To the attention of Mr Jerzv Solecki Director of the ERDF ... · the Regional Road...

To the attention of Mr Jerzv SoleckiDirector of the ERDF Department Marshall Office of the Silesian Voivodeship ul. Ligonia 46 40-037 Katowice Poland

Luxembourg, 13 December 2016 SG/AS/JASPERS/2016-1574/AA/HG/mla

Subject: JASPERS Independent Quality Review Report for the project “Construction ofthe Regional Road Racibórz-Pszczyna on the section running through the City of Rybnik - stage I” (JASPERS No. 2016 152 PL IQR ROD)

Dear Mr Solecki,

We thank you for the good co-operation on the project “Construction of the Regional Road Racibórz- Pszczyna on the section running through the City of Rybnik - stage I” with our JASPERS team.

Attached we are sending you the JASPERS Independent Quality Review Report for the above mentioned project.

We thank you for your support and remain with best regards,

Enclosure:IQR Report for 2016 152 PL IQR ROD “Construction of the Regional Road Racibórz-Pszczyna on the section running through the City of Rybnik - stage I” project

A. A magro Director of JASPERS

H. Goldsmith Acting Head of IQR Division

JASPERS c/o E uropean In v e s tm e n t Bank

98-100, b ou levard Konrad A denauer L-2950 L uxem bourg V (+352) 43 79 -1 (+352) 43 77 04 w w w .jaspers-europa-in fo .o rg c» jaspers iae ib .o rg

http://www.jaspers-europa-info.org

INDEPENDENT QUALITY REVIEW REPORT

The independent experts declare that:

1. They have fulfilled the requirements o f Article 23(2)(b) o f Commission Delegated Regulation (EU) N o 480/2014.

2. They have appraised the project in accordance with all the criteria set out in Annex II to that Regulation.

Member State Republic o f Poland

Region and project location Silesia, City o f Rybnik

Project name“C onstruction o f the Regional Road Racibórz-Pszczyna on the section running through the City o f Rybnik - stage I”(Rybnik bypass road)

Beneficiary City o f Rybnik

Managing Authority M arshal O ffice o f the Silesian V oivodeship

Independent experts reference 2016 152 PL IQ R R O D

Task Manager:

Pawel Malinowski

Signature and Date:

Head o f IQR Division:

Hugh Goldsmith

Signature and Date:

ll̂ liIn agreement with: A. Almagro f t\

Head o f JASPERS \ J ) J\Ato>

D is c la im e r 'ITiis JASPERS Independent Quality Review Report has been prepared a t the request o f the relevant Managing Authority in Ime

with Articles 101 and 102.1 o f the Regulation (KU) N o 1303/2013. It presents a quality review o f the major project based on inform ation made

available to JASPERS. In case the inform ation used for the project notification has been changed after this review, the reader o f this

report should be aware that som e o f th e statem ents and justifications expressed m ay no longer be valid.

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Glossary:

AADT

BCR

Birds Directive

Annual Average Daily Traffic

Benefit to Cost Ratio

Council Directive 2009/147/EC on the conservation of wild birds

CBA

CBA Methodology

Cost-benefit analysis

The methodology for Cost-Benefit Analysis as defined in Annex III to the Implementing Regulation

CC Climate Change

CDR Commission Delegated Regulation (EU) 480/2014

CIR Commission Implementing Regulation (EU) 2015/207

CO2e Carbon Dioxide Equivalent

CPR Common Provision Regulation (EU) 1303/2013

DK National Road

DW Voivodeship (Regional) Road

EU European Union

EIA Directive Council Directive 2011/92/EU on Environmental Impact Assessment

EIB European Investment Bank

ERDF European Regional Development Fund

FIDIC International Federation of Consulting Engineers

GHG Greenhouse gases

Habitats Directive Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora

ISPA Instrument for Structural Policies for Pre-Accession

MA Managing Authority

MoE Ministry of Environment

NUTS

NTS

Nomenclature for Units of Territorial Statistics

Non-Technical Summary of the EIA Report

O&M Operations & Maintenance

ROP Regional Operational Programme

PIU Project Implementation Unit

SEA Directive Council Directive 2001/42/EC on Strategic Environmental Assessment

This IQR Report is based on the following groups of documents that were received from the Managing authority (MA):

Document Document date (final version)

Information on major project, including Feasibility Study documents and Economic and Financial analysis spreadsheets prepared in PLN

07/11/2016

Environmental documentation 07/11/2016

Action Completion Note of JASPERS 27/10/2016

PART A of the Notification Form in draft 25/11/2016

In addition the MA supplied various written responses to requests for clarifications from JASPERS.

The project has previously received assistance from JASPERS Advisory and a JASPERS Action Completion Note has been issued.

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Please confirm that all of the following conditions are fulfilled: the operation is a major project within the meaning of Article 100 of Regulation (EU) No 1303/2013; the major project is not a completed operation within the meaning of Articles 2(14) and 65(6) of that Regulation; the major project is included within the relevant operational programme(s).

Put x where appropriate

Give details

Yes X The project complies with the major project definition laid down in Art. 100 of Regulation (EU) No 1303/2013, as:

The project is an indivisible task of a precise economic and technical nature, with clearly identified goals. This major project, named Stage I, forms the core of the Southern road bypass of Rybnik. A further extension of the road bypass, named Stage II, is planned to be completed in the current (2014-2020) programming period as a non-major project. Stage I is not dependent on Stage II for its economic viability; and

The project’s total eligible cost is EUR 92,224,431.19. Eligible costs exceed the amount of EUR 75,000,000.

The major project is not a completed operation within the meaning of Articles 2(14) and 65(6) of Regulation No 1303/2013, as the timetable for implementation envisages end of construction by June 2020.

The project is included in the list of major projects to be implemented under the Regional Operational Programme of Silesia 2014-2020 (CCI 2014PL16M2OP012, hereinafter “ROP of Silesia 2014-2020”). This major project has been selected by the Managing Authority through a competitive process according to the principles defined in the ROP of Silesia 2014-2020.

No

1. THE BODY RESPONSIBLE FOR IMPLEMENTATION OF THE MAJOR PROJECT, AND ITS CAPACITY

Summarise relevant information on the body responsible for implementation of the major project, and its capacity including technical, legal, financial and administrative capacity.

The main beneficiary of the project is the City of Rybnik, which is a local government unit responsible for the provision of the regional road infrastructure on its territory. The city oversees the preparation, construction, operation and maintenance of regional roads within its borders. The neighbouring City of Żory is the partner of the City of Rybnik in this project, because part of the constructed road infrastructure will be located on the territory of the City of Żory.

Technical capacity

The Roads Department of Rybnik City Office is a specialised unit responsible for new road investments and maintenance of the road network within Rybnik, and will be responsible for project implementation in line with applicable national standards for roads of this capacity. The department has 22 suitably-qualified staff with considerable experience in implementing road projects; over the last decade, it oversaw the implementation of roads projects in the vicinity of Rybnik. Several of the staff working for the Roads Department has experience in overseeing large, complex construction projects.

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In case of the maintenance of the section of DW935 road constructed on the territory of the City of Żory, a specialised road department of this city will oversee maintenance and any future rehabilitation of this road section.

The construction supervision over the investment and the core construction works will be entrusted to external companies with adequate competence and experience.

Legal capacity

The City of Rybnik is a city with the rights of powiat (equivalent of a county). Based on Article 19 (5) of the Act on roads the President of the City is responsible for the management of all public roads, except for motorways and express roads. The constructed road section will be a voivodeship (regional) road, and therefore the relevant local government unit (a city with county rights) will be responsible for all investments. In view of the fact that a part of the investment will be implemented within the area of another city, i.e. Żory, both local government units concluded an agreement based on Article 74 of the Act on local self-government, in which the City of Żory delegated to the City of Rybnik the necessary rights to implement the project. Both cities will share the costs of the investment.

The land for the voivodeship road, in accordance with the relevant provisions of the law, shall be purchased by the Beneficiary on behalf of the Silesian Voivodeship. The land associated with accompanying infrastructure shall be owned by the local government unit and in this case is already in the possession of the Beneficiary.

Financial capacity

To enable it to financially implement the project, since 2012 the City of Rybnik has been reducing its’ debt by running operational surpluses (meaning operating expenses have been significantly lower than income). In 2012-14 operational surplus ranged from PLN 69 million (EUR 16.4 million) to PLN 97.6 million (EUR 23.1 million), which placed Rybnik amongst the best-performing cities in Poland.

Fitch Ratings in July 2016 confirmed the City of Rybnik’s rating of “A+(pol)” with a stable outlook. The City has sufficient debt capacity to draw and service the debt required for financing the investment.

The City of Żory will participate financially in the investment and the maintenance of the road DW935 section on its territory (length of 425 m, approx. 4.2% of the length of entire project).

Administrative capacity

The beneficiary has significant experience in the implementation of infrastructure investments. Over the last 15 years, the City of Rybnik implemented over 90 investment projects co-financed by the external funds (including financed from the European Union structural funds). Almost 20 of these investments were related to the construction or reconstruction of public roads.

The City of Rybnik has already successfully implemented investment projects of a similar scale. In the years 2001-2010 the project "Construction of sanitary sewage in municipalities of Rybnik Gaszowice, Jejkowice, which loads the upgraded sewage treatment plant in Rybnik” of total cost of EUR 122 million was implemented with the support of ISPA and later the Cohesion Fund.

The Project Implementation Unit was formed in 2013 as a special interdepartmental team of specialists in the City administration appointed for the project implementation and management. The 1st Deputy of President of the City, supervising over inter alia the Roads Department, was previously employed on managerial positions in General Directorate for National Roads and Motorways and has significant experience in the preparation and implementation of large infrastructure projects.

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Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement.


Give a statement and justification

Yes X The project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (CDR) EU No 480/2014.

There is sufficient evidence of the capacity of the beneficiary (City of Rybnik) to manage the project in the implementation and operational phases, considering that:

The City of Rybnik has sufficient technical capacity and experience with the implementation and operation of road projects.

The beneficiary has the necessary legal rights to implement and operate the project. Land plots necessary for the project implementation are already available to the Beneficiary.

The beneficiary has sufficient financial capacity to implement and operate the project. The funds for project implementation have been allocated by the City of Rybnik in its multiannual budget in amount of PLN 453.7 million (EUR 108.2 million) in years 2016-2020. Planned annual expenditure on O&M of the project amounts to about EUR 357 thousand and constitutes ca. 0.2% of the total City’s budget and 24% of the resources available for maintenance of the road network (EUR 1.5 million in 2016), and therefore will lead to a significant increase in the total annual road maintenance budget of the City, but not a significant increase in the overall City budget. The planned capital expenditure—for periodic rehabilitation, replacement or reconstruction of the road—in 2031 and 2041(of EUR 3.3 million each) is expected to be allocated in future annual budgets. The City of Żory committed in form of agreement with the City of Rybnik to participate financially in the implementation of the project proportionally to its part of the road, and will provide budgetary funds for its maintenance. The investment and maintenance costs associated with this investment will not constitute a significant financial burden to the City of Żory.

The beneficiary has sufficient administrative capacity to execute the project. The proposed organisation of the project implementation and the staffing structure is adequate to the scale of the investment.

No

2. DESCRIPTION OF THE INVESTMENT AND ITS LOCATION

Summarise relevant information on the description of the investment and its location.

Existing situation

Rybnik is a city of about 140,000 people in the south-western part of the Silesian Voivodeship. About 6 km to the east of Rybnik lies the A1 Motorway, which is a main north-south corridor through Poland that links the main port of Gdansk in northern Poland to Slovakia, via Torun, Lodz, Czestochowa and Katowice. The existing link between Rybnik and the A1—the regional road DW935—is a highly-urbanized single carriageway (1x1) road, carrying some east-west traffic (e.g., from Rybnik to neighbouring Żory), as well as a substantial number of goods vehicles and personal cars wishing to access the A1 motorway.

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During peak times the road is congested leading to low average speeds and long delays. The existing DW935 road has many at-grade junctions, pedestrian crossings and accesses (to houses and shops and public buildings), which negatively impact on safety, reliability and performance. The annual average daily traffic (AADT) varies by section but in 2015 reached a maximum of about 26,000—well above the design capacity of the existing road.

Main project components

The project involves the construction of about 10.2 km of dual carriageway (2x2) road with a total of 5 grade-separated interchanges. The project will link the A1 motorway with the DK78 to the south-west of Rybnik. An additional link from the DK78 to the DW935 to the west of Rybnik (section V, see map below) is scheduled to be completed before 2020. Together these links will form a complete east-west (DW935) bypass of Rybnik (see map below).

Map 3. Voivodeship road DW935: planned section alignment (red); existing alignment (blue)

Source: Feasibility Study

The project will divert most of the medium-long distance traffic on the DW935 away from congested urban roads in Rybnik to a higher-speed but safer dual carriageway with median barriers separating opposing flows and with accesses limited to junctions which on average are spaced about 2km apart. The new road and its’ grade-separated interchanges will provide efficient access to Rybnik for local traffic, and avoid the need for travelling on the existing unsafe, congested DW935 road in Rybnik (see blue line on map above).

The project will comprise:

construction of 10.221 km of dual carriageway road;

construction of 5 grade separated interchanges;

construction of auxiliary engineering structures (e.g., bridges and viaducts);

(re)construction and realignment of nearby roads;

relocation of utilities;

additional associated infrastructure (e.g., drainage, road lighting, safety barriers, noise

barriers); and

road safety measures.

The majority of the road will lie within the Rybnik municipality; however a small section of about 0.425 km lies within Żory administration (see map above). The project is one of a series of improvements anticipated on the DW935 corridor between Raciborz and Pszczyna.

Planned sections I to IV forming this project

Additional section V, not in this notification

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Eligibility

The project will be funded by the European Regional Development Fund (ERDF) through the ROP of Silesia, 2014-2020. The project is consistent with the objectives and purposes of Priority Axis VI of the OP and action 6.1 (i.e., “Improved availability of Voivodeship roads”). The project is proposed under the thematic objective 07 “Promoting Sustainable Transport and Removing Bottlenecks in Key Network Infrastructure”, and is located in NUTS III location code PL227. The project has not yet been completed.




Yes X The project meets the relevant criteria for quality review set out in Annex II to CDR (EU) No 480/2014.

The project is located in the Silesian Region of Poland and is therefore within the area covered by the ROP of Silesia 2014-2020. The area is eligible for ERDF Financing.

A sufficient project description is provided accurately describing both the existing situation and the chosen technical solution.

The project complies with the eligibility rules set down in Regulation (EU) No. 1303/2013 such as Art. 65 (Eligibility of Expenditure and Durability) and in the Cohesion Fund Regulation No. 1301/2013, mainly Art. 3 (Scope of Support from the ERDF).

The project exceeds the total eligible costs (after taking into account revenue generation) threshold of EUR 75 m and is therefore correctly considered a major project.

The Managing Authority has confirmed compliance of the project costs with national eligibility rules.

No

3. EXPLANATION AS TO HOW IT IS CONSISTENT WITH THE RELEVANT PRIORITY AXES OF THE OPERATIONAL PROGRAMME(S) CONCERNED, AND ITS EXPECTED CONTRIBUTION TO ACHIEVING THE SPECIFIC OBJECTIVES OF THOSE PRIORITY AXES AND THE EXPECTED CONTRIBUTION TO SOCIOECONOMIC DEVELOPMENT

Summarise relevant information on project objectives and its consistency with the relevant priority axes of the operational programme or operational programmes concerned, and its expected contribution to achieving the specific objectives and results of those priority axes and the expected contribution to socioeconomic development of the area covered by the operational programme, and measures taken by the beneficiary to ensure optimal utilisation of the infrastructure in the operation phase.

Project objectives

The main project objectives are to:

provide a fast and safe connection from Rybnik to the A1 motorway;

remove traffic from the current congested and unsafe DW935 road through Rybnik;

improve the attractiveness of Rybnik city for investment;

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reduce the harmful impacts (e.g., emissions, noise, health impacts) of road traffic on occupants of Rybnik; and

improve the safety of the road transport system.

These objectives are consistent with the priorities of the ROP of Silesia 2014-2020, in particular Priority Axis VI (transport) which has as an investment priority to enhance “regional mobility by connecting secondary and tertiary nodes to TEN-T infrastructure, including multimodal nodes.

The project will contribute to the following Priority Axis result indicators:

No Indicator Unit Target (2023) This project

CO13 Total length of new roads km 59.5 10.2

Contribution to socio-economic development of the area covered by the OP

Once implemented, and in line with the overall objectives of the ROP of Silesia 2014-2020, the project is expected to contribute to the socio economic development of Rybnik city and surrounding areas by: reducing travel time and transport costs between Rybnik and the A1 motorway; directing cars and heavy goods vehicle traffic away from the existing congested DW935; reducing the number and severity of road accidents in Rybnik, and reducing the negative impacts of emissions of both non-greenhouse gases such as particulate matter (which negatively impact on local health), and greenhouse gases (GHG) on the residents of Rybnik.

The project will also help attract new investments by improving the liveability and working conditions for the local population; and add jobs during construction and operational stages of the project

Measures taken by the beneficiary to ensure optimal utilisation of the infrastructure in the operation phase

The new link between Rybnik and the A1 motorway will become the main route for traffic going east-west through Rybnik and for residents of Rybnik connecting to the A1.

Optimal utilization will be ensured through the provision of high-quality access for all motorized transport free of charge and on an equal and non-discriminatory basis. Convenient accesses to various districts of Rybnik will be provided through provision of grade-separated interchanges which will minimize delays and queueing at junctions. The demand model predicts 11,400-22,200 vehicles will transfer daily to the new road, thus substantially reducing delays on the existing road.





The project and its objectives are consistent with Priority Axis VI of the Operational Programme. The objectives are adequately defined for a project of this type. The proposed project will contribute to the objectives of the ROP of Silesia 2014-2020.

Once implemented, the project is expected to contribute to the socio-economic development of the region by reducing: travel time and transport costs; and harm to the environment caused by both GHG and non-GHG emissions.

Optimal utilization of the new link will be ensured by providing free access on a non-discriminatory basis to all motorized vehicles.

No

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4. TOTAL COST AND TOTAL ELIGIBLE COST

4.1 Summarize relevant information on the total cost, calculation of costs both in terms of its overall cost to achieve the expected objectives and unit costs, and total eligible cost taking into account requirements of Article 61 of Regulation (EU) No 1303/2013.

The estimated total cost of the project is EUR 102,646,028.59, of which EUR 92,224,431.19 represents the eligible cost. The only item presented as being ineligible is the part of land acquisition cost (EUR 10,421,597.40) that exceeds the limit of 10% of total eligible expenditure. VAT is considered eligible as VAT is non-recoverable by the City of Rybnik.

Building and Construction Costs are estimated at EUR 67,163,800.01, of which EUR 44.45% is related to structures (10 viaducts, 2 bridges, 1 elevated road section). Presented costs are based on a pre-tender construction and supervision cost estimate of the Beneficiary.

The construction cost per km for the entire project—EUR 8.1 million per km incl. VAT—reflects the high number of structures on a relatively short section of road (13 structures with a total length of 1291 metres on a 10.2 km section, including a 418.5m elevated section).

The total project cost does not include any allowance for either contingency or price adjustment.

Table: Summary cost estimate for the City of Rybnik – stage I

Cost Item Total Cost Ineligible Cost Eligible Cost

1. Planning / design fees 0.00 0.00 0.00 2. Land purchase 19,644,040.52 10,421,597.40 9,222,443.12

3. Building and Construction 67,163,800.01 0.00 67,163,800.01

3.1 Demolition of buildings 689,102.52 0.00 689,102.52 3.2 Road works, of which: 27,476,426.46 0.00 27,476,426.46 3.2.1 Earth works 4,532,333.03 0.00 4,532,333.03 3.2.2 Subgrade 11,405,656.44 0.00 11,405,656.44 3.2.3 Road surfacing/ top layer 7,369,878.90 0.00 7,369,878.90 3.2.4 Preparatory works 454,238.24 0.00 454,238.24 3.2.5 Finishing works 4,785,826.65 0.00 4,785,826.65 3.2.6 Culverts 463,530.02 0.00 463,530.02 3.2.7 Soil strengthening 2,955,685.18 0.00 2,955,685.18

3.3 Drainage 5,178,524.65 0.00 5,178,524.65 3.4 Lighting 17,546.97 0.00 17,546.97 3.5 Energy networks 699,959.48 0.00 699,959.48 3.6 Reconstruction of water supply networks 619,941.96 0.00 619,941.96 3.7 Reconstruction of wastewater networks 417,073.81 0.00 417,073.81 3.8 Reconstruction of gas networks 244,217.27 0.00 244,217.27 3.9 Reconstruction of district heating networks 349,934.23 0.00 349,934.23 3.10 Reconstruction of railway overhead lines 9,984.19 0.00 9,984.19 3.11 Landscaping 419,169.74 0.00 419,169.74 3.12 Traffic reorganisation/diversions 605,937.08 0.00 605,937.08 3.13 Engineering structures (overpass, bridges, etc.) 29,394,174.37 0.00 29,394,174.37 3.14 Noise screens 1,041,807.28 0.00 1,041,807.28 4. Plant and machinery or equipment 0.00 0.00 0.00

5. Contingency 0.00 0.00 0.00

6. Price adjustment 0.00 0.00 0.00

7. Publicity 9,620.94 0.00 9,620.94

8. Supervision during constr. implementation 307,870.16 0.00 307,870.16

9. Technical assistance 0.00 0.00 0.00

10. Sub-TOTAL 87,125,331.63 10,421,597.40 76,703,734.24

11. (VAT) 15,520,696.96 0.00 15,520,696.96

12. TOTAL 102,646,028.59 10,421,597.40 92,224,431.19

The original cost estimate of the Beneficiary was prepared in Polish Zloty (PLN). The cost estimate was converted to EUR at the rate of 4.2252 PLN per 1 EUR.

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Total costs and eligible costs are provided and calculated correctly taking into account requirements of Article 61 of Regulation (EU) No 1303/2013.

Planning and design fees (approx. EUR 395 thousand) were correctly excluded from the eligible project cost as they were already co-financed from public resources. Due to the small value of this cost (0.4% of total project cost) its exclusion from the total project cost has marginal impact on the results of financial and economic assessment of the project;

Total land acquisition cost of EUR 19,644,040.52 represents 19.1% of total project cost. Of this only EUR 9,222,443.12 has been presented as being an eligible project cost in order to keep within the limit of 10% of total eligible expenditure for the operation in question defined in Article 69.3(b) of Regulation (EU) No 1303/2013. The relatively high land acquisition costs are in part due to the need for acquisition of some built-up plots of land within urbanised area.

No contingencies are provided for in the project cost estimate. This approach in effect transfers the risk of financing of any unforeseen works and services to the Beneficiary’s municipal budget and remains a key project risk. The sensitivity analysis shows that the project would remain economically efficient (ENPV>0) as long as cost increases do not exceed 92%. Additionally, the City of Rybnik has considerable borrowing capacity to finance any increases in project cost, although this may limit the city’s potential to implement other planned projects.

VAT is non-recoverable and therefore has been correctly deemed to be an eligible project cost; and

The initial results of the ongoing tender for supervision services (see section 9 for further details) provide higher supervision costs than in the estimate. The offers range between EUR 0.64 - 1.88 million incl. VAT (also including a separate task related to 0.86km of the local connecting road financed from own city funds out of this project) which in any case means a higher cost of supervision related to the project than the anticipated EUR 0.3 million incl. VAT. Cost of supervision from the received bids is in range of 0.6-1.8% of total project cost, which is a standard cost of such service and is justified in this case.

The overall cost estimate, except the likely higher cost of supervision by ca. EUR 0.4 million, is sufficient to achieve the expected objectives of the project. The rationale for calculation of the total costs is sufficiently detailed in the feasibility study. At the stage before finalising the tender of the work contract the cost estimate is reasonable compared to the observed costs of similar roads in Poland.

Unit values for construction costs remain in the usually observed range for similar (2x2-lane) road projects in Poland (between EUR 6.4 and 15.2 million per km incl. VAT) and are sufficiently explained by the fact that the road runs through a quite densely populated area.

No

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4.2 Provide information on compliance with State aid rules and how State aid rules have been taken into account in

the calculation of the total public contribution to the project.

4.2.1 Please inform whether the independent experts, in accordance with Article 23(1) of Commission Delegated Regulation (EU) No 480/2014 or the Member State, have consulted the Commission on relevant State aid issues.

If the Commission has been consulted, please provide the date and reference of consultation and the date and reference of the reply and summarize the result of the consultation.

The independent experts did not consult the Commission on State aid issues with regards to this project.

4.2.2 If the Commission has not been consulted, please provide the following information:

Do you consider that this project involves the granting of State aid?

Yes ☐ No ☒

If yes, please explain on what basis compliance with State aid rules is ensured. Please provide this information for all groups of potential State aid recipients, for example, in case of infrastructures, for the owner, the constructors, the operator and for the users of the infrastructure.

Not applicable

If no, please explain in detail why you consider that the support does not constitute State aid. Please provide this information for all groups of potential State aid recipients (for example, in case of infrastructures potential aid recipients are: the owner of the infrastructure, the constructor, the operator and the users of the

infrastructure) (1). If applicable, please indicate whether the reason why you consider that the project does not involve State aid is that (i) the project does not concern any economic activity (including activities in the public remit) or that (ii) the recipient(s) of support enjoy a legal monopoly for the relevant activities and are not active in any other liberalised sector (or will keep separate accounts in case the recipient(s) are active in additional sectors).

The public support to the project

The project involves financing the construction of road infrastructure with use of public resources in form of a grant from the European Regional Development Fund provided to the City of Rybnik (acting as an investor also on behalf of the City of Żory) under the ROP of Silesia 2014-2020.

The beneficiaries of funds are the City of Rybnik and the City of Żory, both local government bodies. According to the law, such local governments are responsible for the investment and maintenance of all roads on its land, with the exception of motorways and express roads. The City of Rybnik and the City of Żory are therefore exclusive owners and managers (operators) of the regional road on their territories. The cost of operations and maintenance of the regional road will be financed entirely from the cities’ respective budgetary resources.

The existence of state aid

The project concerns the provision of regional road infrastructure, which by Polish law is made available free of charge to all users (non-tolled public road), and therefore will not be commercially exploited.

At the level of the owner and operator (both roles played by the City of Rybnik and City of Żory that are public administration bodies) the construction, operation and maintenance is one of their basic tasks granted by the legislator to the public authority on the appropriate level. The state aid can be excluded as there will be no transfer of public resources to an undertaking and this task is not regarded an economic activity.

At the level of contractors, there will be no distortion of the competition as all contractors of the studies, documentation, and the works were or will be selected in public tenders in accordance with Polish public procurement law.

At the level of infrastructure users, there will be no distortion of competition as the road infrastructure build in this project will be available free of charge and on an equal and non-discriminatory basis to

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all users.

On the basis of the above, the project does not involve State Aid at the level of any of the stakeholders.





The process of identifying and addressing the state aid in the project was correctly carried out by the Beneficiary.

The beneficiary provided sufficient evidence that public support to the project does not constitute State aid. The Beneficiaries (City of Rybnik and City of Żory) is a public body which holds public authority for the construction and management of regional roads available to all potential users.

The State Aid has been correctly taken into account in the calculation of the total public contribution to the project. State Aid considerations did not affect the calculations of the public contribution to the project (Article 61.8 of the CPR does not apply).

No

(1) The Commission services provided guidance to Member States to facilitate the assessment when infrastructure investments may involve State aid. In particular, the Commission services have prepared analytical grids. A Communication on the notion of aid is currently in preparation The Commission invites Member States to make use of the analytical grids and of the future communication for explaining why it is considered that the support does not involve the granting of State Aid.

5. FEASIBILITY STUDIES CARRIED OUT, INCLUDING OPTION ANALYSIS, AND THE RESULTS

5.1 Summarise relevant information on the feasibility studies carried out and the results under the following aspects: institutional, technical, environmental including climate change (if relevant) and other aspects.

The Feasibility Study for “The construction of the Regional Road Racibórz-Pszczyna on the section running through the City of Rybnik – stage I” was carried out by an external consultant (dated September 2016).

Institutional aspects

Under Polish law, the cities with powiat (county) rights are responsible for the provision and maintenance of regional roads on their territories. In this case the City of Rybnik is the only relevant public authority entitled to implement the project and to become an owner and an operator of the new road infrastructure. The same applies to the road section on the City of Żory territory (425 m long). There is no other practical institutional alternative to implement the project.

Both cities established special partnership in order to prepare and implement the project jointly. The City of Żory delegated specific necessary powers to the City of Rybnik in line with the national law for the purpose of project preparation and implementation. In the operational phase the cities will maintain road sections on their territories separately.

Both cities have dedicated specialist departments in charge of overseeing the road networks, however for the purpose of this project implementation the supervision will be contracted

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externally. The construction works will be delivered by an external contractor selected in a competitive tender in line with Polish public procurement law.

Technical aspects

The feasibility study considered numerous technical aspects of the project, including its basic technical and functional parameters also considered in the options analysis.

The process of designing of the roads in Poland considers obligatory standards, regulations and guidelines as well as technical specificities of the location of the investments (conditions of water-soil) and the possibility of occurrence of natural disasters characteristic for particular area of Poland. The investment shall be implemented in an area strongly transformed by human activity e.g. extractive industries. For this reason, when designing the road, it was necessary in this case to apply additional protection against the so-called mining damage and to provide grade separated crossings with dense roads network of lower category and railway lines. The selected alignment of the road was avoids dense aggregations of residential buildings and allows safe and quick access to the axis of A1 motorway - national road DK78. The project is not in an area prone to natural disasters.

The constructed road will form a part of an important regional road corridor (from Racibórz to Pszczyna) and the future role of this road in the road network system of Silesia has been considered. The road will be connected to the existing road network without duplication of infrastructure.

In order to adjust the road to the expected demand the road is planned to be built as a dual carriageway road with two lanes in each direction (2x2 with a separating strip) in line with the class GP road. Detailed technical parameters are presented in Section B.3 of the Part A of the notification form. Junction design was considered as part of options analysis and considered different solutions that were finally decided upon the basis of traffic fluidity considerations.

For the design and implementation purposes, the road was divided into the following sections:

Task (section) I - a road section in the City of Żory (from Raciborskie Roundabout to the border of the Cities of Żory and Rybnik);

Task (section) II - a road section from the border of the Cities of Żory and Rybnik to Gotartowicki junction in Rybnik, including the Gotartowicki junction;

Task (section) III - a section from Gotartowicki junction to Chwałowicki junction, including the Chwałowicki junction;

Task (section) IV - a section from Chwałowicki junction to Wodzisławski junction, including Wodzisławski junction;

Task (section) V - a section from Wodzisławski junction to the intersection with Sport Street, including the intersection. This section shall probably be redesigned to reduce the road in Rybnik and earlier inclusion to Raciborska Street, i.e. an exit section DW 935 in Rybnik towards Racibórz.

Tasks (sections) I-IV under the name "Construction of the Regional Road Racibórz-Pszczyna on a section running through the City of Rybnik - stage I" (major part of the bypass of the city of Rybnik) is the investment, which is the subject of this application and was selected by the Managing Authority for ROP of Silesia 2014-2020 in a competitive process. For this stage, an economic and financial analysis was executed, and investment expenditures were estimated (in the following sections of this document).

Task (section) V under the name “Construction of the Regional Road Racibórz-Pszczyna on a section running through the City of Rybnik – stage II” is planned also to apply for funds for under the measure 6.1 ROP of Silesia 2014-2020 (project is also considered on the list of projects in the “Plan of expansion of the voivodeship roads in the Silesian Voivodeship”).

Routine and winter maintenance will be carried out on an annual basis as appropriate for the road

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class. An important periodic rehabilitation is scheduled for 2031 (11th year of operations) and 2041 (21st year of operations).

Environmental, climate change mitigation and adaptation aspects

For the EIA aspects of the project see Section 7.1. For the climate change mitigation, GHG emissions and adaptation aspects please see Section 7.2.





The institutional setup for both the implementation and operational stages of the project, with the Beneficiary (City of Rybnik) and its partner in the project implementation (City of Żory) both operating the infrastructure on their territories, and being appropriate institutions to implement the project, follows a standard approach and is adequate and sufficient.

Furthermore, City of Rybnik has successfully managed a large number of road projects and has adequate capacity to ensure project implementation and ongoing sustainability of project benefits.

The facilities are designed using common international practice and adequate technology and reflect a solid engineering approach. The applied design criteria and engineering approach are therefore adequate to meet the project objectives. The investment does not create unnecessary excess capacity of the road network.

The environmental and climate change aspects of this project are discussed in Section 7 of this report.

No

5.2 Summarise relevant information on the demand analysis (or business plan in case of productive investment).

The demand analysis was based on modelling undertaken by the project consultants in 2015, using industry-standard and recognised traffic modelling software, PTV Visum. A total of 119 (internal and external) zones were used in the transport model, covering Rybnik municipality and adjacent areas.

The demand model used is a typical four-stage transport model (with a 2015 base year), covering: trip attraction and generation; trip distribution; mode switch, and assignment. Traffic patterns data was sourced from available sources of information, including: available demographic data (e.g., population, employment, schools), traffic counts and origin-destination surveys. The demand modelling included separate consideration of: car travel; truck transport; public transport (buses, microbuses, and rail); and pedestrian transport. Demand was segmented according to trip purpose (e.g., commuting, school trips, non-home based trips).

The supply network—the representation of the physical transport network in the model—was built taking advantage of available spatial datasets covering e.g., the road network (which included data on number of lanes and lane width, junction details), administrative boundaries, and the location of public transport stops. The public transport network in the transport model coded all public transport stops (bus stops, bus stations and train stations). The road network used in the

15

model included national roads, voivodeship roads and most of the county roads in the area, with each road link coded to include technical road type, speed limit (for cars, buses, and minibuses), capacity, and allowable vehicle types.

The model was calibrated to ensure it adequately reflected the local situation, with changes to e.g., capacity and speeds on road links and speeds on rail network made to improve model’s accuracy. After calibration the model provided a ‘good fit’, with coefficient of determination of 0.85. The model assigned demand to modes of transport and paths according to travel time, using a standard mathematical logit function. Traffic forecasts were produced for six different years (2016, 2021, 2026, 2031, 2036, and 2041).

The demand analysis was undertaken on the basis of the completion of the link between DK78 and A1 only (sections I-IV). Section V linking DW935 to DK78 west of Rybnik was not included in the demand and economic analysis, as it does not form part of the project.

The table below shows forecasted development in AADT over the period 2021-2041 for the with project scenario. The modelling predicts an initial traffic volume of 11,400-24,230 vehicles, rising over time to 13,660-27,050 vehicles. Traffic forecasts imply a modest growth rate of less than 1% per year over the reference period.

Table: Traffic projections (AADT) on road DW935 in Rybnik in ‘with project’ scenario, 2021-2041.

Year 2021 2031 2041

Scenario

Żory roundabout–city border 24,230 26,680 27,050

City border–Gotartowicki interchange 21,420 23,850 24,110

Gotartowicki interchange– Chwałowicki interchange 19,820 22,230 22,470

Chwałowicki interchange–Śródmiejski interchange 20,000 22,440 22,740

Śródmiejski interchange– Wodzisławski interchange 11,400 13,380 13,660

Source: project feasibility study




Yes X The project demand analysis meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014.

Demand modelling. The traffic modelling assessed the impact that completion of the Rybnik bypass would have on traffic flows and speeds on the main road network around Rybnik, using outputs from a 4-stage transport model. Model build, calibration and validation were undertaken in line with standard industry practice.

Traffic forecasts are considered appropriate and are based on a conservative growth rate of less than 1% per year over the reference period. The demographic assumptions underlying the demand modelling are based on projections from the national statistical office.

Dimensioning of facilities. The proposed capacity is appropriate to the projected demand, with 4-lanes considered reasonable given the projected traffic volume (which is expected to reach up to 27,000 vehicles per day within the reference period). The further extension of the DW935 to the west of the proposed project (planned to be completed before 2020) will add additional traffic and further strengthen the case for 4-lanes.

No

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5.3 Summarise relevant information on the option analysis and selection of the best option.

An option analysis has been undertaken for the project.

A strategic option analysis was carried out in which two routes were studied (Options W1 in red and W2 in green, see map below); the option analysis covered a longer stretch of road than the current project’s scope, the current project ends at the DK78 that runs South-Southwest from Rybnik (see also the map in Section 2 for the scope of the current project compared with the scope of the option analysis that was used in the current project.).

Option W1 mostly follows the original alignment that had been defined in the zoning plan, whereas W2 would avoid built-up areas and forests more, and be bundled with railways lines no. 140 and 957 to reduce impact on the surrounding areas.

Both options have an identical alignment on the section roughly from the Chwałowicki interchange until the viaduct over Ziemska street, as this alignment minimised the risk of mining subsidence caused by two adjacent active mine exploration areas (shown on the map as purple dashed lines above and below the road).

The options were compared using multi-criteria analysis (considering socio-economic, environmental, geological and technical criteria), that showed Option W1 as the most favourable option mainly because it is less exposed to geological risks and uses less land than option W2 and that land had already been reserved for transport infrastructure in the zoning plan.

Subsequently a technological option analysis was carried out for the five exits, where for each of them 3-4 exit layouts were analysed. The selected options were assessed to be the best of the analysed options, as they had the best overall score on the criteria of land occupancy, simplicity of solutions and subsequent minimisation of engineering structure required, traffic flow and (in the case of the Świerklański exit) a lower risk of mining subsidence.

All selected options have adequate capacity for the expected demand.

The climate risks of the different options were not specified; as most option analysis had been carried out in an early stage of project preparation, climate risk was not considered in the strategic option selection.

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Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014.

Strategic options have been compared for the Regional Road Racibórz – Pszczyna on the section running through the City of Rybnik.

Both options were compared using multi-criteria analysis (considering socio-economic, environmental, geological and technical criteria), that showed Option W1 as the most favourable.

Subsequently a technological option analysis was carried out for the five exit layouts, selecting the optimal layout for each of them.

The project option analysis process started before 2014 and therefore climate change issues were not considered throughout all stages of its option analysis. Rather, the climate change adaptation vulnerability and risk assessment was carried out at the major projects application stage, which is adequate in this context.

Overall it can be confirmed that the quality of the option analysis is adequate, the main alternatives have been analysed, and the analysis sufficiently justifies the technical solution to be implemented. The selected type of road best meets the project traffic demand.

No

6. A COST-BENEFIT ANALYSIS, INCLUDING A FINANCIAL AND AN ECONOMIC ANALYSIS, AND A RISK ASSESSMENT

6.1 Summarise relevant information on the financial analysis, including the main indicators of the financial analysis i.e. FRR and FNPV, calculation of net revenue and its result, tariff strategy and affordability (if applicable), and financial viability (sustainability).

Approach to the financial analysis

The financial analysis of the project (effectiveness, net revenue generation and sustainability) was done for the investment as defined for this application (from Racibórz roundabout in the city of Żory to Wodisławska Street in Rybnik, 10.221 km long). No other section of the regional road DW 935 was included in the financial analysis.

Main elements of the financial analysis

The financial analysis was carried out from the point of view of the project owner and operator, City of Rybnik.

The incremental method comparing the “without project” scenario and the “with project” scenario was used, but effectively the non-investment scenario for the financial analysis is a ‘zero scenario’, because the road is a new development (no pre-existing infrastructure).

The financial analysis is undertaken in constant prices (2014) over 25-year reference period of 2017-2041 including 4 years of implementation and 21 years of operations.

Macroeconomic parameters used are based on official national data.

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For the purpose of the financial analysis, the total investment cost of EUR 102.6 million was not reduced by VAT, which is non-recoverable for the Beneficiary.

Costs for rehabilitating or replacing the proposed road infrastructure (periodic maintenance costs) are included in year 2031 (EUR 3.3 million, incl. VAT) and year 2041 (EUR 3.3 million, incl. VAT).

Operating costs represent the incremental cost of operations and maintenance of the new road infrastructure, amounting in total to EUR 357.1 thousand per year, incl. VAT.

The project will not generate revenues. There will be no tolls and no other revenues received by the City of Rybnik from the newly built section of the road.

The residual value of the road infrastructure on the basis of the net present value of cash flows is negative (cash outflows only), so the residual value for the purpose of financial analysis was assumed as zero.

As the loan will be one of the sources of financing project costs, calculation of FNPV/K considers interest payments on the loan.

Tariff strategy and affordability

The project will not generate revenues as the new section of the road will be not tolled and no other incremental revenues will be generated with use of project assets.

Assessment of the financial profitability (main indicators of the financial analysis)

Without Union support With Union support

A B

1 Financial rate of return

(%) Non-

computable FRR/C

Non-computable

FRR/K

2 Net present value (Euro) -108,648,743.69 FNPV/C - 43,279,118,26 FNPV/K

Calculation of net revenue (determination of the contribution from the Funds)

Main elements and parameters Value

1 Reference period (years) 25

2 Financial discount rate (%) 4.0%

Main elements and parameters Value Not discounted

Value Discounted (Net Present Value)

3 Total investment cost excluding contingencies

102,646,028.59 98,087,733.08

4 Residual value 0.00 0.00

5 Revenues

0.00

6 Operating and replacement costs

7,620,045.46

Pro-rata application of discounted net revenue:

7 Net revenue=revenues – operating and replacement costs + residual value = (5)–(6)+(4)

Not applicable Not applicable

8 Total investment cost – net revenue = (3)–(7)

Not applicable Not applicable

9 Pro-rata application of discounted net revenue (%) =(8)/(3)

100.00%

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Financial viability (sustainability)

Financial sustainability analysis is undertaken from the point of view of the City of Rybnik.

The financial cash flows considered undiscounted values of investment cost, operating and replacement costs, non-recoverable VAT, and all national and EU financial resources, as well as loan financing and debt service related cash-flows.

The project cash outflows in the operational phase cannot be balanced by project revenues, so the provision of financial resources to finance maintenance (EUR 357.1 thousand per year, incl. VAT) and replacement costs (EUR 3.3 million, incl. VAT in year 2031 and 2041) will rely entirely on the City of Rybnik budgetary resources.

Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and follows the cost-benefit analysis methodology as described in Annex III to Commission Implementing Regulation (EU) No […]/2014 (1) and related guidance, and the method for calculation of net revenue as referred to in Article 61 of Regulation (EU) No 1303/2013 and in Articles 15 to 19 of Commission Delegated Regulation (EU) No 480/2014, and justify this statement.



Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014 and follows the cost-benefit analysis methodology as described in Annex III to Commission Implementing Regulation (CRI) No. 207/2015 and related guidance, and follows the method for calculation of net revenue referred to in Article 61 of Regulation (EU) No. 1303/2013 and in Articles 15 to 19 of the CDR (EU) No. 480/2014.

The financial analysis is carried out in line with the legal requirements and follows the methodology referred to in Article 101 of Regulation (EU) No 1303/2013 and in Annex III to Commission Implementing Regulation (EU) No 207/2015 and related guidance. The project discounted net revenue was correctly established, based on the method for calculation of net revenue as referred to in Article 61.3(b) of Regulation 1303/2013 and in Articles 15 to 19 of Commission Delegated Regulation (EU) No 480/2014. In particular:

The financial analysis is carried out correctly from the point of view of the City of Rybnik (project owner and operator), in constant prices with application of the incremental method based on comparison of scenario with investment to the scenario without investment;

The reference period of 25 years and the financial discount rate of 4% are correctly selected and applied;

Value added tax has been correctly recognized in the analysis;

Investment cost, operational cost and replacement cost of the project are correctly identified and determined on the basis of plausible assumptions; No revenues will be generated by the project;

Residual value of the investment does not have to be calculated as the net present value of cash flows, because the project is not a net revenue generating project; Other methods of residual value calculation would be justified in this case, however their application would have no impact on the calculated amount of ERDF grant;

The project does not generate revenues, so the residual value was

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not included in the calculation of discounted net revenue, FNPV and FIRR;

The financial net present value of the investment without the contribution of the Funds (FNPV/C) is correctly calculated and is negative which justifies the project’s co-financing;

The financial net present value of the national capital (FNPV/K) net of EU support was correctly calculated and is negative;

FIRR/C and FIRR/K are non-computable as the project does not generate revenues; and

Calculation of the pro-rata application of the discounted net revenue is correctly done and the pro-rata net revenue rate of 100.00% is correctly calculated.

The financial sustainability analysis identified appropriate financial cash flows and shows that the project will require the provision of financial resources by the City of Rybnik to cover expenditures for investment and operations throughout the entire reference period. The City of Rybnik will entirely finance the operational, maintenance and replacement costs of the project in the operational phase. The financial standing of the City of Rybnik indicates that the required funds will be provided to the project. On this basis, the project is financially sustainable and cumulated (undiscounted) net cash flows are positive (or zero) on an annual basis over the entire reference period.

No

6.2 Summarise relevant information on the economic analysis, including the main indicators of the economic analysis i.e. ERR and ENPV and main economic benefits and costs.

The economic analysis was based on analysis of incremental costs and benefits arising from the completion of the Rybnik bypass project, and used:

(i) A 4.5% social discount rate;

(ii) A 25 year reference period, of which 4 years is the construction period and 21 years the operational period; and

(iii) Constant 2014 prices.

Investment costs were converted from financial to economic prices by excluding VAT and applying a project-specific conversion factor of 0.83, calculated in line with national guidance. A conversion factor of 0.78 was estimated for, and applied to O&M expenditure.

Unit values of time are based on values in the national CBA guide—the ‘Blue Book’—in Poland and in 2014 prices amount to EUR 15.7, EUR 7.7 and EUR 6.5 per hour of business, commuting and leisure time, respectively. Values of time increase in line with GDP per capita at elasticities of 0.5. Average car occupancy for urban trips is estimated at 1.2 for commuting and business trips and 1.6 for leisure trips.

Unit values for vehicle operating cost savings are in line with national guidelines, with the different values provided for each permutation of vehicle type (i.e., light vehicles or heavy goods vehicles) and speed range (0-140 km/h in 10 km/h bands).

Accident savings are calculated based on application of an average urban accident rates to the change in vehicle kilometres of travel between the without and with project scenarios. Unit values of fatalities, serious injuries and minor injuries saved are based on national guidelines. Values of accidents increases over time in line with growth in GDP with an elasticity of 0.8.

The CBA compared the cost of constructing and maintaining the project over the reference period against the benefits to be derived from the project in terms of: time savings, vehicle operating cost savings, reductions in emissions, reductions in accidents and residual value. The

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residual value has been calculated using the discounted cash flow method, with the residual value set at the discounted flow of the net benefits arising in a 15-year period after the reference period.

Table: Summary of CBA results

Value % of total

Present Value of Costs EUR 80.7 million 100.0%

Investment Costs EUR 68.8 million 85.3%

Operation and Maintenance Costs EUR 7.7 million 9.6%

Accidents EUR 0.1 million 0.1%

Vehicle Operating Costs EUR 2.3 million 2.8%

Noise EUR 1.8 million 2.2%

Present Value of Benefits EUR 143.9 million 100.0%

Time Savings EUR 110.4 million 76.8%

Emissions EUR 2.6 million 1.8%

Climate EUR 1.1 million 0.8%

Residual Value EUR 29.7 million 20.6%

Economic Net Present Value EUR 63.2 million

Benefit to Cost Ratio 1.78:1

Economic Rate of Return 9.2%

The largest part of scheme benefits result from time savings (76.8%), in turn followed by emissions (1.8%), and climate change impacts (0.8%); residual value accounts for 20.6% of total benefits. The CBA model calculates that the impact of the project on accidents, vehicle operating costs and noise will be negative.

The project’s Economic Rate of Return is 9.2%, the Benefit to Cost Ratio is 1.78:1 and the Net Present Value is EUR 63.2 million.

Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and follows the cost-benefit analysis methodology as described in Annex III to Commission Implementing Regulation (EU) No 207/2015 (1) and related guidance, and justify this statement.



Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014 and follows the cost-benefit analysis methodology as described in Annex III to CIR No. 207/2015 and related guidance.

The following arguments justify this conclusion:

The ‘with the project’ and ‘without project’ scenarios are adequately developed and the analysis is correctly carried out on incremental basis;

The reference period and the social discount rate are correctly selected;

Investment and O&M costs are correctly converted from financial to economic costs (by excluding VAT and by application of suitably

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calculated conversion factors);

Unit values for time savings, vehicle operating costs, emissions, and climate change are in line with national guidance document and are considered appropriate;

The approach used in calculation of accidents and noise follows national guidelines and associated parameter values but is considered conservative. Both accidents and noise are presented in CBA as costs, whereas given the nature of the project both could be expected to have favourable impacts (with traffic being diverted away from highly populated areas noise impacts may actually improve, and accident savings may be expected given that traffic is being diverted to a higher quality road with separated carriageways and limited accesses). This leads to the conclusion that the project economic indicators may slightly understate the economic impact of the project;

The residual value is based on the discounted cash flow method and calculates the net benefit of the project in the 15-years after the project reference period; and

The project economic indicators—i.e., economic rate of return (ERR), benefit to cost ratio (BCR) and net present value (NPV)—are correctly calculated and collectively demonstrate that the project is economically viable.

The planned further extension of the DW935 to the west of the proposed project (to be completed before 2020) will add additional traffic and further strengthen the economic case for the Rybnik bypass.

The project is economically viable – as described above – justifying support from EU funds.

No

6.3 Summarise relevant information on the risk assessment including main risks identified and mitigation measures.

Sensitivity analysis

As the project does not generate revenues, the sensitivity analysis focused on economic indicators.

A sensitivity analysis of the economic viability resulted in three critical variables for economic viability with the following switching values:

Variable

ENPV Variation

(% change per % point of base variable)

Switching Value (%)

Investment costs 1.1 +92%

Traffic volume 2.2 -45%

Value of Time 2.2 -45%

The financial sensitivity analysis considered the investment cost which would have to be negative (-111% change) in order for the FNPV/C to be positive (and -126% change for FNPV/K to be positive).

Scenario analysis

Various scenarios were tested, the most pessimistic scenario (combining parameter changes of traffic -15%, investment cost +20%) would still result in an ERR of over 4.5%, and thus above the threshold.

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Risk analysis

A qualitative risk analysis has been undertaken. The qualitative analysis initially identified 30 risk categories that are typical for transport projects, from which closed risks were eliminated from the analysis, leaving 21 open/active risks. The main identified open risks were traffic demand, land acquisition cost, delays, contractor bankruptcy, cost overruns, availability of national resources, climate change risks and mining subsidence. Mitigating measures have been defined for all risks.

The climate change risk analysis was qualitative, and considered the vulnerability of the project to extreme temperature changes and excessive rainfall. Most risks (flooding, heat, cold) had already been adequately considered in the road design standards, and additionally the following adaptation measures were defined for fog: speed limit, additional signposting and safety barriers

Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and follows the cost-benefit analysis methodology as described in Annex III to Commission Implementing Regulation (EU) No 207/2015 (1) and related guidance, and justify this statement.



Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014 and follows the cost-benefit analysis methodology as described in Annex III to CIR No. 207/2015 and related guidance.

The risk assessment, including the sensitivity analysis and the risk analysis, follows the methodology for carrying out the cost-benefit analysis as described in Annex III to Commission Implementing Regulation (EU) No 207/2015 and related guidance.

The relevant major risks for the road sector recommended to be assessed in the abovementioned Annex III have been analysed.

The testing for the sensitivity analysis considered a 1% variation and switching values are correctly calculated.

The risk assessment is complemented by relevant mitigation measures. The measures are logical and adequate for this type of project.

No

7. AN ANALYSIS OF THE ENVIRONMENTAL IMPACT, TAKING INTO ACCOUNT CLIMATE CHANGE ADAPTATION AND MITIGATION NEEDS, AND DISASTER RESILIENCE.

7.1 Summarise relevant information on the analysis of the environmental impact.

Contribution to environmental policies

The project stems from the ROP of Silesia 2014-2020 and, in accordance to it, is part of the implementation of the objective set out in the guidance document for Cohesion Policy - The Europe 2020 strategy of sustainable development. Poland adopted the Europe 2020 Strategy which committed the country to the objectives set at EU level, including targets regarding energy and climate (e.g. the purpose of 20/20/20) and sustainable transport objectives, i.e. the creation of intelligent, modernized and interconnected transport infrastructure.

The project fits within the framework of sustainable transport, which means meeting the economic, social and environmental needs, while minimizing the impact on the environment. Though the project belongs to the transport and not environmental sector, the environmental

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assessment procedures carried out at the levels of policy making down to project preparation ensured that it meets environmental requirements to ensure that they do not contradict the environmental policies. The above ensured the contribution to environmental policies’ requirements.

Polluter pays and preventive action principles

The project is included in the list of major projects under the ROP of Silesia 2014-2020 as well as forms a part of the Development Strategy for the Silesian Region Transport System. The said documents underwent SEA, including public consultation and information procedures. .

During the project preparation process EIA was carried out at the stage of issuing the environmental decision and before the issuing of construction permits. In the decisions issued by the competent authorities, actions to minimize the potential negative impact on the environment were described and mitigation measures assigned.

Environmental procedures carried out resulted in a number of preventive actions, the most important being installation of noise barriers, animal crossings, such as tunnels for amphibians and small animals, viaducts over railway crossings and bridges over small streams (14 objects in total) providing comprehensive safety systems for animal migration routes, the introduction of environmental supervision over the project during its development phase and restoration of the environment around the project after its completion. It was established that no appropriate assessment is needed as per Habitats Directive (Art. 6.3) and no protected habitats will be destroyed by the project, which is correct assessment. A compensation measure planned because of the partial filling in of a pond in a form of a new pond in the vicinity is related to the national law for nature projection and is not in the scope of Habitats directive, which has been evidenced by the EIA decision making.

To sum up the above, timely and correct environmental procedures namely SEA and EIA carried out at the planning and project preparation phases and environmental measures assigned evidence that the prevention principle has been applied correctly.

The road will not be tolled. Polluter pays principle will be applied to road users in a form of excise duty included in the fuel costs, which is appropriate. The fixed amount tax imbedded in the price of a litre of fuel enables to tax a greater extent higher fuel consumption vehicle users. Information on the application of polluter pays principle for the project is question is appropriately presented in the project documentation.

Compliance with Directive 2011/92/EU (EIA)

The project was correctly classed as belonging to Annex I, point 7.c of the EIA Directive. In the national Polish regulations (Council of Minister’s Regulation of 9 November 2010, modified), the project was identified as §2.1, Point 32.

The EIA procedure from the main environmental decision to construction permits, the appeal procedure, EIA reports with addenda, decisions and public announcements regarding the decisions have been provided for review. The named set of documents has been reviewed in order to establish the compliance and is considered complete and correct.

The project underwent EIA procedures at the stage of the environmental decision and the construction permit. In the course of the procedures the statutory consultees were duly consulted and the public was provided with an opportunity to review the documents and to express opinions. Provided correct documents such as the NTSs, environmental decision and EIA stage II decisions demonstrate correct application of the requirements of the Article 5 and Annex IV of the EIA directive.

The Beneficiary submitted the application for environmental decision on 10 August 2012. In the course of the procedure additional explanations were submitted at the request of RDOS, and the proceedings were suspended between November 2012 and February 2013 to allow for modifications resulting from new regulations concerning ambient noise levels. The environmental decision was issued by Regional Directorate for Environmental Protection (RDOS) in Katowice

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17 October 2014 therefore the Article 6 of the EIA Directive is considered fulfilled. The decision was made public, in accordance with legal requirements, as it is evidenced by the supporting documentation provided. The environmental decision contains environmental conditions (measures) to be included in the project, conditions to be met during construction and requirement of a second stage EIA during the procedure leading to the issuing of the construction permit as well as post project monitoring concerning functioning of animal passes and water run-off system.

As a result of an appeal against the environmental decision by an NGO, the appeal body, i.e. the General Directorate for Environmental Protection (GDOS), modified the environmental decision of 17 October 2014, in particular providing more precise description of mitigation measures to be applied. The GDOS decision issued on 18 August 2015 corrected the environmental measures of the RDOS decision (2014) and is considered the key decision in this procedure, which is correct. The decision was made available to the public according to the legal national requirements and was appealable for 30 days since the issue. JASPERS has no knowledge of any other appeal relevant to the project in question.

The second stage EIA (at the stage of issuing construction permits) was carried out administratively in 4 procedures, corresponding to 4 sections into which the project was divided at the construction permit stage. The procedures concerning second stage EIA were initiated in June and July 2015 and the RDOS opinions were issued on 23 March 2016 for sections 1 and 2 and on 19 April 2016 for stages 3 and 4 (Article 6), following consultations with statutory consultees and opportunity for the public to express opinions in each of the proceedings. In the course of the procedures additional information was submitted, concerning i.a. noise propagation. The justification of the decisions provides a full overview of the procedures, including materials analysed and consultations carried out, the impacts addressed and conclusions reached, including justification of modification of some mitigation measures as compared to the environmental decision (e.g. concerning types of plants to be used at approach to animal passes). It is to be noted that while for administrative reasons there were 4 procedures, concerning the 4 sections the impacts were analysed jointly in a single EIA report (Article 5 and Annex IV of the EIA Directive) and the justification of the RDOS opinions clearly demonstrates that the procedures in fact took into account the impact of all 4 sections jointly.

Article 7 was not found applicable to this project.

All construction permits have been issued to-date as follow: 20 June 2016, 28 June 2016, 07 July 2016 and 05 August 2016. When issuing the construction permits, the Silesian Voivodeship Governor in Katowice, took into account environmental consultations with relevant authorities, i.e. RDOS in Katowice, GDOS in Warsaw and Voivodeship Sanitary Inspectorate in Katowice. The correct link to the public announcements of permits for developments which underwent EIA was provided for review though it is also a legal requirement in Poland (the electronic bulletin), which enabled verification of the compliance with Article 9 of the EIA directive.

Compliance with Directive 2001/42/EC (SEA)

The project is included in the Strategy for the Development of Transport in Silesian Voivodeship (as well as in the ROP of Silesia 2014-2020) which was covered by an SEA. The text of the SEA (including non-technical summary) is provided through a link in chapter IX of the description of public consultations. The correct link to the description of the procedure leading to the adoption of the Strategy demonstrated the whole procedure of the adoption of the Strategy including public consultations and the SEA procedure, as well as announcements concerning the publication of the Strategy, which provides evidence of compliance with Article 9.1 of the SEA Directive.

The project is also consistent with the ROP of Silesia 2014-2020 and the consistency is demonstrated throughout the project documentation.

Ex ante conditionalities (Link to the agreed action plan, if relevant)

Both the general ex-ante conditionality (EAC) on environmental legislation and the thematic ex-ante conditionality for transport sector are relevant. There was no action plan needed for the

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general EAC 6 (Environmental legislation relating to EIA and SEA) and thematic EAC 7 for transport was fulfilled by the Development Strategy for the Silesian Region Transport System, which also has been subject to SEA in 2013. Therefore, both ex-ante conditionalities were fulfilled.

Compliance with Directive 92/43/EEC (Habitats)

The project as described in the project documentation does not cross any Natura 2000 sites. The nearest sites are located in the distance of 14 to 24 km from the road and are Dolina Górnej Wisły PLB240001, Zbiornik Goczałkowicki - Ujście Wisły i Bajerki PLH240039 and Stawy Wielikąt i Las Tworkowski PLB240003. The project is not likely to have significant negative effects on the mentioned Natura 2000 site

An appropriate Appendix 1 Declaration has been issued by RDOS Katowice on 15 March 2016 with a satisfactory map attached to it. The declaration contains a reasonable justification for the lack of the detailed assessment (as in the Art. 6(3)); therefore it is considered that the compliance with Habitats directive has been demonstrated.

Environmental integration measures and costs of mitigation and/or compensatory measures

The environmental issues considered during the procedures and relevant mitigation measures assigned include:

Impact of construction stage (land-take, noise, air pollution, potential for surface and ground water pollution, impacts on soil, waste management), to be addressed by technical and organisational measures.

Flora and fauna, which were subject to inventory and other research. The investigations covered in detail a 500 m belt on each side of the axis of the proposed alignment for the two alignment alternatives. Although no protected areas (including Natura 2000) are located in the vicinity of the road, the presence of protected species and habitats was investigated, also with view to existing and proposed landscape protection areas. Both alignments cross forest areas. The investigations carried out resulted in proposed mitigation measures such as allowed seasonal timing of the works, areas where construction site cannot be located, adequate water management, road fencing and animal crossings, etc. The measures were a subject to detailed discussion in the course of the procedure, including with a local environmental NGO;

Water and soil: in particular runoff management and minimisation of impacts on crossed water bodies (the Klokocinka, the Potok Boguszowicki, and the Nacyna), as well as impact of partial filling in of one pond (in view of its function as amphibian habitat).

Noise and air pollutions generated by traffic on the road – with proposed noise screens as mitigation measures, and the need for a post-project analysis to verify real noise impacts.

The procedure also addressed cumulative impacts, in particular concerning proximity of and connection to A1 motorway. Other impacts, such as cultural monuments, the need for archaeological research and the need for demolitions were also considered.

The EIA concluded that the measures proposed were sufficient to prevent and mitigate potential negative impacts. Remaining uncertainties as to impacts of noise (which depend on traffic level on the road) were clarified by the post completion analysis.

All measures established by the environmental decision under the EIA procedure and other assessments such us by GDOS and during the stage II EIA procedure before the construction permit have been included into the project budget and priced accordingly, with the most important being the appropriate noise barriers, animal crossings, road fencing, environmental supervision of the project during the construction phase and restoration of the environment after the completion of the project, e.g. landscaping and replanting. The above mentioned environmental mitigation measures and the project costs allocated (2.57%) of the total project costs to remedy and minimize environmental impacts are considered satisfactory.

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Compliance with other sectoral environmental directives (Directive 2000/60/EC compliance, Directive 91/271/EEC, Compliance with Directive 2010/75/EU or Directive 2008/98/EC, if applicable)

The project is located in the Górna Odra watershed within the boundaries of the uniform underground water body PLGW6210140 and the uniform surface water body PLRW60006115651. The Appendix 2 issued by RDOS in Katowice (2016) states that the impacts due to physical modifications concerning the crossing of the Klokocinka, the Potok Boguszowicki and the Nacyna water courses are not significant at uniform water body level and neither are the potential impacts of treated runoff discharge.

The project does not involve any physical modifications of a water body and, according to the Appendix 2; potential impacts of treated runoff discharge will be sufficiently mitigated and will not affect the status of any water body. Appendix 2 confirms that the project does not deteriorate the status of the water body or cause failure to achieve good water status/potential. The declaration is considered containing enough justification and demonstrates the compliance with the Water Framework Directive 2000/60/EC.

Other environmental directives are not relevant to the project.




Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014, as it has been demonstrated by project documentation and as summarized above.

The project is in conformity with the ROP of Silesia 2014-2020 and the Development Strategy for the Silesian Region Transport System. Project does not stem from the EU or national environmental policy but its adherence to it has been sufficiently demonstrated.

The application of Polluter Pays Principle is described in the supporting documents. The Principle of Preventive Actions has been applied and mitigation measures established have been included in the final design of the project.

The project has been classified correctly (Annex I) and an EIA was carried out. The EIA was undertaken (2012-2016). The EIA procedure (the stage of environmental decision and at the stage of issuing construction permits) has been carried out in compliance with Articles 5, 6, 8 and 9 and Annex IV with evidence provided in accompanying documents. The NTS has been prepared, consultations with the public have been documented and taken into account during the procedure and the EIA reports as well as decisions has been made available to the public. Article 7 was found not applicable.

The SEA of the ROP of Silesia 2014-2020 and the Development Strategy for the Silesian Region Transport System have been carried out. The link to the NTS of the SEA of the Development Strategy for Silesian Region Transport System and information relevant to Article 9.1(b) have been provided with the project documentation.

Ex ante conditionalities for Transport (SEA) and environmental legislation (EIA and SEA) have been fulfilled (the latter with an Action Plan focusing on capacity development of governmental stakeholders, but bears no immediate relevance to the project).

A satisfactory Appendix 1 Declaration (2016) has been issued and is provided with the project documentation. The competent authority justifiably

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concluded that Appropriate Assessment was unnecessary for the project (justified).

Information about additional environmental integration measures and environmental monitoring has been provided and is adequate (see above).

The estimation of the costs of measures taken to address negative environmental impacts is adequate.

The project is compliant with the Water Framework Directive 2000/60/EC. A satisfactory Appendix 2 Declaration has been issued by a competent authority responsible for water management and is provided with the project documentation.

No

7.2 Summarise relevant information on the climate change adaptation and mitigation, and disaster resilience.

Project’s contribution to the objectives of climate change policies, in particular targets linked to the Europe 2020 strategy

Information has been provided as regards the national targets of the EU 2020 Strategy and about other relevant climate change policies and objectives, including the Polish National Strategy for Adaptation to Climate Change by 2020 with the perspective by 2030. The relevant EU 2020 Strategy targets are reflected in the Polish context in National Program of Reforms and the Long-term Development Strategy. Information has also been provided about the wider strategic context of the project in terms of meeting the transport related goals of the EU 2020 Strategy and its national equivalents, in particular concerning the project’s contribution to sustainable transport development. In line with the Commission Implementing Regulation (EU) No 215/2014 dated 7 March 2014, the EU climate change expenditure on this project is 0% (intervention field “031 – other national and regional roads (new build)”. It is noted that the project is not a dedicated climate action project, in that its main purpose is neither the reduction of GHG emissions nor the adaptation to climate change., With the above details, CC policy information provided in the project documentation is correct

Climate Change related risks, adaptation and mitigation considerations, and disaster resilience

The Greenhouse Gas Emission calculations have been carried out based on the CBA National Guidance (Blue Book), in line with the Guide to Cost-benefit Analysis of Investment Projects: Economic appraisal tool for Cohesion Policy 2014-2020, and therefore based on the recommended by the EIB Carbon Footprint methodology. This assessment refers to emissions during the project’s operation phase. The calculations have been carried out for “with” and “without” the project (same scenarios as the ones defined for the CBA, and are considered as part of the project economic impacts) to identify the relative project emissions, as well as the calculation of the emissions produced by the project (i.e. project absolute emissions).

GHG emissions were considered during the preparation of the CBA for the project and therefore they played a part in decision making, though at a later stage of the development of the project.

The project average operating year emissions for the considered analysis period are: (i) in relative terms, a decrease of 1.4 ktCO2e and (ii) in absolute terms, 16 ktCO2e. The emissions quantification considers the emission factors of CO2e of the Polish vehicle fleet (data provided in the Blue Book) and, then the quantified emissions are monetised and quantified into the CBA through the application of the shadow price of CO2e (as recommended by EU guidelines).

Measures adopted to ensure resilience to current climate variability within the project

The Polish National Strategy for Adaptation to Climate Change by 2020 with the perspective by 2030 has been prepared with a view to ensure the conditions of stable socio-economic development in the face of risks posed by climate change but also with a view to use the positive impact which adaptation actions may have not only on the state of the Polish environment but also

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on the economic growth. The project is already at a very mature stage of its development, with the majority of project preparation undertaken before the EU requirements for the 2014-2020 funding perspective were issued (see project option analysis section) and before SPA 2020 strategy was prepared.

Climate Change Adaptation Vulnerability and Risk Analysis have been carried out as part of the process of the preparation of the Project Application. The vulnerability assessment was based on national climate change research and the resulting screening of the relevant risks considered project specific exposure.

The expected climate change and trends were taken from KLIMADA, i.e. the national research project on Development of a Strategic Adaptation Plan for Sectors and Areas Vulnerable to Climate Change, which also includes an assessment of the different weather hazards and forecasted climate change impacts on the road sector. It concludes that road transport is vulnerable to climatic changes and incidental climatic events such as strong winds and heavy rains which can cause flooding and landslides endangering road safety conditions. The project location exposure and sensitivity were also assessed on the basis of KLIMADA data that lead to the relevant analysis of the following climate change events and risks.

The result showed high degree of sensitivity of the project to increased precipitation and a moderate vulnerability to increased winds. The project may be moderately sensitive to increase in temperature and to increased frequency of fog. Summing up, the significant risk of increased precipitation and moderate risk of wind, heat waves and fog have been assessed.

It was concluded that the project though being a sensitive structure to flooding and heavy rains in the particular location will not be exposed to the mentioned risks (no or very low vulnerability). Nevertheless, it is stated that bridges were designed considering the maximum flow according to the current design standards ensuring sufficient resilience without the need for further adaptation measure. The chosen drainage systems and the operational measures will ensure the adequate road functioning and no further risk analysis is required.

As regards strong winds (medium sensitivity, low exposure, therefore medium vulnerability), acoustic screens would be the most vulnerable. Nevertheless, it is considered that the applied design standards foresee a wind load that would be resilient enough to upcoming events and no additional adaptation measure is proposed and no further risk analysis is required.

According to the information presented, concerning the extreme temperatures (low sensitivity, medium exposure, therefore medium vulnerability), the proposed road pavement was already designed to improve resistance against high and low temperatures with no additional adaptation measure proposed and no further risk analysis required. During project operation fog (low sensitivity, medium exposure; therefore medium vulnerability) can significantly reduce visibility, and result in traffic delays as well as increase the risk of road accidents. The risk will be mitigated indirectly with speed limits, appropriate road parameters, signs and safety barriers.

It is mentioned that in case of extreme weather events, which may affect critical infrastructure of this project, the National Crisis Management Plan is applied and action is coordinated at regional level to provide response in a timely-manner. This plan is regularly monitored and assessed every 2 years. The analysis concluded that with the design solutions proposed together with the O&M activities planned, the project would be resistant to the key climatic risks identified. A significant residual risk related to climate phenomena that would impact on the proper functioning of the road is not expected.

Sufficient information has been provided to demonstrate that the measures are directly related to relevant significant CC risks, and are suitable and appropriate to reduce the said risks to an acceptable level; therefore the project’s resilience to present climate variability and future CC scenarios is sufficiently demonstrated.

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Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014, as it has been demonstrated by project documentation and as summarized above.

Information regarding the national CC targets of the EU 2020 Strategy and information regarding the national adaptation strategy is provided, though the project does not contribute to it, which is acceptable.

The correct project category according to Implementing Regulation (EU) No 215/2014 is assigned to the project (0%).

The GHG emissions of the project have been calculated with a recognized methodology (for quantities, see above).

Sufficient information is presented on when and how CC was taken into account in the project preparation process. Relevant CC factors, project vulnerability, current and future risk, identification and assessment of measures, and climate forecasts are described (vulnerability and risk assessment elements) in sufficient manner.

The presented climate change vulnerability assessment, the screening of the risks and its conclusions are considered sufficient and adequate though only risk of medium and low significance have been identified, which is acceptable. It has been demonstrated that the solutions included in the project design together with the O&M measures will ensure adequate project resilience to current climate variability and future CC.

No

8. THE FINANCING PLAN SHOWING THE TOTAL PLANNED FINANCING RESOURCES AND THE PLANNED SUPPORT FROM THE FUNDS, THE EIB, AND ALL OTHER SOURCES OF FINANCING, TOGETHER WITH PHYSICAL AND FINANCIAL INDICA TORS FOR MONITORING PROGRESS, TAKING ACCOUNT OF THE IDENTIFIED RISKS

Summarise relevant information on the financial plan together with physical and financial indicators for monitoring progress, taking into account of the identified risks, and on the calculation of the Union contribution including information on the method of calculation.

Sources of financing

The project investment cost will be financed from the EU grant extended from the ROP of Silesia 2014-2020, the City of Rybnik budget resources and the bank loan.

The contribution of Rybnik funds has been secured in the multi-annual financial plan by allocating of PLN 143.7 million (EUR 34 million) specifically to this project, of which EUR 15.5 million will be financed by the loan. The secured amount covers entirely the purchase of the lands, construction works and the cost of external investor's supervision. It should be noted that the project shall be implemented only in the case of granted sufficiently high co-financing from the EU funds.

The Beneficiary signed the bank loan agreement with the European Investment Bank on 7 November 2016. EIB will provide loan in amount of PLN 267 million (EUR 63.2 million) that will be used for financing this project in amount of PLN 65.6 million (EUR 15.5 million) and also other investment projects implemented by the City of Rybnik.

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Funding source (EUR) Eligible Costs

% structure

Non-eligible costs

Total costs

% structure

ERDF grant 68,633,421.69 74.42% 0.00 68,633,421.69 66.86%

EIB loan 15,535,542.93 16.85% 0.00 15,535,542.93 15.14%

Own funds of the City

8,055,466.57 8.73% 10,421,597.40 18,477,063.97 18.00%

Total 92,224,431.19 100.00% 10,421,597.40 102,646,028.59 100.00%

The project will not be implemented as a PPP and will not use a financial instrument.

Calculation of the Union contribution

The Union contribution is calculated based on the discounted net revenue of the operation

Value

Total eligible cost (EUR, not discounted) 92,224,431.19

Pro-rata application of the discounted net revenue (%) 100.00%

Total eligible cost after consideration of Article 61 of Regulation No 1303/2013 (EUR, not discounted)

92,224,431.19

Maximum co-financing rate for the priority axis as in the OP (%) 85.00%

Co-financing rate applied by the managing authority (%) 74.42%(1)

The requested amount of funds (EUR) 68,633,421.69

(1) In the calculation of the EU grant contribution of EUR 68,633,421.69 to this project the co-financing rate of 74.42% has been used by the managing authority. In the ROP of Silesia 2014-2020 approved by the EC the maximum co-financing rate for priority axis VI, measure 6.1 is 85%.

Physical and financial progress indicators

The financial indicator for monitoring progress (according to the annual plan of total eligible expenditure declared in point D.2 of Part A of the notification) is presented below.

Year 2016 2017 2018 2019 2020

Eligible expenditure (in EUR million)

9.2 17.4 25.5 29.5 10.7

Cumulative Eligible expenditure (in EUR million)

9.2 26.6 52.1 81.6 92.2

The project progress indicators are as follows:

Year 2016 2017 2018 2019 2020

Percentage of completion of the project physical output

0 20.94% 30.74% 35.55% 12.77%

Cumulative percentage of completion of the project

physical output 0 20.94% 51.68% 87.23% 100%

Cumulative percentage of financial completion

10.00% 28.86% 56.50% 88.45% 100%

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The total planned financial resources and planned support from the European Regional Development Fund is justified and correctly presented in the financing plan.

The EU contribution is calculated on the basis of the discounted net revenue method that was correctly applied in this case.

The co-financing rate of the relevant priority axis (85%) was not applied in this case. The planned support from the ERDF for the project is calculated for this project with use of 74.42% co-financing rate and this rate will be applied in the grant agreement between the Managing Authority and the Beneficiary. The reason for application of a lower co-financing rate is a limited amount of support from the ROP allocated to this project.

The national contribution is correctly calculated and is sufficient to finance the project costs not financed from the ERDF.

The national private contribution is not foreseen in this case.

The annual financial needs for project implementation are adequately covered by the planned financing sources of the Beneficiary.

The planned financial profile is consistent with the planned physical progress of the investment, assuming financial project implementation (28.9% in 2017) in advance of its physical implementation (20.94% in 2017). The difference suggests that the Beneficiary has to carefully manage the construction works progress due to advance payments for the work done.

The output indicators as presented in section D.3. of Part A of the notification comply with the ROP of Silesia 2014-2020.

Other indicators for monitoring physical progress are presented in Part B as an indicative percentage completion of the construction work contract.

The physical indicators are sufficient for proposed scope of works and are appropriate and verifiable.

No

9. THE TIMETABLE FOR IMPLEMENTING THE MAJOR PROJECT

Summarise relevant information on the timetable for implementing the major project (or its phase in case the implementation is longer the programming period) including public procurement.

Timetable

Construction of the road planned for 2017-2020 should last effectively three years, starting in June 2017, with the operational phase intended to start in June 2020.

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Project maturity

The design studies have been completed in November 2016. The land acquisition process was also completed in 2016.

The project implementation is split into two main contracts, one for construction works and one for the supervision.

The call for tenders for supervision has been published in September 2016 and the bids were received by the City of Rybnik in October 2016.

The call for tenders for the main construction works has been published in October 2016. The expected date of receiving contractors’ offers is mid-December 2016.

Contract Date of signature (expected)

Supervision March 2017

Works and promotion June 2017

The project is planned to be completed and put into operation before the end of the eligibility period; thus, no division of the project into phases is envisaged.

The beneficiary has already obtained all required building permits.





Given the fact that the required building permits and land have been obtained, there is no more risk of delay in the pre-tender stage. The expected construction time of three years is considered sufficient for a project of this type.

The tender for the construction supervision services is ongoing and the beneficiary received several bids that remain within the budget allocated by the City of Rybnik for these services (EUR 1.42 million), so sufficient financial resources are available, and the signature of the supervision contract by March 2017 is therefore feasible.

Assuming that the construction stage will start without major delays, the proposed timetable for the project is considered feasible.

No

CONCLUSIONS OF THE INDEPENDENT QUALITY REVIEW

Based on the information made available by the project beneficiary for this Independent quality review and the analysis of this information on the basis of Article 23 and Annex II to Commission Delegated Regulation (EU) No 480/2014, do the independent experts appraise the major project positively and confirm its feasibility and economic viability?

Please put x where appropriate

X Yes

No

To the attention of Mr Jerzv Solecki Director of the ERDF ... · the Regional Road...

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