Public Private Partnership + EU Funds in Poland general overview and the future outlook

1.PPP as an instrument for implementation of regional policy 2.PPP Platform - national PPP taskforce 3.Model of PPP - EU grant blending procedure 4.Governmental experience with PPP 5.Municipal experience with PPP 6.Hybrid projects in Poland 7.PPP in the financial perspective

PPP as an instrument for implementation of regional policy National Strategy for Regional Development suggests public private partnerships as a desired instrument for investments at the regional and national level There is a need to maximise economic effectiveness of public infrastructure during the investment and maintenance phase – Value for Money PPP model requires better preparation of projects but provides a higher standard of public services

PPP as an instrument for implementation of regional policy Financing of projects Not all infrastructure investments are capable of being financed by the private sector without public support – a need to implement availability payments and/or investment subventions. EU funds cannot be used for availability payments but they are a very effective source (component) of investment subventions The legal framework is sufficient Although there is a lack of verified solutions and standardized procedures as well as answers to doubts and problems faced (e.g. step in rights; contracts) Lack of experience Both at the governmental and municipal level – learning by doing is the suggested solution Municipalities were self-learners without government support but this has changed recently

PPP Platform national taskforce Establishment of the PPP Platform – an instrument for cooperation and knowledge exchange among public institutions Agreement setting up the PPP Platform - 26 January 2011 Recipients of the support – open formula, accessible for all public institutions Financing – Technical Assistance Operational Programme (EU funds) Administration – Department for Preparation of Individual Projects at the Ministry of Regional Development

How does the PPP Platform work? PLATFORMA PPP Administration: Department for Individual Projects’ Preparation, MRD External experts Working Groups Strategic decisions: Steering Committee Meeting, PPP Platform Public sector (Municipalities) EC EPEC JASPERS

PPP Platform activities Review and analysis Legal changes Finacial issuses Promotion Training Combining EU Funds with PPPs (Blended/Hybrid projects) Working groups (supporting PPP projects) International co-operation

Model PPP - EU grant blending procedure Procurement process EU grant application process Ex-ante analysis, Market testing Grant application Application evaluation on national level and JASPERS Grant agreement Transmission of the application to the EC Evaluation of the application by the EC EC decision Tender publication Negotiations Appointment of the private partner Financial closure Application update month 1 month 8 month 9 month 10 month month month Schedule

10 How to combine UE application with selection of private partner process and not to loose grant? Unknown amount of loan / financing costs Unknown services prices (Gate fees) Unknown revenues Unknown amount of private financing Unknown financing gap Unknown amount of subsidies The greatest difficulty is the need to reconcile the two parallel processes: applying for EU funds and selecting the private partner. the vicious circle

Governmental experience with PPP (without EU grant) Concession infrastructure projects: A1 motorway (two stretches of the total length 152 km, concession dated 1997, stretch I operational since 2008, stretch II since November 2011) A2 motorway (two stretches of the total length 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 Construction of The Court at Nowy Sącz City under preparation

Municipal experience with PPP Source: MRD

Hybrid projects in Poland Waste Management System for the City of Poznań MRD employees participate in the competitive dialogue procedure as members of the support team for the City. The preparation of this investment has shown how complex is the path of applying for an EU grant for a PPP project. Thermal Baths in Gostynin– involvement of experts from Jaspers Thermal Baths in Solec Zdrój – financial closure reached

Thermal Baths in Solec – Zdrój City Hybrid (PPP + UE), project is now under construction. Financial closure reached. Both co-financing agreement (2011) and concession agreement (2010) were signed. Beneficiary of the project: Solec – Zdrój Municipality. Responsibilities of the private partner: design, build, finance, operate. Remuneration of the private partner - user payments. Agreement signed for 27 years. Total eligible cost of € 4 million, including: EU funds € 1.7 million pub. national contribution € 0.30 million private contribution € 2 million ~1 EUR = 4 PLN

PPP in the financial perspective October 6 th 2011, the European Commission unveiled a legislative package for cohesion policy for Then, on the basis of this material the Permanent Representation of the Republic of Poland to the EU in Brussels, developed proposals for the new regulations regarding PPP projects, including: 1.PPP should be clearly recognised as one of the potential delivery modes for the CSF Funds; 2.Creation of the separate definition of ‘beneficiary’ under PPP operation. The proposed definition prevents the private body under a PPP operation from being the beneficiary as under PPP operations the party initiating the operation is the public body while the party implementing it is the private body; 3.Creation of legal basis for the situation, when the beneficiary is a public body, but on the basis of PPP contract the expenditure is incurred and paid by a private sector body, which is responsible for construction works.

Useful links

Department for Individual Projects’ Preparation Ministry of Regional Development in Poland tel fax Thank you for your attention!