Poland undergoes major surgery

Poland is receiving the biggest share of the EU 'Phare' funds available to update its infrastructure, of all the pre-accession countries. In 2001 it secured a total of EUR 467 mln.

The new, decentralised structure of the Phare, (Polish-Hungarian Assistance for Reconstruction of the Economy) programme, introduced in 1999, means that civil servants from member states of the EU are 'twinned' with counterparts in pre-accession countries, and within Poland, for one, the administration is led by the Under-Secretary of State for the Economy, responsible for economic and social cohesion. Various implementing agencies have also been set up, specifically to help prepare execution of the programme in Poland's regions. The work of each of these agencies focuses on a group of voivodships at any one time.

Project fiches
In the regions themselves, marshal offices work with local authorities to identify infrastructure needs. They then prepare project 'fiches', ten to fifteen page documents detailing proposals for infrastructure development, which when checked by a local steering committee, then the Programme Authorising Officer in the Ministry of the Economy, go to Brussels for approval. If this occurs, the document is attached to a 'financing memorandum', which constitutes an agreement between the European Commission and the Polish government and the next stage of the project's life can begin.
The 'financing memorandum' is published on the EU's website and the local authorities prepare the tender documents, announce the tender, then sign the agreement with the executor, all of which takes a very long time: a year to a year and a half. The implementing authorities oversee this process in the various regions under their jurisdiction.

Tenders are carried out according to European Commission rules and almost all of them are 'open'. Those that are international are published in an EU journal as well as on the web page,, and details of local tenders, those involving less than EUR 5 mln., can be found on the latter. The information includes the general scope of the work, the organisation responsible for launching the tender and deadlines. ,Any company from the European Union, the Phare programme, Malta, Turkey and Cyprus, can participate in a tender," says Zbigniew Obłoza, Deputy Director of the IAPCCP, (Implementing Authority for the Phare Crossborder Co-operation Programme). Most winners in Poland tend to be Polish firms, mainly because there is, naturally enough, a higher representation of them in the competition for contracts, though others from countries such as Lithuania and Portugal even, have been successful. ,We have no problems with appeals," says Mr. Obłoza.

The Polish Agency for Enterprise Development, (PARP) is the implementing authority for infrastructure projects under the Phare 2000 programme. ,We are responsible for twenty-seven projects in five Polish regions: Warminsko-Mazurskie, Podlaskie, Podkarpackie, Slaskie and Lubelskie, of which six have already been contracted," says Cezary Golebiowski, Director of PARP's Regional Development Unit. The biggest of these is the construction of a tunnel under railway tracks, which will extend ul. Ksiedza Popielszki to ul. Skladowa in Bialystok, of a value of around EUR 13,019,000, of which EUR 4,320,000 will come from the Phare programme. It will be constructed by a consortium of Budimex Unibud and Mostostal Kraków, from December 2001, to be complete in October 2003. PARP's deadline for contracting all its projects is November this year and they are all due for completion before the same month next year.
,Each Phare programme is in theory given three years to finish contracting, then another year for execution of its projects, but in reality, the time is limited to two years for contracting and one year for completion of the projects, because the financing memorandum agreement between the Polish government and the EU for Phare 2000, was signed in December 2000, making it impossible to start anything that year," according to Mr. Golebiowski. This is the reason why on the EU's enlargement web-site, there are currently no infrastructure projects listed for Phare 2002, as the financing memorandum has as yet not been signed. As for Phare 2000, PARP will continue to ,monitor the projects for five years after completion", says the RDU Director.


office & mixed use development

BIG Bank Gdański at Reform Plaza

Millennium Plaza

For a few months now, there has been some speculation in Warsaw's real estate market about where the new premises of BIG Bank Gdanski might be. Two office buildings have been mentioned: Eurocentrum and Reform Plaza. Although they haven't made any any official decision yet, we now know that the bank has chosen the latter.

Reform Plaza, based in Plac Zawiszy, Warsaw, has one of the highest media profiles of all the buildings in the capital. Built in 1999 by Reform Company and owned by Sabri Begdas and the Buyukbarak brothers, the building's architect, Vahap Toy, is currently being widely linked to an alleged investment in Biała Podlaska.

Sell and lease back
Three years ago, Reform Company sold the ten lowest storeys of its office building, as it was having difficulties repaying its credits for development investments, and the remaining part of the development was sold in May this year. The transaction with Prolim S.A, a leasing company from Sopot, was of the sale-and-lease-back type. Reform Company is therefore paying instalments to Prolim for 13 years, after which the building will again become its property. ,Reform Company is paying all the instalments on time, so we have no complaints about our dealings with them," says Marek Nowotny, President of Prolim. He adds, however, that any delays in payment would mean they would have to leave the building within three weeks.

Leasing from the bank
Prolim S.A. has only three shareholders: President Marek Nowotny with 47 percent of the shares, Jerzy Jedykiewicz with 27,5 percent, and Big Bank Gdanski with 25,5 percent. That is how, through Prolim, BIG BG has become co-owner of Reform Plaza.

Friends of BIG BG
In spring of this year, a group of American investors represented by Amnon Shiboleth bought 51 percent of the shares in Reform Company and signed an agreement with BIG BG to finance construction of Blue City, (formerly Reform Centre). Business ties between Reform Company and BIG BG are thus getting stronger.

Reform - Millennium
A source who is about to take up a managerial position at Reform Company and direct Blue City's development, told us that the office building in Plac Zawiszy will soon have a new name: Millennium Plaza, (Millennium is the name of a retail banking branch which is part of BIG BG), and that BIG BG will occupy 14 storeys.

The question: how much?
"As far as I know, BIG BG has been looking for 10,000 sqm. in one building," says one office agent. ,7 storeys would be enough for them, but if the bank wants to occupy up to 14 storeys, it would need 20,000 sqm."

A nice name
BIG BG's spokesman Wojciech Kaczorowski, says that no decision has been made about the new premises. When asked about co-ownership of Reform Plaza through Prolim, he said that the Sopot firm was an old investment from before the merger with BIG. When asked about the name 'Millennium Plaza', he said "I like it".