2nd Annual Municipal Projects in Poland Forum 2012
Our 2nd Annual Municipal Projects in Poland Forum took place on the 17 - 18 October, 2012 at the prestigious Westin Hotel in Warsaw. This event brought together leading experts not only from Poland but from all across Europe who are involved in this important market, addressing the issues facing the financing and delivery of municipal projects in Poland across the following industries: Healthcare, Social Infrastructure, Transport, Waste and Water Management, Energy Generation, and Energy Efficiency.
We would like to thank Mr Witold Grzybowski, Partner at Collect Consulting, for chairing the conference. Mr Grzybowski succeeded in ensuring the conference flowed and kept to schedule and I would like to thank him for providing the opening speech highlighting the importance of this topic.
We would also like to thanks our sponsors, which included: Bank Pekao SA and Mott MacDonald Limited Sp. z oo, whose tremendous support has enabled us to once again host this important conference.
(To see Chairman's concluding remarks in Polish, please go to: http://www.eelevents.co.uk/news/muncipal-projects-post-conference-news.html)
Our opening session on Day One focused on 'Managing Municipal Budgets'. Opening our conference, the first presentation was provided by Mr Bogdan Nawrocki, Deputy Director of Debt and Financial Policy at the City of Warsaw Office. Mr Nawrocki focused on the importance of strong budget management utilising Warsaw as a case study, providing an insight into Warsaw’s current strategy for managing debt, as well as highlighting Warsaw’s debt profile and expenditures.
Mr Robert Kaluza, Deputy Director of the Department of Individual Project Preparation within the Ministry of Regional Development, provided the subsequent presentation which focused largely on combining PPP with other financing mechanisms, particularly EU funds. Mr Kaluza provided insightful case studies from Poland of projects already executed, from swimming pools to broadband projects.
The following presentation was provided by our conference chairman, Mr Witold Grzybowski, who highlighted the obstacles facing PPP and what needs to be done to improve processes and efficiency for municipalities, from the influence of laws and regulations to the need to create an action plan which can be adhered to.
We then hosted the first coffee break which enabled our guests to network and discuss the topics outlined during the morning so far. Following the break, the next presentation was provided by Mr Christos Kontogeorgos from the EIB, who presented on the role of JESSICA in financing municipal projects providing municipalities with an insight into how they can access these funds.
This was followed by a presentation by Ms Ewa Wnukowska from the Ministry of Regional Development who also discussed JESSICA but from a different perspective focusing predominantly on the current and past investments in Poland and the impact of these on the municipalities. She also spoke about the future of JESSICA and the possibility of combining this fund with PPP, however stated that there is a long way to go before this can be achieved.
Our next session comprised of our first panel discussion which provided a comprehensive overview of the range of financing mechanisms that are available to municipalities. This panel was moderated by Mr Kacper Kozlowski, Project Director at Investment Support, and panellists included Mr Christos Kontogeorgos (EIB); Ms Ewa Wnukowska, (MRR); Mr Jan Dziekański (BGK); Mr Wojciech Gebicki (Wycliffe Management); Ms Agnieszka Szymczyk (EBRD), and Mr Marcel Babczynski (Erste Group Bank). This panel focused on the feasibility of PPP in financing municipal projects, however it was concluded that there is a still a lot to be done to address the many factors hindering PPP, in particular a need to make processes less complex and more efficient. Panellists also discussed JESSICA and it was agreed that JESSICA can fill the gap that commercial banks cannot, however the opinions as to whether PPP can be combined with JESSICA were not overly positive. When asked ‘Is the future bright for municipal projects?’, the overall consensus was that it was but we need to learn from past mistakes rather than let past failures rule people’s perceptions of PPP.
Our last session before lunch was the first of our Municipal Showcase sessions provided by Ms Anna Andrejuk from the City of Olsztyn who highlighted the investment opportunities in this municipality.
Following a well-deserved lunch break which provided an excellent platform for networking and meetings, Mr Frederik Roeder introduced our next session which focused on Healthcare PPP. Mr Frederik Roeder (Managing Director at Healthcare Solutions, Germany) provided his presentation through videoskype providing interesting case studies highlighting how healthcare facilities are financed and provided in other countries, these being Poland, Germany and Georgia.
This was then followed by a presentation by Mr Igor Lebski (Business Development Manager at Hospitals Projektentwicklungsges.m.b.H), who provided a comprehensive insight into the Austrian experience in healthcare PPP’s, highlighting the importance of balancing the risks and profits for both the private and public sector, as well as the need to clearly define strategy in order to ensure success. In summary, Mr Lebski listed three factors to success as Planning, Optimisation and Cooperation.
The healthcare session was concluded with an in-depth panel discussion moderated by Mr Bartosz Mysiorski (PPP Specialist at Centrum PPP). Panellists consisted of Mr Adam Jarmicki (Penta Investments sp. z o. o.); Ms Elizabeth Niedzwiecki (N+parametric design Sp z o.o.); Mr Jerzy Gryglewicz (Lazarski University); Mr Sebastian Kowalski-Paszko (Lazarski University); and Mr Igor Lebski (Hospitals Projektentwicklungsges.m.b.H). Panellists agreed that this sector is very problematic for investors, that the expectations of the public are incomparable to the reality, and that there is a lack of willingness to share risks. Despite these initial concerns, panellists were eager to remain optimistic. Panellists discussed the need to improve cooperation with NFZ and the guarantees that they provide need to be longer. It was also agreed that there is a huge need for better regulation in order to encourage investment in this sector.
Following our third and final networking coffee break the day, Mr Rafal Cieslak (Partner and Founder at KDG Law firm) opened our Social Infrastructure session with a case study presentation on the first Polish examples of PPP in schools. Mr Cieslak concluded that although PPP in this sector is relatively new, there are already projects being executed and this mechanism is set to gain popularity. Mr Cieslak was optimistic about the possibility of hybrid PPP’s particularly for thermomodernisation projects, and highlighted that although there are only few projects, these are of high quality.
Mr Boleslaw Meluch (Polish Bank Association/European Property Institute) provided the subsequent presentation discussing means of creating the necessary conditions for the implementation of PPP and long term housing projects in Poland. This sector is gaining interest from investors, and municipalities need to ensure the attractiveness of this sector to investors.
Our Social Infrastructure session was concluded with our final panel discussion of the day which addressed the key question of ‘How can municipalities attract private sector investment into public projects?’. This panel was moderated by Mr Philip Andrews (President of the Saritor Group) and panellists consisted of Mr Tadeusz Chowaniak (City of Zawoya); Mr Rafal Cieslak (KDG); Mr Piotr Galas (PKO Bank Polski S.A.); and Mr Bolesław Meluch (Polish Bank Association / European Property Institute). Panellists discussed the attractiveness of social infrastructure projects, focusing largely on social housing, schools, civic buildings, and sports and leisure facilities. Discussions focused on the methods for generating revenue and therefore ensuring returns for investors, they also discussed the need for the support of the state. There was much debate over the financing from banks over so-called “risky” projects, and investors confirmed that they do not shy away from such projects, however they expressed their right to assess bankability. Mayor of Zawoya, Mr Chowaniak, stated that as a municipality, they are ready for PPP and congratulated other small municipalities in leading the way for PPP.
Day Two began with a presentation from Ms Barbara Cendrowska from Bank Pekao (Silver Sponsor) who introduced our Transport Infrastructure session, focusing on the bank’s experiences in financing municipal transport projects in Poland. Ms Cendrowska identified the key factors facing PPP which include the lack of rules and regulation, the high level of complexity and the debt of local governments and stated that these must be taken into account.
This was followed by our second municipal showcase session by Ms Katarzyna Sobocińska (City of Poznan) who highlighted the investment opportunities in Poznan, focusing on past and current transport projects in the city, particularly parking projects.
Following Ms Sobocinska, we heard an extremely interesting presentation from Mr Szymon Konop from PKP SA who provided an insight into the PKP’s role in the modernisation of Polish railway stations. Mr Konop discussed PKP sources of financing and PKP’s activities in relation to upgrading stations, as well as highlighting changes in how consumers use railways stations, i.e. for commercial purposes as well as a waiting area, and expressed the importance of acknowledging this trend.
Our transport session was concluded with a panel discussion moderated by Mr Wojciech Gebicki (President of Wycliffe Management). Panellists consisted of Mr Adam Jędrzejewski (IPPP); Mr Kacper Kozłowski (Investment Support); Mr Maciej Zawadzki (APCOA Parking); Mr Szymon Konop (PKP SA); and Mr Andrzej Bogucki (PL.2012 Sp. z o.o.). Key topics of discussion focused on parking projects and the need to develop commercial activity from paid parking, with comparisons to projects in Belgium. It was agreed that PPP needs to be properly managed and promoted to find the most suitable and flexible partners. Foreign investors are eager to invest but procedures need to be more transparent and, although regulation is in place, it needs to be modernised. Perceptions need to be more positive and we need to not focus on failed projects, but to look ahead to ensuring future projects are a success. Panellists agreed that PPP worked better before it existed as a notion.
Following the morning coffee break which allowed guests to network and discuss the key points from the morning session, Ms Małgorzata Skucha (NFOSIGW) opened our Waste and Wastewater Management session discussing the role of the National Fund of Environmental Protection in financing waste and water management projects. Ms Skucha discussed the recent act of cleanliness which has led to recent changes within municipalities in how they sort and manage their waste. She discussed the importance of educating communities in order to sort their own waste effectively.
Mr Feliz Mil-Homens and Mr Paulo Rodrigues from the Portugese WtE association (CEWEP) and waste management company (LIPOR) provided a joint case study highlighting the waste management practices and solutions in Portugal. This presentation provided lessons learned from the Portugese market and important insights for the Polish market to take into consideration.
The subsequent panel discussion was moderated by Ms Aneta Pacek-Lopalewska (APL Legal), and answered the question “Are environmental projects a viable investment: What are the options?”. Panellists consisted of Mr Pawel Pawlowski (City of Warsaw); Mr Piotr Gepert (Veolia Woda Sp. z o.o.); Ms Małgorzata Skucha (NFOSIGW); and Mr Slawomir Listkiewicz (Bank Pekao S.A). Mr Pawlowski discussed the recent opening of a new bureau within the City of Warsaw specifically designed to deal with all issues in relation to waste management for the city. Panellists agreed that the challenge is to find/create a profitable business case from waste, however they also agreed that this was not an easy market. Panellists discussed the huge expense of these projects and agreed that a private partner is necessary to provide financing. They also discussed recommendations from EU that Hybrid PPP’s are the way forward, however they were adamant that there is no time to experiment and municipalities need to act now.
After this panel, guests were able to enjoy the networking lunch break, which was then followed by our Municipal Energy Generation session. This was opened by Mr Matthias Pahlke (NORD LB) who has extensive, international expertise in relation to WtE, and was able to draw upon his experiences working on the Poznan WtE project in order to highlight the key issues facing PPP for such projects.
This presentation was then succeeded by a presentation by our Associate Sponsor, Ms Dominika Nowosinska from Mott MacDonald Limited, who presented on effectively delivering WtE. This presentation provided a vital insight into the importance of understanding the risks involved in such projects, with particular focus on the financial and technical risks as well as pricing policies.
This session was summarised with an interactive panel discussion addressing the options available to municipalities for energy generation. This panel was moderated by Ms Agnieszka Gajewska from InfraLinx Capital, and panellists consisted of Mr Lukasz Dziekonski (Marguerite 2020 Fund); Mr Mathias Pahlke (NORD LB); Mr Randy Mott (CEERES); Mr Krzysztof Hoinca (Mott MacDonald Limited Sp. z o.o.); and Mr Józef Neterowicz (Association of Polish Districts). All panellists were extremely passionate about the topic in hand, and debated the key issues hindering the market. Of particular importance were the laws and regulations which are delaying the market, particularly Biogass and WtE. It was agreed that this sector is particularly attractive however it needs better conditions in order to develop itself. Panellists also discussed the difficulty in guaranteeing waste production and the revenue generated, as well pointing out the lack of coherent EU guidelines to be adhered to.
Our final session was made up of three presentations addressing a topic which is of particular interest at the moment: Energy Efficiency. This session was opened by Ms Ewa Winkowska from KAPE who provided a detailed insight into how municipalities can use the white certificates system in order to reduce costs and increase energy efficiency measures within their city. This presentation provided an extremely practical overview of this system with important recommendations for municipalities.
This was then followed by an insightful presentation from Mr Michael Suska (CEO of Energomix) who focused on the practical measures which municipalities can implement in order to help them increase their efficient use of energy and in doing so, significantly reduce their costs.
Mr Marcin Piwonski from Siemens provided the last presentation of the day which highlighted the Radzionkow case study which involved the implementation of energy efficiency measures within 4 schools and a kindergarten within the municipality. Mr Piwonski then highlighted the risks facing both the public and private partner involved in the Radzionkow project.
This brought us to the end of our 2nd Annual Municipal Projects in Poland Forum. Mr Witold Grzybowski concluded the conference by providing some closing remarks. We would like to once again thank our sponsors, Bank Pekao and Mott MacDonald, for their participation and support for this conference. We would also like to thank all speakers, panellists and panel moderators for their contribution to the event, as well as all our media and association partners for promoting the conference.