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270360Financing0roads0poland Public Disclosure Authorized Public Disclosure Authorized FINANCING ROADS IN POLAND – PRESENT STATUS AND FUTURE OPTIONS FINAL REPORT JUNE 2002 comments added in October 2002 Public Disclosure Authorized Public Disclosure Authorized The views and interpretations herein are those of the authors and should not be attributed to the World Bank or to any individual acting on its behalf Financing Roads in Poland... LIST OF CONTENTS Introduction PART A: EXECUTIVE SUMMARY PART B: FINDINGS AND RECOMMENDATIONS 1 Study findings...................................................................................................... B/1 1.1 Roads and traffic - present state................................................................ B/1 1.2 Ongoing investments ................................................................................ B/6 1.3 Road financing.......................................................................................... B/8 1.4 Sector approach and European context..................................................... B/11 1.5 New programs........................................................................................... B/15 1.6 Other problems ......................................................................................... B/16 2 Recommendations............................................................................................... B/19 PART C: BACKGROUND REPORT 1 Organization and development of public roads – assessment ........................ C/1 1.1 Organizational responsibility for each category of roads ......................... C/1 1.2 Basic characteristics of public road network ............................................ C/4 1.3 Financing of Public Roads........................................................................ C/4 1.4 National road network............................................................................... C/6 1.5 Major ongoing investments....................................................................... C/7 1.6 Present road construction costs................................................................. C/8 1.7 Overview of replacement value of the existing national road network based on present construction costs .......................................................... C/9 1.8 Assessment of voivodship, powiat , gmina and urban roads situation .... C/10 1.9 Reorganization of the road sector and existing bottlenecks.................... C/13 Financing Roads in Poland... 2. The impact of increased axle load of heavy goods vehicles (HGVs) on the Poland's road network ...........................................................................C/19 2.1 Adapting technical road construction standards to modern heavy vehicle traffic (EU's 11.5t/exle standards).................................................C/19 2.2 Quantifying road deterioration caused by heavy vehicles ........................C/20 2.3 Evaluation of the existing legislation for over-weight vehicles ................C/23 2.4 Protecting a national road network for heavy vehicles .............................C/24 2.5 Cost estimates road improvements due to increased axle loads ...............C/28 3. Increased Motorization and mobility in Poland..............................................C/31 3.1 Goods and passenger vehicles in relation to GDP ....................................C/31 3.2 Traffic volumes..........................................................................................C/32 3.3 Vehicle population.....................................................................................C/37 3.4 Mobility assessment ..................................................................................C/39 4. Internal Road Financing ...................................................................................C/41 4.1 Projected vignette revenues .......................................................................C/41 4.2 Fuel taxes ...................................................................................................C/43 4.3 Vehicle taxation..........................................................................................C/45 4.4 Import and registration fees........................................................................C/47 4.5 Road user charges revenues .......................................................................C/48 4.6 Annual road expenditures...........................................................................C/50 4.7 Channeling the road revenues – budgeting process ...................................C/55 5. External Road Projects and Road Sector Financing .....................................C/59 5.1 Individual projects vs. long term sector approach....................................C/59 5.2 Road corridors vs. road networks.............................................................C/60 5.3 Standard loan conditions of donors ..........................................................C/61 5.4 The EU accessions requirements and assistance program........................C/63 5.5 Private Investments (concessions) in Road Transport .............................C/66 APPENDICES Financing Roads in Poland... Introduction i INTRODUCTION General Objective The study prepared by Andrzej Brzezinski, Wojciech Suchorzewski and Piotr Szagala was intended to serve as a background research for the future World Bank involvement in the Polish road sector. Main Tasks 5 main tasks were executed: (i) Assessment of present and future needs for road investments. (ii) The impact of increased axle load of heavy goods vehicles on the Poland’s road network. (iii) Increased motorization and mobility in Poland. (iv) Internal road financing. (v) External road projects and road sector financing. The work wasdivided into three phases: • the first lasting up to the end of March, and closed by the Inception Report; • the second lasting up to the end of April, and closed by the Interim Report; • the third lasting up to the end of May, and closed by the Final Report. • The report was prepared in the period (from March to May 2002) when different options of financing and restructuring of the road sector were considered by the Polish Government. Some comments and opinion formulated in parts A and B concerned options, which have been later rejected by the Government. New solutions have been proposed. In this situation, in October 2002, parts A and B of the final report were reviewed and comments added in footnotes which are printed in italics. Content of the Final Report The Final Report is composed of 3 main parts: • PART A: containing executive summary of the report, • PART B: containing findings from the study as well as author’s recommendations concerning Polish road sector, • PART C containing a detail report concerning 5 main tasks based on the study Terms of Reference plus annexes with detail tables. Financing Roads in Poland... ii Introduction Data Providers The information and data from the following institutions were collected and used: Name of Organization Abbreviation Address 1 Ministry of Infrastructure MI Warsaw, ul. Chałubinskiego 4/6 2 Ministry of Finance MoF Warsaw, ul. Swietokrzyska 12 3 General Directorate of National GDDP Warsaw, ul. Wspolna 1/3 Roads and Motorways (GDDKiA) 4 Motorway Agency ABiEA Warsaw, ul. Chalubinskiego 4/6 5 Bureau of Road Network Studies BSSD Warsaw, ul. Goledzinowska 10 (former BPRSD) 6 The Motor Transport Institute ITS Warsaw, ul. Jagiellonska 80 7 Main Statistical Office GUS Warsaw, Al. Niepodleglosci 208 8 Research Institute of Roads and IBDiM Warsaw, ul. Jagiellonska 80 Bridges Financing Roads in Poland... EXECUTIVE SUMMARY The study1 was intended to serve as a background research for the future World Bank involvement in the Polish road sector. The report consists of three parts: Executive Summary, Findings and Recommendations (Part B) and Background Report (Part C). The Background Report is composed of 5 chapters. Chapter 1 contains basic characteristics of public road network, with emphasis on ongoing investments, organizational and financial responsibility for each category of roads and identification of bottlenecks in the road sector. In Chapter 2 the impact of increased axle load of heavy goods vehicles (HGVs) on the Poland's road network is discussed. Growth of motorization, mobility and traffic volumes in Poland is dealt with in Chapter 3. Chapter 4 is devoted to internal road financing: projected vignette revenues, fuel and vehicle taxes, road user charges, road expenditures and channeling the road revenues. In Chapter 5 questions of external road projects and the road sector financing are covered, including standard loan conditions, the EU accessions requirements and assistance program and private investments (concessions). The report was prepared in the period (from March to May 2002) when different options of financing and restructuring of the road sector were considered by the Polish Government. Some comments and opinion formulated in parts A and B concerned options, which have been later rejected by the Government. New solutions have been proposed. In this situation, in October 2002, parts A and B of the final report were reviewed and comments added in footnotes (in italics). Roads and their financing - the present state (i) There is 371 thousand km of public roads in Poland, 67% with hard pavement. In 1999, due to state administration reform, the road administration structure has been adjusted to the new 3-tier territorial administrative layout: voivodship (province, region), powiat (county)
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