopes that this means he can keep funneling investors into some of his subzones until the end of 2001, while others will be closed in 2000. "The regulations did not define" what to do in such cases, Wojaczek said. "So we will define it in the way most advantageous for us."
The Katowice zone plans three tenders in July, for spots in the Sosnowiec, Gliwice and Żory subzones, and two tenders in August for the Gliwice subzone. The Katowice zone has attracted DM 1.5 billion in investments, employing 13,000 people, Wojaczek said.
