Poles apart from Ukraine

By bne IntelliNews May 28, 2012

Jan Cienski in Warsaw -

When the Greek and Polish teams kick off the 2012 European football championships in Warsaw's new national stadium on June 8, millions of fans will be cheering - but the bean counters will be even happier when they consider the tournament's economic impact.

The actual earnings of the tournament will not be that large after Uefa, the body in charge of European football, takes its cut - but the much bigger impact will come from the rush to build infrastructure in time to host fans from across the continent. "Euro 2012 has been a very concrete motivator for development," says Marcin Herra, CEO of PL.2012, the government body in charge of organising the Polish half of the championships (the other co-host is Ukraine).

Organisers estimate that Poland will bear PLN150m-200m (€35m-47m) in extra costs because of the tournament for things like building fan areas and hiring more security, but that additional revenues - in part from the up to 1m extra tourists coming for the championships - will come to about PLN600m. But that is small change compared with the longer-term benefits.

The entire budget for key facilities tied to the tournament comes to PLN95bn, although only PLN4.5bn of that went for the four stadiums - in Warsaw, Gdansk, Poznan and Wroclaw - where the matches will be played. The rest, which includes funding from the EU, went mostly on projects like modernising airport terminals in the four host cities, improving local transport such as trams, buses and local rail, as well as ambitious plans to upgrade Poland's woeful road and rail infrastructure. Those are projects that would have happened anyway, but whose timing has been dramatically speeded up by the fast-approaching deadline of the championships.

Herra estimates that Poland will get a boost to its GDP of PLN18bn-30bn from 2012 to 2020 because of the faster completion of infrastructure projects. "We are doing these investments three to five years more quickly than we would have without the Euro [2012]," he says.

Successes and failures

The most successful projects were the stadiums, all of which have been completed on time. The government hopes that they will become self-sustaining after the championships - unlike those in Portugal, which hosted the tournament in 2004 - by holding conventions, sports events and concerts, and with offices and restaurants integrated into the facilities that are supposed to earn year-round cash. "They've been planned in such a way that they will generate revenues," says Herra.

The airports, the route by which most fans will get to Poland, have also been completed on time, and the four cities hope they will provide a long-term boost to tourist and business traffic. Herra estimates an increase in tourist spending of about PLN3bn-4bn over the next four years.

The biggest failure comes in the ambitious road and rail projects, which were supposed to transform Poland's links to the rest of Europe and which accounted for about 60% of the Euro 2012 budget. In 2008, the government announced that it planned to build 900 kilometres of highways and 2,100 km of slightly lower-grade expressways. None of those projects have been completed.

The A1, the main north-south highway that is to run from Gdansk on the Baltic coast to the Czech border, has a big gap in the middle that will take years to finish. The A2, joining Warsaw to the German border, also may not be finished, although hundreds of workers are on site 24 hours a day as a frantic Slawomir Nowak, the infrastructure minister, pushes the construction companies to at least have the road drivable if not formally completed by early June. "I'm afraid we may not win this race against time," he said while visiting the site.

The A4 highway linking southern Poland to Ukraine will also have gaps as it approaches the border. Of the express roads, only 739 km have been completed, and none of the segments encompasses a complete route.

There have also been problems with trains. Rail travel from Warsaw to Gdansk was supposed to take three hours after a renovation of the tracks that have played havoc with schedules for years. However, the work is unfinished and the journey takes almost five hours.

The delays have led to a shift in government rhetoric. Nowak now says, "We aren't building for the Euro [2012], we're building for Poland" - which, from the point of view of investors who will soon be flying into new airports and speeding down modern highways within the next year or two, is true. But not, alas, for the football fans.

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