NIK: building the Central Communication Port does not make sense

– Currently the largest government investment in Poland, i.e. the construction of the Central Communication Port (CPK), is delayed at the start. The Supreme Audit Office indicates that at this pace of work, the completion of the airport construction by the end of 2027 is at risk. In addition, it is still not known exactly how much the CPK will cost, or where the money for this project will come from – says Marian Banaś, president of the Supreme Audit Office, in the post-audit speech.

The Supreme Audit Office, which covered the years 2017-2020, showed that the delay investment had already been caught at the start, and “the CTH implementation schedule was general and indicated impossible deadlines for the implementation of individual tasks.”

For example, it was assumed that a special act would enter into force by the end of 2017, i.e. less than two months after the adoption of the STH Concept, and the development of the Multiannual Program was to take place within five months of the adoption of the STH Concept. However, this did not happen.

Although the work on the draft of the multi-annual program was initiated in the CPK sp. Z oo immediately after its creation (the company was established in November 2018), consultations and changes to the project, caused by numerous reservations of the Ministry of Finance and the Center for Strategic Analyzes, lasted until October 2020. (the document was adopted by the Council of Ministers on October 28, 2020).

As a result of the unreliable planning of the preparatory stage in the CTH Concept, individual tasks were completed with a delay – up to 2.5 years – in relation to the adopted assumptions – we read in the NIK report (the entire document from the inspection in the CPK is available at the bottom of this article).

See how the preparation for the construction of the CPK was assessed by the president of the Supreme Audit Office:

– In the opinion of the Supreme Audit Office, it is necessary to immediately conduct a thorough analysis of costs and benefits, both economic and social, to be brought by the construction of the largest airport in our country. Especially in a situation of a breakdown on the passenger flights market due to a pandemic – the president of the Chamber, Marian Banaś, commented on its results.

– Where are the traffic forecasts for individual sections of new railway lines that are to form spokes? At press conferences, you only communicated the total values ​​for the entire railway network for the CPK. Details were provided only for the Warsaw-CPK section. It is similar with the new forecasts for air traffic, which Minister Horała does not want to show – said Franciszek Sterczewski, MP from the Civic Coalition.

How did Marcin Horała, deputy minister of infrastructure, government plenipotentiary for the CPK respond to these allegations?

– We have to average some experts’ conclusions. We have ordered another IATA report. We already have it, but due to the agreement with IATA, we are not going to publish it yet. On this basis, the fourth update of the business plan will be created and the next private investor test will be carried out. All the previous ones indicate the high profitability of this undertaking, he assured at the meeting of the Committee.

NIK accuses the CPK and the government plenipotentiary for its construction with a high probability of not completing the construction within the deadline set in the Concept, i.e. by 2027.

In the published statement, the company believes that such a thesis is unfounded:

“CPK hired a strategic advisor, master planner, buys real estate, has financing secured, has obtained initial investor declarations from South Korea, a master architect is selected, we have started a tender for construction and preparatory works, we conduct field, environmental, geological, geodetic and cartographic research, meteorological, we have published the initial preferred location of the port, this year we will submit an application for an environmental decision. And these are just a few of the projects that make the completion of construction in 2027 possible and will be implemented, “we read.

– It’s good that this advancement is the way it is. Very good, because we haven’t managed to spoil too much yet. It is not necessary, as in the case of the power plant under construction in Ostrołęka, to demolish the investment in progress – said Stefan Krajewski, MP from the Polish-PSL Coalition during the Infrastructure Committee.

How much will the megalotel airport cost?

In the report, NIK also dealt with the costs of the entire investment and an attempt to assess the transparency of the process of estimating them in the future.

The special purpose vehicle established on the basis of the CPK Act was provided with funds in the amount of PLN 310 million. This allows the functioning and implementation of statutory tasks.

And as we read in the report, which was also quoted by the representatives of STH during the session of the Infrastructure Committee: “Poniesione przez CPK Sp. z o. o. the expenses were in line with the adopted, updated financial plan and did not exceed the level which – in the opinion of the Supreme Audit Office – was adequate to the scale and scope of operations ”.

The situation is different when it comes to the assessment of financing the construction of the STH itself.

Funds for financing the implementation of the statutory tasks of the STH. by the end of 2023, were specified in the Multiannual Program at the level of PLN 9.23 billion. They are to come from the issue of Treasury securities and are to be contributed by the State Treasury to increase the share capital of the CPK company.

The NIK indicates in the report that as part of the preparation for the construction of the CTH, no feasibility study has been prepared for the entire CTH Program, which would define the conditions for its implementation necessary to achieve the assumed goals, and a comprehensive financial plan for the full investment period.

“In short, until the end of the inspection, it was not known what the financing sources would be for all projects related to the construction of the Central Communication Port. The multi-annual program covers only the years 2020-2023. So far, all the tasks carried out have had their financial resources secured. Similarly, until 2023, funds are provided for the implementation of the preparatory stage. Long-term debt financing is planned from 2023. And this requires a precise definition of the investment needs and negotiation of the terms of this type of financing, “wrote the auditors in the report on the Central Communication Port.

CPK as part of the European puzzle

In its report, NIK also indicated the impact of the pandemic on the shape of the aviation market and the need to take it into account in the plans to build this airport.

The auditors indicated that due to the COVID-19 epidemic, LOT Polish Airlines prepared an update of the passenger forecast, based on the assumption that all activities aimed at expanding the infrastructure of the Okęcie airport were suspended and all operations were transferred to STH in the fourth quarter of 2027.

“The national carrier has lowered the forecast for the development of passenger traffic by 34 percent. Planned transport of PLL LOT on routes to / from Warsaw assumed the transport of: in 2027 – 12.7 million passengers, in 2028 – 14.5 million, in 2029 – 16.6 million, and in 2030 – 19 . 2 million passengers. This means that, according to these forecasts, air traffic from Warsaw will recover for a long time after the pandemic, ”NIK officials analyze in the report.

According to the forecasts of the European Organization for the Safety of Air Navigation (EUROCONTROL) and the International Air Transport Association (IATA), the probable date of achieving the results of 2019 is 2024. All these forecasts were made before the 4th and 5th wave of the coronavirus pandemic.

The air component profitability analysis indicates that passenger traffic at the level of 24.3 million passengers in 2030 is a critical value for the STH project.

– The NIK report states that 23.5 million passengers is the break-even point of the CPK airport. I sincerely wish every business venture that in the first year of its operation it will be profitable and profitable. In this case, we are building for generations – Marcin Horała, Deputy Minister of Infrastructure, responds to the allegation formulated in this way by NIK-U.

The government’s plenipotentiary for CTH added during the parliamentary commission that the proof that CTH made sense is the recent addition by the European Commission of the Central Communication Port to the core network of the European TEN-T network.

The full text of the Supreme Audit Office’s report on the CPK below:

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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