Railway in Poland: PKP Unable to Take Advantage of EU Money

Experts say that there is no way Poland could make use of more than 66% of the sum provided from the EU Funds for infrastructure investments that are managed by Poland's national infrastructure manager PKP PLK.

Experts employed by PKP PLK's contractors claim that according to the optimistic scenario PKP PLK is capable to take advantage of PLN 1bn (EUR 249m) of the PLN 1.7bn (EUR 423m) sum programmed by the EU Funds for rail infrastructure projects in 2006. The reason is that there are huge delays in preparing the projects for realisations.

— This is because of PKP PLK' lacks money to return VAT owings to the contractors, but there is also the problem of lack of skilled designers and investment planning professionals — says Przemysław Wróbel, vicepresident of PRK7,one of PKP's contractors.
In the past there were no rail infrastructure investments and therefore no professionals were trained. The ones that remained are incapable of working on all the current projects. PKP PLK is forced to perform more and more projects in as 'develop and build' project. That way it is the contractor who has to find a skilled rail infrastryucture engineer.

— There is a problem, that is a fact. To solve it we have to train more and more people, otherwise we'll have to seek skilled men abroad — says Andrzej Wach, CEO of the PKP Group.

— We plan to employ twice as much people responsible for investment projects at PKP PLK - says Jerzy Polaczek, minister responsible for transport.

What is more there is also the VAT problem. The EU does not allow PKP PLK to return the 22% VAT stake to the contractors from the EU money. And the company does not have its own resources to cover this cost.

— We'll try to make these procedures easier — says Mr Polaczek.

Andrzej Wach says that PKP should balance the current accounts to get rid of the VAT problem. But to achieve that the regions should provide more money to PKP Regional Railways, which hast the biggest debt to PKP PLK. This year PLN 550m (EUR 137m) is needed.

This week PKP PLK signed a deal for modernising the first section of Warsaw - Lodz line. The contractors are Profil and Koltech Inwestor. The contract is worth PLN 12.7m (EUR 3.2m). The consortium received a retainer with VAT included. Meanwhile PKP PLK will apply for commercial credit.
Source: railway-market.pl