PPP moves road along
In Poland too they are beginning to add impetus to much-needed road development and last month the government and the Gdansk Transport Company shook hands on a deal to build the stretch of the A1 motorway between Gdansk and Torun.
The rate of motorway construction in Poland has been a source of derision for a number of years now. Various methods have been proposed to fund and speed up the expansion of the road network and some of these, such as the 'winiets' system, which was to involve drivers purchasing a windshield sticker to verify their right to use the motorway, are now dead and buried. Now that Poland is a member of the EU, however, it can count on assistance from cohesion funds and the European Reconstruction and Development Fund to move this vital element of infrastructure forward.
The Gdansk Transport Company (GTC) is a special-purpose concern established purely to deliver this section of the A1, the tender for which it won in 1997. Skanska BOT, part of the Swedish Skanska group, has a 51 percent stake in GTC and the South African Intertoll and the Polish NDI are its other shareholders. After seven years of negotiations with the government, to thrash out exactly how the road would be delivered, GTC was finally granted its license in August this year.
The Build-Operate-Transfer (BOT) system is currently operated in Poland on two sections of motorway: that on the A4 between Kraków and Katowice and on the A2 between Poznan and Wrzesnia. In these situations a private company, the concessionary, has secured finance for the construction and management of the road, for which it bears responsibility for a twenty to thirty year period, before handing over ownership of the motorway to the state. During the 'Operate' period it attempts to recoup the costs of the initial construction by charging users a toll fee, which is possible if the volume of traffic is high enough. This, however, does not apply to the Gdansk-Torun road, which is why the 'shadow toll' innovation has been thought up as part of a public private partnership.
"In our case," says Bernard Pisarski, commercial director of GTC, "the volume of traffic is too low to pay for itself. The economic benefits of the motorway will be huge of course but as a 'financial box', as it were, it doesn't pay off. That's why the state has had to help the concessionary [GTC] and we're pooling our resources to build as a public private partnership."
The 'shadow toll' system will involve drivers paying tolls as they do on the A4 and A2 sections but the money collected will go to the government rather than to the concessionary, which means the former will be setting the toll rates. "GTC will take on the risk for construction," says Andrzej Maciejewski of the General Directorate of Roads and Motorways, "and the government will take on the risk for the number of cars that travel along the road."
GTC will benefit from the 'shadow toll' if it manages to attract traffic above and beyond the forecasted minimum level. For each car in excess of this, part of the toll revenue earned will go to GTC's shareholders, though a percentage will also be used for maintenance of the motorway; the rest will go to the state.
The 'shadow toll' solution was reached by both government and GTC when it was acknowledged that the traffic would not be heavy enough to pay for the project and the option of setting unusually high tolls was clearly a non-starter in a country of limited incomes. The public private partnership means, according to Pisarski, "that the traffic risk is incorporated into the project." With a straightforward toll scheme, he adds, there would be no way of "securing loans from the banks but with this we can get relatively inexpensive finance. That's why both parties thought this [the shadow toll] would be more economically viable."
Of the prospects for the rest of Poland's motorway network Andrzej Maciejewski maintains that the government is currently "spending five times more money" than previously in preparing corridors for motorway construction and that "we will be able to build more motorways than in the past."
The rate of motorway construction in Poland has been a source of derision for a number of years now. Various methods have been proposed to fund and speed up the expansion of the road network and some of these, such as the 'winiets' system, which was to involve drivers purchasing a windshield sticker to verify their right to use the motorway, are now dead and buried. Now that Poland is a member of the EU, however, it can count on assistance from cohesion funds and the European Reconstruction and Development Fund to move this vital element of infrastructure forward.
The Gdansk Transport Company (GTC) is a special-purpose concern established purely to deliver this section of the A1, the tender for which it won in 1997. Skanska BOT, part of the Swedish Skanska group, has a 51 percent stake in GTC and the South African Intertoll and the Polish NDI are its other shareholders. After seven years of negotiations with the government, to thrash out exactly how the road would be delivered, GTC was finally granted its license in August this year.
The Build-Operate-Transfer (BOT) system is currently operated in Poland on two sections of motorway: that on the A4 between Kraków and Katowice and on the A2 between Poznan and Wrzesnia. In these situations a private company, the concessionary, has secured finance for the construction and management of the road, for which it bears responsibility for a twenty to thirty year period, before handing over ownership of the motorway to the state. During the 'Operate' period it attempts to recoup the costs of the initial construction by charging users a toll fee, which is possible if the volume of traffic is high enough. This, however, does not apply to the Gdansk-Torun road, which is why the 'shadow toll' innovation has been thought up as part of a public private partnership.
"In our case," says Bernard Pisarski, commercial director of GTC, "the volume of traffic is too low to pay for itself. The economic benefits of the motorway will be huge of course but as a 'financial box', as it were, it doesn't pay off. That's why the state has had to help the concessionary [GTC] and we're pooling our resources to build as a public private partnership."
The 'shadow toll' system will involve drivers paying tolls as they do on the A4 and A2 sections but the money collected will go to the government rather than to the concessionary, which means the former will be setting the toll rates. "GTC will take on the risk for construction," says Andrzej Maciejewski of the General Directorate of Roads and Motorways, "and the government will take on the risk for the number of cars that travel along the road."
GTC will benefit from the 'shadow toll' if it manages to attract traffic above and beyond the forecasted minimum level. For each car in excess of this, part of the toll revenue earned will go to GTC's shareholders, though a percentage will also be used for maintenance of the motorway; the rest will go to the state.
The 'shadow toll' solution was reached by both government and GTC when it was acknowledged that the traffic would not be heavy enough to pay for the project and the option of setting unusually high tolls was clearly a non-starter in a country of limited incomes. The public private partnership means, according to Pisarski, "that the traffic risk is incorporated into the project." With a straightforward toll scheme, he adds, there would be no way of "securing loans from the banks but with this we can get relatively inexpensive finance. That's why both parties thought this [the shadow toll] would be more economically viable."
Of the prospects for the rest of Poland's motorway network Andrzej Maciejewski maintains that the government is currently "spending five times more money" than previously in preparing corridors for motorway construction and that "we will be able to build more motorways than in the past."
