Investments from the Polish Deal are to be credited by… contractors. OIGD: It threatens with bankruptcy

The value of all investments to be implemented under the first tranche of the Polish Deal – Strategic Investments Program is PLN 23 billion. A similar amount is foreseen under the second call. Planned projects will be mostly implemented by small and medium-sized companies. The problem is that entrepreneurs are to finance these tasks at the same time. Procedures provided for in the government’s resolution may result in bankruptcy of companies.

The Polish Chamber of Commerce for Road Engineering draws attention to the problem. Although this was probably not the intention of the government, in practice smaller entrepreneurs, including road companies, instead of strengthening their condition thanks to an additional pool of orders, may significantly worsen it, and in extreme cases even go bankrupt.

All through the provisions of the government resolution of July last year. According to it, contractors are obliged to finance the tasks for which the contracting authority received the initial promise. – In practice, this will mean that entrepreneurs will carry out investments from their own resources, and they will get the payment only when the contracting authority settles accounts with Bank Gospodarstwa Krajowego – says Barbara Dzieciuchowicz, president of the Polish Chamber of Commerce for Road Construction.

He points out that the majority of small domestic enterprises do not have the accumulated funds that would allow them to finance investments for an indefinite period of time. Companies also do not have unlimited access to external sources of financing. Additionally, according to the government resolution, tenders for the implementation of tasks financed from the government program are to be announced within 6 months of obtaining the initial promise. This means that all investments will hit the market at the same time. – The available working capital loan limits for entrepreneurs, in particular from the small and medium-sized enterprises sector, will not provide financing for multi-million investments, and certainly for several investments carried out simultaneously – points out the OIGD.

Such rules mean that many small and medium-sized enterprises will be deprived of access to public procurement. Meanwhile, we are talking about companies that obtain most of their revenues from the construction of municipal, poviat or city roads, and these will be implemented in the near future primarily as part of the Polish Deal. For some small companies, this means the specter of bankruptcy – warns the Chamber of Roads.

In a sense, the provisions of the resolution transfer to contractors the risk related to obtaining funds from the program, while they do not affect, for example, the correct and timely submission of the relevant documents.

– In an extreme situation, it may happen that the contracting authority that has obtained the promise will breach the provisions of the resolution and will not receive the money. Then the contractor will not be able to pay, and the task will be completed – says Barbara Dzieciuchowicz. Subcontractors will be affected by payment problems.

The President of OIGD points out that the provisions of the government resolution are in conflict with the Public Procurement Law, for example with regard to advance payments. The Public Procurement Law obliges to pay them out in the case of contracts concluded for a period longer than 12 months, and the government resolution accepts this right directly, ordering the payment of remuneration after completion of the investment. The same goes for partial payments to contractors.

The Chamber asked the Prime Minister to change the rules of disbursement of funds from the Polish Deal. The organization calls for local governments to receive specific amounts each month on a dedicated account that could be used for advance payments or partial payments to contractors. – The first edition was worth PLN 23 billion, of which around PLN 11 billion were road investments. The same is foreseen in the second tranche. It is difficult for such funds to exist among small companies operating locally – says Barbara Dzieciuchowicz. – Contractors cannot be required to credit local government units, especially since we all know the possibilities of obtaining funds by small and medium-sized enterprises – adds the president of OIGD.

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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