Government to Boost Road Construction Funding After 'Rzeczpospolita' Report

The Polish government has responded to the pressing concerns of the construction sector by agreeing to raise the revaluation limit for unprofitable road contracts. This move, announced by Deputy Minister of Infrastructure Stanisław Bukowiec, comes after the "Rzeczpospolita" newspaper highlighted the industry's threat of legal action and project stoppages. The war in Ukraine has significantly impacted contract profitability, making these adjustments crucial for ongoing infrastructure development.

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We will provide entities subject to revaluation with annex proposals, and after their agreement, we will try to sign them as quickly as possible.

The revaluation process will initially cover contracts that have long awaited adjustments and have already reached the current 15% threshold. Subsequent steps will address supervision and design work contracts. The General Directorate for National Roads and Motorways (GDDKiA) and the Ministry of Infrastructure are working to finalize and sign these annexes swiftly, with proposals expected to reach contractors in the first half of the year and signings anticipated during the summer and third quarter.

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Public institutions and the construction industry must always seek solutions that, on the one hand, express concern for domestic companies implementing strategic infrastructure investments, and on the other hand, take into account the most favorable possible outcomes from the perspective of the state budget.

Industry representatives, like Damian Kaźmierczak of the Polish Construction Employers' Association (PZPB), welcomed the announcement, emphasizing the need to balance support for domestic firms with fiscal responsibility. However, concerns remain, particularly for the railway sector, which is not included in this additional revaluation, and for the design and supervision segments, which face different revaluation levels. The rising cost of materials, partly influenced by global oil prices, has underscored the urgency of these financial adjustments for the road construction industry.

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This is great news, only a pity it's not for the entire infrastructure investment industry.