Moody's: Update of Poland's road building programme is credit positive

By bne IntelliNews June 12, 2013

Moody's Investors Service has commented on the Polish government's last week decision to approve a number of road building projects and said that the move is credit positive for the sovereign rating (A2 stable).

The agency expects that around 50 projects will be opened to a tender process worth a government-estimated PLN35.7bn (2.2% of GDP) and will be financed from European Union (EU, Aaa negative) funds and the National Road Fund (KFD). The progress on allocating these infrastructure projects will hasten their construction and will provide a boost to the slowing economy, which is a credit positive.

Quick progress towards implementing infrastructure investment programmes will have a positive effect on the economy as the multiplier effect of this type of expenditure tends to be strong. Therefore, we believe that over the life of the program, and if completed on a timely basis, these road projects are likely to boost real GDP growth by 0.1-0.2pps on an annual average, Moody's stressed.

The government updated its 2011-2015 road construction programme, so that total outlays on fast-track road construction will amount to PLN 35.73bn (EUR 8.4bn) by 2015.

In 2007-2012, a total of nearly 2,500 km of fast-track roads (express roads and motorways) was delivered, with another 775km now under construction. Until this year, a total of PLN 83.8bn was spent on these projects.

 

Related Articles

European Parliament calls for use of “nuclear option” against Poland

The European Parliament adopted a resolution on November 15 calling on the EU Council to launch the so-called “nuclear option” against Poland to punish Warsaw for its alleged abuse of the ... more

EU calls for tax haven blacklist in Paradise Papers fallout

The finance ministers of the European Union member states have called for the creation of a blacklist of tax havens to crack down on tax dodging, the ministers said at a meeting in Brussels on ... more

One-off events drive Warsaw Stock Exchange operator's profit to record high

GPW, the operator of the Warsaw Stock exchange, posted a net profit of PLN47mn (€11.1mn) in the third quarter, representing an annual growth of 18.9% y/y, the company said on October 31. The ... more

Dismiss