PPP in POLAND Investment & Cooperation Possibilities for German Companies Berlin, 12 November 2008 Poland Industrie- und Handelskammer zu Berlin Fasanenstraße 85 | Berlin

D G D DOLNOLĄSKA GRUPA DORADCZA Issues: 1.Introduction 2.Legislative framework Regional initiative 4.Institutional capacity building 5.Opportunities and risk 6.Why German firms? 7.New PPP law – selected items 8.Summary / Q & A speaker: Witold Grzybowski ©Dolnośląska Grupa Doradcza2

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza3 Legislation PL 2008: PPP law of 28 July Decrees PPP law of 2008 Act on Concessions for Construction Works or Services Polish Public Procurement Law (2008 edition ) awareness builder competetive dialogue concession for construction work

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza4 Legislation PL 2008: Civil Code of Poland PPP law of.. Nov 2008 Act on Concessions for Construction Work or Services Act on Communal Economy 1964 / 2008 Act on Toll Motorways Act on Special Purpose Companies for Road Transport Act on Community self government Act on Communal Water Suply & Sewage Collection Act on Freedom of Enterprising Activity

D G D DOLNOLĄSKA GRUPA DORADCZA Useful acts of law: ©Dolnośląska Grupa Doradcza5 Any agreement concerning cooperation between public sector and private sector is a subject of civil law regulatory framework -Ustawa z dnia 29 stycznia 2004 r. prawo zamówień publicznych (Dz.U Nr 19 poz. 177) -Ustawa z dnia 22 września 2006 r. o przejrzystości stosunków finansowych pomiędzy organami publicznymi a przedsiębiorcami publicznymi oraz o przejrzystości finansowej niektórych przedsiębiorców (Dz. U. z dnia 20 października 2006 r.) - Ustawa z dnia 20 grudnia 1966 r. o gospodarce komunalnej (Dz.U. z1997r.Nr 9poz.43) - Ustawa z dnia 27 października 1994 r. o autostradach płatnych (Dz. U z 2001r. Nr 110 poz.1192) - Ustawa z dnia 23 kwietnia 1964 r. kodeks cywilny (Dz.U. z 1964 r. Nr 16, poz. 93) - Ustawa z dnia 30 czerwca 2005 o finansach publicznych (Dz.U. z 2005r. Nr 249, poz. 2104) - Ustawa z dnia 12 stycznia 2007 r. o drogowych spółkach specjalnego przeznaczenia (Dz. U. z dnia 12 lutego 2007 r.) -Ustawa z dnia 2 lipca 2004 r. o swobodzie działalności gospodarczej (Dz.U Nr 173 poz. 1807) - Ustawa z dnia 21 sierpnia 1997 o gospodarce nieruchomościami (Dz U. z 2004r. Nr 261, poz. 2603) - Ustawa z dnia 7 czerwca 2001 r.o zbiorowym zaopatrzeniu w wodę i zbiorowym odprowadzaniu ścieków. (Dz. U. z dnia 13 lipca 2001 r.) - Ustawa z dnia 8 marca 1990 r o samorządzie gminnym (Dz.U Nr 16 poz.95) Original titles and numbers/dates of issue of the key Polish legislative acts of law useful for PPP implementation.

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza6 Regional PPP initiatives 2008 The Polish Government funded 300 thousand worth technical assistance to regional ppp projects in regional PPP projects submitted and evaluated in a national competition : 15 Sport and leisure; 12 Communal infrastructure; 4 Communal utilities ; 7 Small projects; 5 motorway concession procurements by GDDKiA - pending Act of 27 October 1994 on Toll Motorways Act of 12 Jan 2007 on Special Purpose Companies for Road Transport

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza7 Opportunities & risk 1. National Projects versus Regional Projects; Risk profilePolitical influence Decision taking process Operational complexity Project preparation quality Financial safety Note: Authors own evaluation

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza PPP risk rating (McKinsey) Factors influencing investors decision: Quality of a legal framework defining rights and obligations of a private investor User payment discipline and payment execution quality Credit assurance availability (guaranties) government or public agency assurance. Regularory institution procedural independence from the government. Efficiency of administration necessary period for obtaining licences and permits Juridical independence – perceived degree of goverment influence Mannor and term of ruling by authorities elected in a public ballot. Political process Rules and laws alloiwing investor exit from the undertaking. Evaluation of undertakings by examining long -term financial commitments, exchange rate history and debt recovery Insignificant Considerable Critical

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza9 Project examples Lodź – city old district development for communal appartments 5. Sosnowiec – Paleo-Park and leisure development 4. Lidzbark Warmiński – Spa and rehabilitation centre 2. Zabrze multimodal transport hub with associated development 1. Railway link and multimodal transport hub for Bytom 6. Żywiec – hospital 7. Kostrzyca – communal waste to energy processing plant

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza10 Why German firms? – 4 reasons Quantitative reason: Number of German firms registered in Poland as Polish entities; Qualitative reason: Risk assessment of the known (Polish) market; Logistical reason: Geographical proximity; Experience reason: PPP practice in Germany is more advanced than in Poland;

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza11 PLPPP in 2009 I Art. 2 section 4 Undertaking (definition) a) construction or renovation of a structure, b) provision of services, c) carrying out a work, particularly equipping an asset with devices that increase its value or usefulness, or d) other performance

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza12 Art Should the private partners compensation constitute the right to collect benefits from the undertaking resulting from partnership, or such right together with payment of a cash sum, the private partner selection is conducted by applying the provisions of the Act of on Concessions for Construction Work or Services (Journal of Laws no. …., item ….), taking into account the provisions included in this Public-Private Partnership Act. PLPPP in 2009 II

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza13 Art The public-private partnership contract may state that for the purpose of performing the contract obligations, the public entity and the private partner will establish a capital company, a limited partnership or a limited joint-stock partnership. The public entity cannot act directly as a general partner. PLPPP in 2009 III

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza14 PLPPP in 2009 IV Art The financing of undertakings from the state budget amounting to more than PLN 100,000,000 ( 28,2m) requires the consent of the minister responsible for public finance matters, in addition to funds allocated for financing the operating programmes referred to in the Act of 6 December 2006 on Development Policy Rules. When giving consent the minister responsible for public finance matters will take into account the effect of planned state budget expenses on securing public finance.

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza15 Art The best bid is that containing the most favourable balance of fee and other criteria relating to the undertaking. 2.Bid assessment criteria could be in particular: 1)division of tasks and risks related to the undertaking borne between the public entity and the private partner; 2) dates and amounts of expected payments and other performances of the public entity, if scheduled; 3) division of income generated by the undertaking between the public entity and the private partner; 4) relationship between contribution made by the public entity and the private partners contribution; 5) performance effectiveness of undertaking including the effectiveness of the use of assets; 6) criteria relating directly to the subject of the undertaking, particularly offered quality, functionality, technical parameters, level of technology advancement, maintenance costs, servicing. PLPPP in 2009 V

D G D DOLNOLĄSKA GRUPA DORADCZA ©Dolnośląska Grupa Doradcza16 Enquiries to: Dolnośląska Grupa Doradcza Tel: Fax: ul. Strzegomska 55c, Wrocław Poland Thank you for your participation Witold Grzybowski Telefon: partnerstwopublicznoprywatne.info