Wojciech Kosc in Warsaw -
Claims that Poland's economy stands to get a significant kick from the 2012 Uefa European Football Championship make for pleasing propaganda, but the official view on the event's potential effects looks exaggerated.
Set to co-host one of Europe's most prestigious sporting events with neighbouring Ukraine from June next year, Poland should certainly be able to raise its international profile. At the same time, the event will also offer opportunities across virtually all sectors of the economy - at least according to a report from PL.2012, the company managing the organisation of Euro 2012 in Poland.
Overall, the report claims, the event will drive a GDP gain of 1.4-2.7% spread across 12 years from 2008 to 2020, with the development of transport infrastructure a leading edge which should peak next year. The year following the tournament, the report hopes to see it boost foreign dircet investment inflows by 2.4%, whilst additional revenue from inbound tourism could reach as high as PLN5bn (€1.26bn). The absolute value of the cumulative GDP gain totals PLN18.4-36.6bn in 2009 prices, with the high point in 2012, when an esitmated 820,000 visitors will be spending on transport, accommodation, and numerous other goods and services.
However, Professor Witold Orlowski, chief economic advisor at PricewaterhouseCoopers' Warsaw office, complains that whilst these numbers do a good job in fuelling enthusiasm for the event, they're very hard to verify. "Infrastructure investment would have been happening anyway," he claims. "As for investments carried out strictly for the event, like stadiums, we don't know if the money spent on them wouldn't be better spent on something even more growth-spurring."
In short, "calculating exactly how much extra GDP growth Poland is going to post thanks to Euro 2012 is next to impossible. It's a common misconception to attribute more palpable GDP-influencing factors, like infrastructure developments, to the fact that Poland co-hosts Euro 2012," OrÅowski says. "But their financing had long been decided on at the national and the EU level. The event may have triggered their faster execution, but certainly didn't make them happen."
In other words, many development projects already had their financing agreed with the EU bodies helping to fund them before the right to host Euro 2012 was won, and would have gone forward regardless. Examples include a rail line linking central Warsaw to the Chopin Airport (the first entirely new railway line built in Poland in decades), the recently delivered section of the S8 expressway, which forms part of the ring-road system around the capital, and the expansion and modernisation of the airport terminal at WrocÅaw.
Orlowski suggests some of the biggest potential gains are less tangible even than those hard-to-measure GDP gains, with the country's global profile across the globe top of the list. "Just like Barcelona after the 1992 Olympic Games, Poland has a chance to establish itself very firmly on the world's tourism and business agenda," he says.
Of course, every opportunity has the potential to transform into a crisis, meaning any major problems around the championships could damage Poland's reputation. Whilst PLN80bn is being invested into the country's infrastructure, some key sections are still at risk.
The highest profile example currently is the A2 motorway linking Warsaw to Lodz and on to Germany, which saw the (cut price) contract with Chinese road builder Covec pulled on June 13, after a standoff lasting a matter of weeks. It's tempting to assume that without the pressure of Euro 2012, Poland's roads agency may not have moved quite so quickly to tear up a contract offering it a discount of close to 50% on the amount it expected to pay in the original tender and find a new contractor.
In contrast, the tournament didn't manage to light a fire under Polish State Railways, which only agreed terms with Slovak development company HB Reavis to renovate Warsaw West - one of three key railway stations in the Polish capital - on June 16; much too late for the station to be of use for the expected passenger influx next summer.
The legacy headache
As with any global sporting event, however, at city level it's the sporting arenas and their legacy that could cause the most headaches. The PLN1.2bn National Stadium in Warsaw is already running into problems, and has seen construction and electric installation design issues set back its delivery date from June to the end of November, which has seen several pre-Euro 2012 events cancelled. The specially built stadium in Gdansk is in a similar situation.
Orlowski says the mayors of host cities - Warsaw, Gdansk, Poznan and Wroclaw - are going to face a period immediately after Euro 2012 during which the costly venues will weigh on their budgets rather than bringing in cash. "Unfortunately, little has been done to develop the stadiums so that they are not just stadiums, but also elements of more complex business and commercial developments," he points out. "The complementary functions will, of course, arrive over time, but before it happens, the stadiums could be loss-makers."
That will leave the state and local governments covering the shortfalls from the taxpayers' purse, and could have a long-term negative impact on the local economy.
Poland's host cities wouldn't be the first - the debate over the legacy of stadiums built for global sporting events appears to grow longer each and every year. As KPMG noted in a study on the 2010 Vancouver Winter Olympics: "These [events] project grow ever more vast - with expectations of what will be delivered being ramped up every time as each organizer tries to out-perform their predecessor - there may yet come a tipping point at which even the accelerated delivery of shiny new infrastructure assets is not worth the enormous investment of time and money."
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