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The Warsaw Voice » Real Estate » January 7, 2009
EURO 2012
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January 7, 2009 By A.R.    
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Soccer fans were not the only ones to cheer when in April 2007 Poland and Ukraine were selected to host the Euro 2012 soccer championships.

The Polish economy and everyone living here stand to benefit from this event. Thanks to Euro 2012, many new projects will be carried out, experts say. New infrastructure, hotels, roads, restaurants and cutting-edge stadiums will be built.

A study by the economy ministry shows that Euro 2012-related projects will generate more than 100,000 new jobs, in addition to higher spending on capital goods and increased foreign investment.

The ministry says that construction and tourist businesses, including both contractors and materials suppliers, will benefit the most before the event, while hotels, food producers and retailers will earn the most during the championships. Advertising agencies can also expect higher sales.

Euro 2012 is expected to raise Poland's profile internationally, which should translate into greater interest in the Polish market among foreign companies, in terms of both portfolio and direct investment.

Poor transport infrastructure is one of the main barriers to a greater influx of foreign direct investment in Poland, experts say. Once Polish cities become better integrated into Europe's road infrastructure system, increased foreign investment should follow, along with higher production by domestic companies. Preparations for Euro 2012 involve the construction of about 900 km of freeways and modernization of eight airports and many rail lines. Three new sports stadiums are expected to be built and three others will be expanded.

Market research company PMR estimates that Euro 2012-related projects in Poland and Ukraine will be worth almost 38 billion euros in all, with Poland expected to account for about 60 percent of the total. Roads are expected to claim one-third of total Euro 2012-related spending in Poland, double the amount that will be spent on similar projects in Ukraine, PMR says. In Poland, up to 12 billion euros could ultimately be spent on road projects before the championships.

Apart from stretches of the A2 and A4 freeways, almost the entire length of the A1 freeway has to be built, in addition to a network of expressways, of which the most important will be the S5 highway linking the southwestern city of Wrocław with Poznań in the west and Gdańsk in the north. Another sizable part of overall spending will involve roads in cities that are expected to be Euro 2012 venues, including the construction of beltways.

The largest railway projects in Poland during this time will include the modernization of rail lines connecting Euro 2012 venues, the construction and modernization of more than a dozen railway stations, and new rail links between airports and city centers. Polish rail company PKP Polskie Linie Kolejowe (PKP PLK) wants to spend about zl.18 billion on projects related to Euro 2012, including modernization of nine sections of railroad with a total length of 936.9 km. Projects involving expansion of municipal streetcar transportation are also being planned.

The Polish Air Navigation Services Agency (PAŻP) estimates that Polish airports will have to handle up to 400,000 passengers before and after each game. As a result, the number of takeoffs and landings in the cities where Euro 2012 matches will be held could grow by as many as 300 daily, the agency says. To deal with this, Warsaw's Okęcie airport needs two new piers and its apron has to be renovated, according to the PAŻP. Other airports will develop as well. Gdańsk will get a second passenger terminal for 38 million euros, along with a new taxiway and spaces for planes to park. By 2012, Poznań's Ławica airport will have its terminal expanded and its runway modernized at a cost of about zl.340 million. Cracow-Balice's terminal will be expanded to accommodate about 9 million passengers a year. Katowice-Pyrzowice Airport plans to spend over zl.500 million on modernization.

Boom for hotels
The hotel sector is in for big investments, too. International hotel chains decided to build new hotels in Poland as soon as the country was selected to host Euro 2012. Domestic investors are also increasingly keen on such projects.

Building a hotel in a good location seems to be a safe bet today. Poland lags far behind other European countries in terms of the number of hotel beds. Hosting Euro 2012 is just one more argument to build more hotels. The Polish Institute of Tourism estimates that about 100 hotels per year will be built up to 2012.

Poland's largest cities also stand to benefit from the championships. The total value of projects in six key Euro 2012 cities-Poznań, Gdańsk, Cracow, Wrocław, Warsaw, and the Silesian conurbation-is estimated at zl.20 billion. For example, Cracow plans to renovate its stadium but also has new projects lined up: a new railway station under the Galeria Krakowska shopping mall, modernization of the city's public transportation system with a view to linking it with the suburban rail service, new rail tracks leading to the airport, and a sports and physiotherapy complex.

Sports minister Mirosław Drzewiecki says all the planned projects are being carried out to schedule. "We're doing everything 150 percent," Drzewiecki says. "We will build not just four but six stadiums, and should the problems of our Ukrainian partners continue, we will be ready to take over an additional part of the championships."

According to Drzewiecki, Poznań and Cracow are the farthest along as far as stadiums are concerned, with ongoing modernization of the Lech Poznań and Wisła Cracow soccer club facilities. As for cities where new stadiums will be built, work is the most advanced in Warsaw, Drzewiecki says.

Marcin Herra, president of PL.2012, a company responsible for handling Euro 2012-related projects, says that other infrastructure projects related to the event are also moving ahead as planned. Speaking during a recent Polish-Ukrainian Economic Forum entitled Economic Opportunities for Poland and Ukraine in the Context of Euro 2012, Herra said, "If we continue working as consistently as we have been over the past few months, we will definitely complete our preparations for Euro 2012 on time." The to-do list includes more than 360 investment projects, not including training centers and hotels, according to Herra. "By the third quarter of 2009, more than 50 percent of these projects will be under construction," he said.
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