World financial crisis enters Polish roads

07-10-2008, 15:29

It’s hard to talk Polish banks into co-financing of infrastructural projects. Fortunately, there are non-commercial institutions providing funds for roads.

Next year, the construction of 430km of high roads will be launched. The projects should be realized in public-private partnership system. Companies may have problems with finding financing. They complain that it’s very hard to lend money. GTC construction company is lucky as it plans to lend EUR 575m from the European Investment Bank, EUR 350m from SEK and PLN 150m (EUR 43.3m) from NIB. Others are not that lucky. According to unofficial sources, banks don’t want to provide more than EUR 150m per project.
“The section of A2 from Nowy Tomysl to Swiecko is evaluated at EUR 1.6bn. Initially, we planned that the interests would amount to 1.1-1.2 percent but they are much higher now. Recently, at one of high-way projects in the UK, they reached 1.7-2.0 percent”, Robert Nowak, the CEO of Autostrada Wielkopolska said.

The company hopes to get 50 percent of necessary financing at EIB. The company planned to re-finance costs of the section of the same highway which it had already built. Now, it has decided to wait till the crisis is over.

Stricter policy of banks and growing interests cause that road building projects won’t get any cheaper despite the fact that material prices are falling.

“High way projects bring much different risks than projects which caused the crisis on the financial market. I hope that the public side is aware that we need to negotiate contracts acceptable by banks. Talks with the latter are not easy. Financing is not easily available and is more expensive than it used to be”, Mieczyslaw Skolozynski from Stalexport Autostrady commented.

(PLN 1 = EUR 0.289)

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