The economic downturn and the associated greater uncertainty in operations, as well as the relatively low level of capacity utilization, cause entrepreneurs to refrain from investment decisions, and thus also apply less frequently for EU funds for investments. In Poland, this problem is primarily noticeable in the private sector. As shown in Figure 1, negative growth in investment expenditure has persisted in the private sector in Poland since the second quarter of 2009.
On one hand, a weaker economic climate means a lower propensity to invest, but on the other hand, the implementation of investment projects is one of the essential mechanisms for stimulating economic activity. Especially when implementing large investment projects, a demand-side mechanism for stimulating economic growth emerges. Therefore, as part of anti-crisis measures, investments, particularly in the field of transport infrastructure, should play a special role. In this light, the process of efficiently implementing infrastructure development programs supported by European funds is of significant importance. Greater absorption of EU funds means an increase in investment expenditure, which is a source of further multiplier effects.
It is therefore worth conducting constant monitoring of the level of implementation of operational programs. This analysis can be a source of knowledge as to whether the economic slowdown is indeed a barrier to the absorption of EU funds, or whether the available EU funds are a factor counteracting the economic slowdown.
The weaker economic climate is to some extent the cause of less interest in the implementation of infrastructure investments within the framework of public-private partnership. Serious difficulties in obtaining financial closure by private entities mean that a significant portion of infrastructure projects is implemented directly by the public sector.
Furthermore, in the face of the economic slowdown, the Polish government has taken steps to accelerate the implementation of EU programs. Procedures for assessing the environmental impact of projects have been shortened, and a number of specific regulations have been simplified, including those related to the PPP system. However, no appropriate measures have been taken to simplify public procurement procedures. These actions are particularly important, as in the current 2007-2013 perspective, the process of spending EU funds is proceeding relatively more slowly than in the 2004-2006 period. This phenomenon may be worrying, given the fact that the period for spending funds from all sources (including the Cohesion Fund), in accordance with the n+2 rule, expires in 2015.
An analysis of the contracting process for structural funds and the Cohesion Fund granted to Poland for the years 2007-2013 shows that at the end of November 2010, among the national operational programs, the Innovative Economy Operational Program (IE OP) was the most advanced in implementation. As shown in Figure 2, 62.2% of the allocation granted for 2007-2013 had already been distributed under this program, and payments made by the European Commission to beneficiaries accounted for 11.6% of the allocation. Compared to the corresponding earlier period (November 2009), this was a 1.6-fold and 3.6-fold increase, respectively.
Lower levels of utilization are characteristic of the Infrastructure and Environment Operational Program (I&E OP), the European Territorial Cooperation Operational Program (ETC OP), and the Development of Eastern Poland Operational Program (DEP OP).
This is largely the result of more complex and time-consuming procedures in the case of infrastructure investment implementation. This can be evidenced, for example, by the number of applications submitted after formal assessment, which in the case of the I&E OP (the largest in terms of budget) at the end of November 2010 was over 6 times lower than in the case of the IE OP and 42.1 times lower than in the case of the Human Capital Operational Program.
Under the I&E OP, 49.7% of available EU funds had been contracted by the end of November 2010 (a 3.3-fold increase compared to the same period of the previous year). Meanwhile, European Commission payments to beneficiaries of this program increased from 3.11% to 9.6% between November 2009 and November 2010 (Figure 3). The signing of co-financing agreements is also proceeding relatively more slowly in relation to the European Territorial Cooperation (ETC OP) and Development of Eastern Poland (DEP OP) Operational Programs. As shown in Figure 2, by the end of November 2010, the value of signed agreements amounted to 44.5% of the allocated funds for the ETC OP and 50.4% of the allocated funds for the DEP OP. Compared to the situation at the end of November 2009, this level increased 1.5-fold and 2.1-fold, respectively.
In turn, the value of European Commission reimbursements to beneficiaries of the “Development of Eastern Poland” Operational Program increased from 3.16% (as of the end of November 2009) to 12.9% in November 2010. This was therefore an increase of over 4-fold.
The article comes from the journal “Logistyka” 1/2011.