Poland has several laws that were reviewed in the course of this assessment: a PPP Law of 19 December 2008, a Concession Law of 21 October 2016 and a Public Procurement Act (“PPA”). It is also one of the jurisdictions where no specific procedure for the award of PPPs is foreseen and a reference to the PPA is made. However, the provisions of the PPP Law, the Concession Law and the PPA are rather clear and the scope of application of each law is clearly determined. Thus, foreign investors in PPPs will not only have to take a careful look into the slim PPP Law, but also into the much longer PPA. The benefit investors can expect is a detailed set of rules and well established experience with such procedures among Awarding Authorities.
Non-concession PPPs must be awarded under the PPA. Concessions are awarded in a different procedure, as set forth in the Concession Law.
Non-concession PPPs and concessions can be awarded by a public finance sector unit, its associate or a specially created entity which is owned or controlled by the public finance sector unit or its subsidiary.
The surprisingly low rating for project preparation is a consequence of a situation where the preparatory stage is no longer strictly determined by the provisions of the Law. There are no requirements in the Law for the contracting authority to perform any specific activities. However, it is common practice in Poland for the contracting authority to have legal, financial and technical advisors. The advisors assist in the project’s assessment and at the preparatory stage.
Poland is one of the most developed markets in CEE for PPP. The PPP Law 2008 as mentioned above came into effect on 27 February 2009 and replaced the PPP Act of 28 July 2005 (the “Old PPP Act”). The Old PPP Act has been heavily criticised for being overly complicated and adding too many layers of “red tape” to the implementation of PPPs. In the past, the market overcame such problems by pure avoidance, i.e. procuring PPPs through other procurement methods, particularly in the roads sector, where PPPs were structured on a DBFO basis and procured under the Act on “Toll Motorways and National Road Fund” No. 127 of 1994.
The PPP Law is designed to set a legal framework for Poland’s rapidly developing PPP market. It helps streamline the process of developing PPP projects in Poland. For example, the PPP Law removed the need for a detailed and expensive analysis, which, under the Old PPP Act, significantly increased project costs. However, the PPP Law includes a description of the main assessment criteria to be followed by the public and the private partner when implementing a PPP to assess whether the services offer value for money. Such cost saving is at the same time one of the reasons for the less successful scoring 2017/2018 PPP assessment for project preparation.
Nevertheless, Poland at least clinches a “very high” score for private party selection.
Content of the Project Agreement
The Law gives flexibility to the negotiation of most terms of the project agreement. The provisions of the project agreement depend on the approach of the contracting authority and the outcome of the negotiations with the private partners. There is also a short list of essential issues that a PPP agreement must cover to ensure that the key risks are properly allocated between the partners. A PPP agreement may also stipulate that the relevant public and private partners may jointly establish an SPV in one of four legal types: (i) a limited partnership (spółka komandytowa), (ii) a limited joint-stock partnership (spółka komandytowo-akcyjna), (iii) a limited liability company (spółka z ograniczoną odpowiedzialnością), or (iv) a joint stock company (spółka akcyjna).
Further, minor reasons for scoring fewer points are matters where the majority of the international standards applied in the assessment differ from EU Law. Examples are Poland’s restrictive approach to unsolicited proposals (due the EU procurement rules) and to state support apart from “own contributions” to PPPs (due to EU state aid and ESA 2010 rules) and to post-award negotiations with a preferred bidder (due to non-discrimination rules in EU procurement law). Finally, the liberal approach to competitive dialogues, as in all EU member states, is another reason why Poland scores poorly in some limited areas. Finally, in Poland regulatory matters are governed by specific acts so that permitting requirements or fees and their increase are not governed by the PPP Law or the Concession Law.
The risk of stranded costs to bidders for a PPP due the procedure being cancelled is higher than the risks related to the effectiveness of the review procedures. For disputes during the project implementation it would be necessary to introduce international arbitration as the standard dispute-settlement procedure. This is believed to improve the credibility and attractiveness of PPP projects. However, there are also opinions that international arbitration takes too long and is too expensive.
There are no provisions in the PPP Act allowing lenders a direct step-in right.
Just recently the government has been working on a new PPP policy. Supporting documents, i.e. guidance and model documentation are available. The Ministry of Development and its PPP Department support PPPS and provide information for public authorities.
There were some social/political obstacles to implementing PPPs in the country and not enough political willingness, but this has changed recently. The new government policy and the pipeline of PPP projects should help streamline the process of developing future PPP projects in Poland.
The government “PPP Policy” has recently been released. The “PPP Policy” is mainly an announcement of very specific actions that are to be taken by the Government by 2020. It indicates a clear direction of the development of PPP and prioritizes this formula of project implementation. It also indicates specific solutions such as a mandatory “PPP test” for projects exceeding PLN 300m, or certifying PPP projects.
Thus Poland achieves a very high effectiveness score for its PPP policy.
An impressive number of implemented infrastructure PPPs have been aggregated in Poland. However, they mainly had a small value and were implemented at the self-governmental level. There were also large highway and sports facilities projects. For these reasons Poland scores very high for its awards track record resulting in very high levels of experience in PPPs in the Polish market.
The availability of financial instruments and insurance is at a sufficient level.