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 taskforce3. Model of PPP - EU grant blending procedure4. Governmental experience with PPP5. Municipal experience with PPP 6. Hybrid projects in Poland7. PPP in the 2014-2020 financial perspective

PPP as an instrument for implementation of regional policy

• National Strategy for Regional Developmentsuggests 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 institutionsAgreement 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

Pu

blic secto

r (Municipalities)

ECEP

EC

JASPERS

PPP Platform activities

Review and analysis

Legal changes

Finacial issuses

PromotionTraining

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 theprivate partner

Financial closure

Application update

month 1

month 8

month 9

month 10

month 13 - 21

month 14 - 22

month 15 - 23

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

Polish PPP market during the years 2009 - 2011(125 public procurement notices in total)

103

23

40projects completed (PPP agreement)

projects in preparation currently

under procurement

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 2014-2020 financial perspective

• October 6th 2011, the European Commission unveiled a legislative package for cohesion policy for 2014-2020.

• 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.

• www.ppp.gov.pl• www.eib.org/epec• www.jaspers-europa-info.org

Useful links

Department for Individual Projects’ PreparationMinistry of Regional Development in Poland

tel. +48 22 461 39 44fax +48 22 461 33 66

e-mail: marta.witkowska@mrr.gov.pl

Thank you for your attention!