Available EU funds for investments in the transport industry
Due to long-standing neglect in the development of transport potential in Poland, making up for accumulated investment backlogs using only national budget funds poses a significant problem. A particularly low share of transport in investment expenditure on the economy occurred in the 1990s. In some years, this share was only at the level of 3.5%, while according to generally accepted standards, it should not be less than 10%.
Also currently, spending appropriate financial resources from the national budget on necessary investments in transport is practically impossible. According to data from the Ministry of Finance in 2009, the state budget deficit – similar to 2008 – amounted to 24-25 billion PLN. However, the actual deficit in 2009, due to the exclusion of part of the debt from the budget (loans of the National Road Fund, loans of the Social Insurance Fund), is even three times higher than that officially presented by the Ministry of Finance. Furthermore, for the first time since 2009, financial flows between Poland and the EU budget are a component of Poland’s budget.
Problems with balancing the budget this year will deepen, as an increase in the budget deficit is expected. Under these conditions, the effectiveness of investment activities in the transport sector largely depends on the use of EU funds. Until joining the European Union structures, Poland had the opportunity to use non-repayable financial assistance granted under the PHARE, ISPA, and SAPARD programs. These programs played an important role in the process of financing transport investments. In total, between 1991 and 2003, Poland obtained 1.9 billion euros from pre-accession aid funds (PHARE and ISPA) for transport needs.
These instruments were a significant factor mobilizing the public sector to engage more broadly, especially in the development of transport infrastructure. However, above all, the ability to use the financial instruments of the European Union’s pre-accession policy was of significant importance during this period for preparing candidate countries to use the proper instruments of EU structural policy.
Poland’s accession to the EU on May 1, 2004, created a formal basis for using all its regional initiatives, including: structural funds and the Cohesion Fund. As a result, since joining the EU structures, Poland has had significantly greater opportunities to finance transport projects than in the 1990s.
In the years 2004 – 2006, Poland had 12.5 billion euros at its disposal, one-third of which came from the Cohesion Fund, and the remainder from structural funds. Transport projects during this period were included in three program blocks:
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Sectoral Operational Programme Transport – SPOT (financed from the European Regional Development Fund)
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Strategy for the Use of the Cohesion Fund
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Integrated Regional Development Operational Programme (under measure 1.1. Modernization and expansion of the regional transport system, co-financed by the European Regional Development Fund).
In turn, in the 2007 – 2013 budget period, Poland has 67.3 billion euros to manage from the EU budget, including approximately 25.1 billion euros for investments in the transport sector. Transport investments are included in two nationwide programs: Infrastructure and Environment and Development of Eastern Poland, and additionally in 16 regional operational programs. In addition to these programs, a separate EU cohesion policy program is being implemented in 2007 – 2013, referred to as European Territorial Cooperation (ETC), which replaces the INTERREG Community Initiative from the previous budget period.
Use of EU financial resources in the 2004 – 2006 budget period
The process of qualifying applications for co-financing from structural funds for the years 2004 – 2006 lasted until the end of June 2009. However, activities related to the final settlement of implemented investment projects are still being carried out.
The effectiveness of using EU funds is evidenced primarily by the amount of reimbursement paid to beneficiaries by the European Commission. In the first years of the 2004 – 2006 budget period, the use of EU funds included under the Sectoral Operational Programme Transport was on average half as low as in the case of other operational programs. Data from the European Commission show that the value of reimbursement paid to beneficiaries under the Sectoral Operational Programme Transport amounted to only 0.5% of the available allocation by the end of 2005, and 16.2% by the end of 2006.
Particularly low use of EU aid was characteristic of actions marked as: “improvement of access infrastructure to seaports” and “implementation and monitoring of road safety improvement measures on national roads“. By the end of 2006, 6% and 5% of the allocation provided for these actions were paid to beneficiaries, respectively. The action marked as “construction of motorways and expressways” (8% of the provided allocation) was also characterized by a low level of reimbursement. However, the greatest difficulties were caused by the implementation of the action concerning the “development of intermodal system infrastructure“. With regard to this action, no contract was signed with an interested entity by the end of 2006, and as a result, these funds were not launched. In subsequent years, EU funds under SPOT were used much more effectively. Data from the Ministry of Regional Development show that at the end of June 2009, payments to beneficiaries amounted to 91.82% of available funds, and 92.12% at the end of July 2009. By the end of July 2009, funds for the action related to “improvement of access infrastructure to seaports“, which was implemented under PRIORITY I “sustainable sectoral transport development“, were used to the greatest extent. The funds granted for this action from the European Regional Development Fund, as shown in Table 1, were reimbursed to beneficiaries at a level of 96.97%. For the implementation of all actions under PRIORITY I, the level of reimbursement at the end of July 2009 reached approximately 1,663.2 million PLN, which corresponded to 95.03% of the granted allocation.
The article comes from the magazine “Logistyka” 1/2010.