September 17, 2019

September 16, 2019

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Poland’s Ruling Party Favors Constructing New Mega-Airport

The leader of Poland’s ruling party PiS, Jarosław Kaczyński, has come out strongly in favor of construction of a new mega-airport outside of Warsaw.

The new mega-airport proposal was initially vetted as part of Poland’s plan for constructive development, announced by the Law & Justice Party when it won Poland’s parliamentary elections and gained control of Parliament a year and half ago.

Airport, ConstructionDespite strong support for the project by the management of LOT Polish Airlines, the proposal has been subject to much discussion and criticism as being uneconomic, too expensive and a waste of resources already invested in the two Warsaw airports, Chopin Okęcie and Modlin.

However, Mr. Kaczyński, when asked last week whether he supported the construction of a new regional airport in Podlaskie east of Warsaw, stated that he supported construction “of a major, international, global airport somewhere close to Warsaw. We cannot accept the fact that we are the only country in which the airports are the beginning of the road to other major airports.” He stressed that the airports in Vienna and Prague have a much larger network of connections than the largest airport in Poland, and that Poland is “a big European country, and we must strive to ensure that the country be in the whole sense of the word.”

The Central Airport (Centralny Port Lotniczy or CPL), as the project is called, is referred to in Poland’s Strategy for Responsible Development adopted by the Council of Ministers on February 14. The strategy calls for conducting detailed studies regarding CPL and deciding whether to proceed by the year 2020, all as part of a program to integrate various means of transport to promote Poland’s development. Currently, all of Poland’s airports serve a little over 30 million passengers a year. CPL alone would provide capacity for at least this number of passengers and preliminarily, would be designed for 50-60 million passengers. The proposed location that has been mooted is west of Warsaw on the way to Lodz, near the A2 motorway and along a high-speed rail line to be built between Warsaw and Lodz. The capacity of Warsaw’s Chopin Airport is expected to be reached relatively soon, and further development is troublesome, as it is located inside the capital city.

Given the immense cost of the project (estimates range from PLN 30 billion to 50 billion (approximately US$12.5 billion), financing will be a key driver. The European Commission closely monitors airport projects to ensure compliance with State aid rules (see the Guidelines at 2014/C99/03), and large airports must meet the private investor test. Because of the existing number of large hub airports in continental Europe, whether CPL could attract sufficient private investment is a key question. Obtaining support from EU funds is uncertain and financing from Chinese sources has been discussed. When Poland’s Foreign Minister visited China, he received offers to support the CPL project, and Chinese investment in Polish infrastructure was discussed during the visit of President Xi Jinping to Warsaw.

Given the strong support for CPL from Poland’s governing party, the inclusion in the Development Strategy of further work on CPL, and the interest of leading Chinese entities in CPL, we expect further developments soon.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Peter Swiecicki, Warsaw, Squire Patton Boggs, Infrastructure Financing Lawyer, Privatization Matters Attorney
Partner

Peter Swiecicki is the Managing Partner of our Warsaw office and his practice includes some of the largest infrastructure financings and privatizations in Central and Eastern Europe. His experience includes financings of the largest and most complex toll motorway project in Poland, as well as the main gas pipeline and the tallest office building in Central Europe.

Peter has served as an advisor to the Government of Kuwait on PPP projects, and advised on the financing of the Żywiec Hospital PPP project.

He has...

48 22 395 55 08
Igor G. Hanas International Investment Lawyer Squire Patton Boggs Warsaw
Senior Associate

Igor Hanas’ practice focuses on the energy and industrial construction sectors, and infrastructure projects, including the PPP model. Igor advises foreign and domestic investors, general contractors and service providers on all aspects of turnkey projects, starting from procurement and negotiations, through financing, performance, corporate and contractual issues and cross border technology import to handover of the investment.

Igor advises clients in regulatory matters including license (concession) issues in relation energy, chemical and natural resources sectors.

Additionally, Igor advises clients in the energy sector with respect to PPA and CPA, O&M agreements and other commercial contracts related to day-to-day operations.

He also represents clients before public administration authorities, common courts and the National Appeal Chamber in projects of the above-listed types.

Prior to joining the firm, Igor was an associate at the Warsaw office of an international law firm for a number of years and worked at a financial institution which is part of an international financial group.

Experience

  • Representing a global energy engineering construction firm in public procurement proceedings, negotiations with investors concerning the construction of a new power station of a capacity of 1,000 MW in Elektrownia Ostrołęka S.A. worth US$1.7 billion.

  • Representing a global energy engineering construction firm in public procurement proceedings, negotiations with investors, including representation before the National Appeal Chamber and district courts, concerning the construction of two new power stations of a capacity of 1,000 MW and 910 MW respectively, worth US$1.7 billion and US$1.3 billion, respectively and a combined cycle power plant in Warsaw Żerań (PGNiG Termika project) worth US$700 million.

  • Advising European and Asian EPC companies applying to the Polish Stage Grid for a public bid in Poland to design and construct high voltage electricity transmission lines and transformers, including the Poland - Lithuania energy bridge.

  • Advising international group of EPC contractors (Energy Service and Water Process Divisions) in turnkey retrofit/modernization/fuel conversion projects in Polish energy groups: PGE Energy Group, Tauron Energy Group, Energa Energy Group, ZE PAK Group, Dalkia and EDF. Legal assistance at all stages of proceedings: from public procurement and private proceedings stage, through performance of the project, cross border matters and technology transfer until the handover of the investments.

  • Negotiating commercial contracts for global chemical company subsidiaries operating in Poland with the oil & refinery industry and the copper mining industry.

48-22-395-5537