PPP Platform – Polish PPP Taskforce

Tasks and development

„What makes municipal PPPs different?”EPEC Workshop, Brussels, Open Days 2011

Presentation plan

1. Poland’s experience with PPP2. PPP as an instrument for implementation of

regional policy3. PPP Platform => national PPP taskforce

4. Support by EU funds

for PPP taskforce

for PPP projects

5. EU grant blending with PPPs in practice

Poland’s experience with PPP

Governmental PPP/concession infrastructure projects:– A1 motorway (two stretches of total 152 km, concession

dated 1997, stretch I operational since 2008, stretch II since November 2011)

– A2 motorway (two stretches of total 256 km, concession dated 1997, stretch I operational since 2004, stretch II since December 2011)

– A4 motorway (one stretch of 60 km, concession dated 1997, operational since 1996

– New A1 and A2 motorway stretches despite strategic location in central Poland proved unsuccessful – procurement finalised but the financial closure was not reached

– Further attempt to execute the A1 motorway stretch to Silesia in PPP is ready to start – decision depends on the off balance sheet’ confirmation of EUROSTAT

Poland’s experience with PPP

Municipal PPP projects:– Wide range of projects under preparation and

implementation– Monitored by several different entities - no official and

reliable data available about on-going projects - two car parking projects have been succesfully executed (Poznań, operational since 2006; Kraków, operational since 2009), in 2009-2010 only nine projects achieved financial closer – the majority of projects are of minor value)

– According to different sources about 50 municipal projects have been currently in the preparatory phase

PPP as an instrument for implemention of regional policy

• Achievement of goals set out by the National Strategy for Regional Development depends on investments at an average annual level of at least 3% GDP

• Limited possibilities of public spending (new indicators of public debt from 2014)

• Growing role of private financing, loan funds, credit guarantees and other financial instruments

• Need to maximise economic effectiveness of public infrastructure during investment and maintenance phase - VfM

• National Strategy for Regional Development suggests public private partnerships as a desired instrument for investments at regional and national level

PPP as an instrument for implementation of regional policy

Financing of projects• Not all infrastructure investments are capable to be financed

by the private sector without public support – need of availability payments and/or investment subventions.

• EU funds can not be used for availability payments but is very effective source (component) of investment subventions

Legal framework is sufficient• But there is lack of verified solutions and standardized

procedures as well as answers to doubts and problems faced (e.g. step in rights, corporate responsibility, subcontracting, tax issues, depreciation)

Lack of experience• Both at the governmental and municipal level – learning by

doing is the suggested solution

General conclusions:

The story is about money–PPP is regarded as a mean for closing the funding gap for the transport infrastructure investments–PPP at municipal level is also regarded predominantly as a mean for closing the funding gap for investments

Polish economy is more trustworthy and the capital is not a problem as in the past but / if not:the financial crisisvery conservative (restrictive) policy of Polish public debt and budget

= > almost the only interesting PPP models are these off-budget and public debt< = but for projects this means problems with bankability

General conclusions:

– Despite a few PPP road projects no standardized procedures or guidance have been elaborated and published

– Problems with life-cycle approach, project assumptions, output specification and bankable business model

– Problems with procurement models and procedure– Municipalities were self-learners without government

support but this has changed recently

Are municipal PPPs different?

• State projects – relatively few but of great value; motorways, national roads, railways infra and rolling stocks, HSR (5 bln EUR investmet under preparation), railway stations, airports, flood protection infra, state administration buildings, prisons, universities, clinical hospitals

• Big communities (major cities, aglomerations, regions) projects – relevant to state investments; regional roads, railways (less infra, mainly rolling stocks and railway stations), city transport (undergrounds, parkings, roads, bridges, (fast) trams), environment protection (seweges, water supply, wastes), energy (heating, street lighting), hospitals, schools, culture (museums, theaters, music halls), sport & recreation (swimming pools, aquaparks, recreation areas, parks, zoos

Are municipal PPPs different?

• Small communities (counties, cities, villages)- very big differences as concerns:size of projects, expenses, financial sources / instruments, political / legal risks, time perspective, knowledge, professional skills

= > specially big needs in the: programming and pre-feasibility phases organisation and financing of the project

preparation stage financing of the project

Conclusions:

Increase of the public potential is possible by:

BETTER INSTITUTIONAL COORDINATION AND KNOWLEDGE TRANSFER

PROVIDING COMPREHENSIVE GUIDANCE AND TEMPLATE DOCUMENTATION

PROMOTING BEST PRACTICE WITH THE AIM TO STANDARDIZE PROCEDURES

Polish PPP market – preparation of projects

Polish PPP market from 2009 to IQ 2011(118 project attempts in total)

59

20

50executedin preparationineffective procedure

Source: Investment Support market reports for 2009, 2010 and IQ 2011

Polish PPP market - conclusions:

– Many tenders have been cancelled due to lack of agreement with the private partner during the negotiation phase

– There were efforts made by the authorities to reissue the tender procedure after modification of the procurement documentation but often without sufficient prior market consultation

– Out of the small number of successful tenders many contracts were signed after a negotiation phase with very limited competition among private bidders which lead to contract signature on unsatisfactory terms for the public

OBVIOUS NEED OF:

POLITICAL WILL NATIONAL TASKFORCECOUNTRY’S NETWORK

After years there is political will in PolandThere is growing cooperation between state and communities

The problem is how to built the national and community competences (taskforce):

without moneywithout acceptance to increase the public administrationwithout new administration unites

Establishment of the PPP Platform

Establishment of the PPP Platform – an instrument for cooperation and knowledge exchange among public institutionsRecipients of the support – open formula, accessible for all (but only) public institutionsFinancing – Technical Assistance Operational Programme (POPT):

- Measure 3.1 Functioning of the institutions involved in the NSRF implementation

- Measure 3.2 Individual key projectsAdministration – Department for Preparation of Individual Projects at the Ministry of Regional Development

Establishment of the PPP Platform• Approval of the Task Plan for PPP at the MRD by the

Minister in September 2010• Conclusion of the Agreement setting up the PPP

Platform (26 January 2011) by 9 ministers, 3 central institutions, the state bank BGK, regional associations and municipalities

• Launch of the website www.ppp.gov.pl– 31 January 2011

• Establishment of the Steering Committee• Priorities for 2011 agreed on by the Steering Committee • Publication of the PPP Forum• Start of sectoral and horizontal (finance, legal,

procurement) Working Groups

PPP Platform – goals

• Create a cooperation network in order to ensure the exchange of knowledge, best practice and verified solutions for the preparation and implementation of PPP projects;

• Provide public entities with access to opinions, surveys, studies, audit reports, model contracts, project documentation and other documents concerning PPP;

• Initiate and support preparation and execution of pilot PPP projects;

• Support for public entities implementing PPP projects;• Promotion of PPP as an instrument for effective

implementation of public tasks.

PPP taskforce – national network

Use of the EU Funds Information Points • Information• Knowledge dissemination • Helpdesk • Workshops

Start from 2012 after training of the staff

Network of EU Funds Information Points – basic information (September 2011)

109 points:

Central European Funds Information Point in Warsaw,

16 Main Information Points,

91 Local Information Points,

Information Point at the Polish Information and Foreign Investment Agency (PAIIZ),

EU cooperation framework

Dialogue with EU institutions involved:• European Commission• EIB, EPEC, JESSICA, JASPERS

Special role of EPEC

Cooperation with other taskforces:• Partnerschaften Deutschland• Croatia• Ukraine and Georgia

Krzysztof SiwekDepartment for Individual Projects’ Preparation

Ministry of Regional Development in Polandtel. +48 22 461 39 44fax +48 22 461 33 66

e-mail: krzysztof.siwek@mrr.gov.pl

Thank you for your attention