The fact that no public-private partnership (PPP) contract has been signed so far by the administrator of Poland’s public roads and highways, the General Directorate for National Roads and Motorways (GDDKiA), doesn’t mean that there is something wrong with the current PPP law. Quite to the contrary: GDDKiA’s general director Lech Witecki has new ideas how to use the law, he said at a meeting with the AmCham Real Estate Committee. Witecki came to see the representatives of AmCham affiliated companies for the first time, to get feedback from them that, he said, he hopes he will use.

Witecki said that GDDKiA intends to execute three projects using the PPP model.

“One has not yet been selected so I can present only two,” Witecki said. “It is not a secret that the A2 highway from Warsaw to Terespol is planned be built by 2012. But our goal is to have the highway built earlier than that. So, we plan to open a tender for that project under the PPP framework. But the challenge is to put together a financial model for it. We need a private partner who would put in the money it needs upfront. We plan to start that in early 2010, and we have already obtained some backing from the Ministry of Infrastructure for a PPP solution. We still have to wait for the official decision from the ministry. But we plan to use the time in 2009 for obtaining all necessary permission.”

Witecki would not reveal any details of the project, however, arguing that first the Ministry of Infrastructure has to publish an official statement about the Warsaw-Terespol expressway.

Another PPP project on the GDDKiA’s mind, and one that so far has not been confirmed by the Ministry of Infrastructure, is an undersea tunnel that would link the city of Świnoujście with the mainland. If built, it would be the first undersea tunnel built in Poland using the PPP model. For smooth execution of this project, GDDKiA plans to resort to the experience of road operators abroad who have built similar tunnels using the PPP model.

“We have spent a lot of time and money to get access to the best of experience offered by our partners abroad,” Witecki said.

Along with the two projects, GDDKiA plans to open a tender for a roadway bridge to be built using PPP. Here, however, for Poland’s road administrator, the project is more of an experiment than anything else.

“We haven’t selected what bridge and where it is going to be, but we want to use this experience to find out whether PPP can actually work in the case of bridge projects.”

At the helm of GDDKiA for a year, Witecki has been charged with the responsibility of reviving road construction projects that had been nearly brought to a halt last year. In his view, the problem is that all aspects of road-building are time-consuming, including those that come before the actual construction takes place: obtaining all the licenses and documentation.

In order to cut the time it takes to have all administrative aspects ready before a project starts on the ground, GDDKiA decided to assign its deputies to all companies concerned to help them with the red tape they are supposed to go through with central and local government agencies.

By December last year, with a no-surprise scenario in mind, GDDKiA reviewed projects worth PLN 20 billion, which included tenders. This year Poland’s road and highway administrator plans to open tenders for 62 different projects, together worth an estimated PLN 29 billion.

“I’m sure that we will be able to execute those projects,” Witecki said.

He added that the current economic crisis works to the GDDKiA’s advantage because due to the worsening market conditions, construction companies pay closer attention to the tenders run by the agency, and the winners are not likely to exceed the agreed budgets—a significant improvement compared to what has been a bad practice in the past.

“There is growing competition in pitching for projects,” Witecki said. “Before, only 25% of all companies invited to a tender would respond. Today the response rate is nearly 100%. As a result, well-prepared companies take part in each tender. They have a well-calculated cost estimate and are not inclined to go over it.”