Major Investments in the Polish Railway Sector

Although Poland has the fourth-largest railway network in Europe, it has long been underfinanced and neglected. The railway sector is currently experiencing the largest investment program in Polish history. These projects present promising business opportunities for Swiss exporters.

Major Investments in the Polish Railway Sector
Major Investments in the Polish Railway Sector

The economic importance of Poland's railways has been increasing in recent times. In 2017, the Polish railway company PKP transported around 304 million passengers on its trains, an increase of 4% over the previous year. Rail freight transport has also been growing – in 2017 it experienced an 8% increase to reach 240 million tons. There is also a large growth potential to be observed in intermodal transport, which at 6% has a relatively low share of rail transport compared to Western European countries. In 2017, around 15 million tons of intermodal freight were transported by rail, an increase of 15% compared to 2016.

The state-owned company PKP Polskie Linie Kolejowe (PKP PLK) currently manages about 27 thousand km of track. The increasein both passengers and freight transportation, combined with underfinancing and infrastructure neglect have created a huge backlog in demand. For this reason, large investments are now being made in the railway sector through investment programs. These programs represent the largest investments in the history of Polish railways.

Polish Railway Program

Investments in the rail sector have several financing sources. The primary source is the Polish Railway Program, which plans to allocate over 66 billion zlotys (around 19 billion Swiss francs) by 2023. EU funding accounts for 60% of the total sum.

Projects with a total volume of 31 billion zlotys (8.6 billion Swiss francs) are currently underway. Projects worth 6 billion zlotys (1.7 billion Swiss francs) have already been completed, and projects worth a total of 8 billion zlotys (2.2 billion Swiss francs) are currently in the tendering phase (status: May 2018)

The investment programs include plans to modernize 9,000 km of tracks, 8,500 km of which are to be designed for high-speed trains. The expenditures also include new construction and modernization of existing infrastructural facilities: bridges, overpasses, tunnels and switches. Local control centers with modern IT systems and equipment are intended to enable faster and safer transport. Investment in railway infrastructure is expected to contribute to the development of intermodal transport in Poland. This would improve the rail accessibility from the ports in Gdansk, Gdynia, Szczecin and Swinoujscie.

PKP-PLK's interactive map displays which routes and facilities are currently being constructed or modernized and which are in planning:

Current tenders are published in Polish on the special PKP PLK platform: Tenders for construction projects exceeding 5,548 million euros will also be published in a supplement to the Official Journal of the European Union – TED .

The biggest challenge for suppliers in the award procedure is the issue of price. In the past, price was the only thing that played a role in public tenders. The law has since been amended, and now allows for the inclusion of other criteria.

Price remains an important factor in current public tenders in the railway sector, with a weighting of around 60%; however, other criteria such as delivery reliability and experience are also evaluated.

Train stations and stops

By the end of 2023, PKP plans to modernize or construct around 200 train stations for a total of 1.5 billion zlotys (420 million Swiss francs). The stations are located not only in large cities, but in smaller towns as well. The work includes both the station interiors and their surroundings.

At present there are 160 projects underway, the majority of which are in the preparatory phase, i.e. before the tender procedures for project work and construction begin. Measures to increase passenger comfort include a modern information and security system as well as integration with urban public transport. Accessibility for people with disabilities is another factor – special elevators, ramps and signs are intended to significantly improve ease of travel.

Rail vehicles

The modernized rail networks are to feature modern trains as well. For this reason, PKP Intercity's largest investment program is in the area of rail vehicles, the value of which is estimated at approximately 7 billion zlotys (2 billion Swiss francs). The program comprises the procurement of 185 new wagons and the modernization of 700 existing ones, the procurement of 19 new trainsets and the modernization of 14 existing ones, as well as the procurement of 118 new electric and diesel locomotives and the modernization of around 200 existing ones.

Regional railway companies are investing in rail vehicles as well. Last year, Koleje Mazowieckie (Masovian Railways) published tenders for 71 trains in the Warsaw region. The contract, worth 2.2 billion zlotys (610 million Swiss francs), is the largest contract in the history of regional railways. The tender was won by Stadler Rail, which has been operating a production plant in eastern Poland for 10 years with over 700 employees. The contract was signed in January 2018. It is worth noting that Stadler Rail's price was slightly higher than that of the other suppliers, but a total of 15 criteria were evaluated in the tender procedure, and price had a weighting of 50%.

In addition to Stadler Rail, Alstom and Bombardier also have manufacturing operations in Poland. The Polish rail vehicle manufacturers are Cegielski, Newag and PESA.

During the Katowice Economic Summit in May 2018, PKP President Krzysztof Maminski announced that 2023 was not an end to investment, but rather the beginning of a new stage. PKP is already working on preparations for the new wave of investment after 2023.

Would you like to know how your business could profit from these exciting projects?  Contact our consultant Katalin Dreher Now!


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