Piskorski:
By : Tomasz Stepien
Pawel Piskorski, 31, has been Warsaw's mayor since March 1999. His political career began as a history student at Warsaw University when he joined the opposition student organization Niezalezne Zrzeszenie Studentow (NZS). In 1990 Piskorski joined the Liberal Democratic Congress (KLD), which in 1994 merged with the Democratic Union to become the Freedom Union (UW). In 1991 Piskorski served as an adviser to Prime Minister Jan Krzysztof Bielecki, and since 1995 he has been the head of UW's Warsaw arm. In this position Piskorski emerged as the primary figure behind the UW's successful election campaign in 1997. Since 1997 he has also been a member of Parliament after serving previously from 1991-1993. Since becoming mayor of the capital last winter, Piskorski has been busy promoting his "Contract for Warsaw," a lobbying effort aimed at bringing more central funds to finance infrastructure in Warsaw. Piskorski, however, failed last month in his attempt to persuade Parliament to spend zl. 700 million ($166 million) in 2000 for this goal. Rather, Parliament voted to spend only zl. 180 million ($42 million) for development of the capital or in a best-case scenario zl. 280 million ($66 million) provided that the Transportation Ministry reduces its spending on national highway development. The final subsidy will not be known until the Senate and President Aleksander Kwasniewski approve the budget bill, which is expected later this month. Before the parliamentary budget debate in December, Piskorski met with the WBJ's Tomasz Stepien to talk about his attempts to increase infrastructure spending in Warsaw. The following is a translated, edited version of their conversation.
Q: Can you describe where you stand with the "Contract for Warsaw," your effort to bring more central funds to the capital?
A: We're discussing the Contract for Warsaw in the Sejm. We've entered a final phase discussion on next year's (2000) central budget. In the past week we held a series of meetings with parliamentary committees and clubs. Next week (the first week of December 1999) we conclude with a meeting with President Kwasniewski. Our materials reached deputies; they have our brochures that explain what we want. Then the decision will be up to deputies whether we can manage to get some funds for next year. This would be, I emphasize, only the first part. Our eventual goal is to create laws that would guarantee in the long term that the central budget will contribute funds to Warsaw.
Q: Is there a chance that those bills will be passed yet this year (1999)?
A: No, this year it is impossible. We didn't even hope for that because there are only three workweeks left this year and the entire Parliament will focus solely on the central budget. That's enough the pace of work will be crazy anyway, so we never hoped that those bills would be passed this year. But they should reach Parliament immediately after the budget. Now we are introducing amendments for next year's budget that would allow us to start implementing the Contract for next year, but actual laws will be presented to Parliament in 2000.
Q: What are your needs to finance development of Warsaw's infrastructure?
A: We need zl. 6.6 billion ($1.57 billion) to build a bypass around Warsaw in the design that we require. We need zl. 1.9 billion ($452 million) to complete the first line of the metro. The Contract doesn't include a second line of the metro, however, which sooner or later has to be developed. We estimate the cost of the second line of the metro to be zl. 4.5 billion ($1.07 billion). But we are trying to attract private investors for its development. We hope to do this as a private/public partnership scheme and we are talking to several potential investors about it.
Q: So it could be developed on a similar basis as the Swietokrzyski bridge?
A: The specifics are a little bit different. In that case (Swietokrzyski bridge), there was a simple investment that required a clearly defined amount of capital and there was land, whose value would increase thanks to that investment. So the deal was that the company is buying land from us for a much higher price than its value and then we jointly build the bridge. In this case (metro) it will be more difficult. Obviously the period of investment will be much longer and the investment to build an underground line will be much higher. Because of that we need a financial consortium. As far as terms of financing are concerned we're negotiating them because this would include long-term subsidies for tickets, contribution of land, etc. Our intention is to look for partners for construction of the second metro line.
Q: Going back to the Contract for Warsaw, how much money will you need from the central budget next year (2000)?
A: The plan is zl. 700 million. This would enable us to continue construction of the subway and to complete two metro stations Swietokrzyska and Ratusz by the end of 2000. At the same time it would allow us to start working on development of the bypass that includes land acquisition and technical plans. Projects like the bypass are in the early stages later stages don't require many funds. Most of the funds are required in the middle of development, from the third to fifth or sixth year.
Q: Is the zl. 700 million you mentioned much more than what Warsaw received from the central budget in 1999?
A: It's much more. This year Warsaw received zl. 60 million ($14.28 million) for construction of the metro, and a slightly lower amount for Aleja Prymasa Tysiaclecia and Aleja Armii Krajowej (part of the bypass). But what's important is that the amount (zl. 700 million) is significantly higher from what is planned by the (central) government. The government plans to spend zl. 70 million on metro development, out of a total cost of zl. 350 million ($83.3 million) for next year, which means we would have to pay zl. 280 million from our (Warsaw) budget. This is not realistic, we don't have the money. Additionally, Warsaw would get zl. 80 million ($19 million) for development of Aleja Prymasa Tysiaclecia and Aleja Armii Krajowej. We want to complete this project next year; to make these roads available for traffic.
Q: Do you have an alternative plan in case you don't get the expected funds from the central budget?
A: It's very difficult to put together an alternative plan for something that everywhere else in the world is financed from the central budget or from assistance funds. Every bypass around cities was built in this way. Nowhere was any bypass built from private funds. Here, there is no possibility to raise private funds on this scale. So if the government doesn't decide to finance this investment? According to Polish law, (it) needs to be realized by the government. According to all Transportation Ministry plans this investment has to be made, sooner or later. The question is when? We believe it should be made now. If the government doesn't decide to finance it now it means that it will never be built or it will be built sometime in the future after a long delay, when the budget would be able to afford this. This would cause enormous communication complications because there is no other way to improve traffic (congestion) in the city without the construction of a bypass. Today at least half of the traffic in the city center is transit traffic. It's not there because drivers are doing some business on ulica Marszalkowska or Aleje Jerozolimskie, but because they drive from one end of the city to the other.
A similar situation is with the metro. Next year (2000), funds from credits that the city has to take would probably be enough to complete the two stations I mentioned, but in 2001 we will face a dramatic decision whether to stop further development of the metro or to slow it down to adjust to our ability to raise funds. It is commonly known that slowing down such an investment means increasing its costs because the maintenance costs are significant. Additionally it means that the investment would be postponed until an unspecified time in the future. If we get the funds mentioned in the Contract we would complete the first line of the metro by the end of 2004. If we spend funds planned by the central budget we would complete the line by 2024. This is a whole generation later. That's why we want so much to complete the metro. Today the metro is a big success. Every day 180,000 people use it. Today it is impossible to imagine public transportation without the metro, because there is no way to move this number of people with other (available) transportation means.
Q: If you had to compromise, what would you defend most? The metro or the bypass?
A: The specifics of the budget bill are that Parliament gives funds for very defined purposes. So it is not as though I get funds first and then decide what to do with them.
Q: But if you could advise Parliament?
A: I believe that both of those things are very important. I am perfectly aware how difficult the budget for 2000 is. That's why my proposals are realistic zl. 700 million is a realistic amount. For obvious reasons, it's very important for us to complete two metro stations next year. But I believe that we cannot delay construction of the bypass. The sooner we build, the cheaper it will be. That's why we propose these two things at the same time. That's why I used the word Contract because we are not asking for money, we are implementing these projects from our own budget, which is dramatically lower than the budget of any European city. We get back only 12.7% of taxes generated in Warsaw; that's lower than anywhere else in Europe. Our budget is very small and still we are building two bridges that should be financed by the central budget. That's why we are talking about the Contract. We build the bridges, but we expect the state to help us finance the bypass and metro.
Q: At the beginning of this year (1999), Poland implemented administration reform aimed at keeping more tax revenue on a local level. Has the reform changed anything in Warsaw?
A: From the financing point of view, it doesn't work at all. In our country we are at a stage where we decentralized responsibilities, but we didn't decentralize financing to meet those responsibilities. All the time the central budget collects and spends enormous amounts on subsidies for ZUS (Zaklad Ubezpieczen Spolecznych), subsidies for coal mines, subsidies for farmers' fuel, etc. I can say that Varsovians and Warsaw firms generate zl. 14 billion ($3.33 billion) and without that money you could not have a central budget.
Q: Last summer (1999) Warsaw introduced paid parking in the center. How is this revenue being spent?
A: Paid parking is an element of the city's transportation policy. Warsaw, like every city in Europe, tries to limit car traffic in the center. One instrument of this policy, and it's very common everywhere in Europe, is paid parking, so some people when they consider driving to the center will think twice and maybe will use public transportation. Because of that, revenue was never the main goal of paid parking, it was only one of the goals. The revenue is fully spent on renovation and maintenance of roads.
Q: Are there any plans to build multi-level parking lots?
A: We are preparing tenders for both underground and aboveground parking lots. The first attempt to call such a tender took place three years ago, and no one was interested then. That was because no investors would put their money into parking if you could park your car for free outside. So the basic condition for those investments was to introduce paid parking. Now this stage is over and we are working on a tender that most likely will be called sometime early next year for the construction of a couple of underground parking lots in central Warsaw.
Q: Unlike your predecessors you managed to remove street vendors from central Warsaw. How do you evaluate the move now? Some people say that they miss the Vietnamese kiosks.
A: I believe that in the center of a modern capital, and Warsaw is or certainly would like to be a modern capital, one cannot allow primitive and ugly bazaars that make our city ugly. I'm convinced of that. Indeed my predecessors were avoiding this issue because it always involved a lot of conflicts. My opinion is that sometimes you have to set difficult goals for yourself. I set this goal at the beginning of my term. Plac Konstytucji will be a nice, well-developed and people-friendly square. In addition, some of the bazaars have already been removed from plac Defilad and those remaining will be removed in the spring.
Q: Where does the city stand with a plan to develop plac Defilad?
A: Currently, planning issues are under way. In the coming months I have to make a decision on what direction it will go. My intention is to create the framework to allow the investment to start, which means solving planning, infrastructure and economic issues. Then probably some consortium would be created as plac Defilad needs to be developed as a whole, not piece by piece. One can expect that preparation works on creating infrastructure will take place over the next two years and in 2003 investment will start on plac Defilad, provided that I achieve the desired pace of preparation work.
Q: What about city-owned properties in central Warsaw? Foreign investors complain that it is difficult to obtain retail space in existing buildings in downtown as the city subsidizes existing tenants.
A: I believe that in Warsaw we have to create a true property market both for residential and commercial properties as soon as possible. I support the idea of commercial property privatization. The privatization process has already started and I hope it will progress. At the same time we are steadily getting rid of abnormalities in rents, meaning the situations where you have very low rents in commercial space downtown. At the same time, we don't want to remove or limit commerce, which is happening there now. I am a supporter of fair trade, which means paying fair rent and taxes while functioning normally and investing in retail space. That's why I believe we need to remove street trade as unfair competition. Of course, the property market will be created. Already today, there is no problem (with acquiring space). If investors, whether they are local or foreign, offer the market price they should have no problem finding retail space. This issue, which in the past was a problem indeed, is changing and the situation is much better now.
