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The Warsaw Voice » Real Estate » January 21, 2009
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Change Slow in Coming
January 21, 2009 By A.R.    
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The past few years have seen little improvement in the way the government treats investors and companies carrying out construction projects in Poland, said participants in the 11th Investors' Obstacle Course (ITP) conference held by the Voice Jan. 14-15.

The promises of successive governments that the process of preparing and carrying out construction projects in Poland would be simplified and shortened have not been kept, conference participants said.

This year's conference, held at Warsaw's Okęcie Airport Hotel, was dedicated to issues such as priority changes to legal regulations governing urban planning and zoning, construction, and environmental protection. Participants also discussed investment projects related to the Euro 2012 soccer championships that Poland is hosting together with Ukraine.

Over the past 11 years, the Investors' Obstacle Course conference has become a platform for the exchange of views and experiences between companies in the infrastructure and construction sectors on one hand and central and local government officials and parliamentarians on the other. Executives from construction companies, power and telecommunications companies, and developers regularly meeting at ITP conferences have come up with a long list of complaints about legal and administrative barriers that hinder investment projects.

"Each new government taking power declared that it understood investors and was aware of their problems. But things are much worse when it comes to delivering on these promises," said Mieczysław Jaśkowski, secretary of the Investors' Conference Presidium. "Over the past three years, practically no major promise has been kept with regard to improving the investment process. Only a minor simplification was introduced to the process of changing the status of agricultural land within city limits."

The government's promise of introducing thorough changes to legal acts regulating investment in the construction sector-including laws on urban planning and zoning, environmental protection, construction, surveying, and energy-still exists on paper only, conference participants said. According to developers, public authorities continue to interfere excessively with the construction process, which sometimes produces disastrous effects.

Robert Dziwiński, Poland's chief construction supervision inspector, disagreed with that view. The process of amending the legal system, albeit slow, is progressing, and "the trend whereby the state is withdrawing from the investment process is unstoppable," Dziwiński said.

There is a chance that investors' lives will soon be made easier as the lower house of parliament, the Sejm, is finishing work on amendments to construction law. According to Olgierd Dziekoński, undersecretary of state at the Ministry of Infrastructure, the proposed changes will meet investors' expectations. "The changes were designed so as to achieve a compromise between shorter procedures and maintaining quality in the investment process, the emphasis being on quality," Dziekoński said.

Environmental protection regulations have been one of the greatest barriers to investment in the construction sector, according to conference participants. This is largely due to stringent European Union standards in this area. In the case of infrastructure projects, such as freeways and railroads, a "wise compromise" is needed, and some kind of "golden mean" has to be found between a modern country's needs and environmental protection, participants said.

"If the current environmental regulations had been in force when freeway construction was at its peak in Western Europe, certainly not all of these projects would have been carried out," said Ryszard Kowalski, chairman of the Investors' Conference Presidium.

Maciej Trzeciak, undersecretary of state at the Ministry of the Environment, noted that Poland took advantage of an opt-out clause in certain areas while adapting its environmental regulations to EU standards.

Janusz Mikuła, undersecretary of state at the Ministry of Regional Development, said that Poland needs a stable and predictable legal system. "It's not normal when individual projects require special laws to be passed in order to be carried out," Mikuła said.

During the discussion, investors accepted some of the arguments put forward by the public administration, including the fact that decision-making processes must be transparent, while officials agreed with investors that administrative procedures should not "stretch out endlessly." This is especially important now that Poland is preparing to host Euro 2012, conference participants said.

Rafał Kapler, chairman of the board of the National Sports Center, said that work on Euro 2012 venues was progressing according to schedule and there was no danger that the facilities would not be completed on time.

Lech Witecki, general manager of the National Roads and Freeways Authority, said that planned freeway construction projects would have gone ahead even if Poland had not been selected to host Euro 2012. Today infrastructure projects could be an antidote to the impending economic slowdown, especially as some of these projects will be financed from European Union funds, Witecki said.

Meanwhile, some cities are having problems financing their investment projects, local government officials said. Michał Olszewski, director of the Investor Relations Department at Warsaw City Hall, said that commercial banks are cautious about granting loans to cities for their projects at a time of a financial crisis. International financial institutions, such as the European Investment Bank, are more willing to invest in municipal projects, Olszewski said.
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