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Brit Biz is pleased to be working with UK Trade & Investment to create business opportunity and growth. For more detailed business enquiries on doing business in Poland please contact Martin Oxley, Country Head UK Trade & Investment, Poland firstname.lastname@example.org
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Poland does not manufacture specialist water sector equipment and there are therefore opportunities for UK manufactures to sell specialist goods and equipment in Poland. This is helped by the relative geographical proximity of Poland, the favourable climate for UK goods and the fact that English is becoming Poland’s second language. Examples include monitoring and measuring equipment and sludge treatment equipment.
There are also openings for providers of specialist services, particularly those relating to pipeline rehabilitation and no-dig technologies. The Commercial Section of the British Embassy in Warsaw has good contacts with potential Polish distributors and give advice to manufacturers under the OMIS scheme.
The high level of project implementation will continue, stimulated by the availability of EU grant funding. This will generate opportunities on the project preparation and design and to act as “engineer”. This particularly applies to those UK consultants established in Poland. Those consultants not already involved in the water sector are encouraged to enter this market.
The possibility of opportunities for water sector developers/operators has arisen again, although it is suggested that this might in the immediate future yield better opportunities for consultants to help develop “bankable” projects. Operators and developers may like to stay in touch with progress.
The Water Market in Poland
Water and Wastewater Sector in Poland
Total Water Consumption – 10,3566.5 hm3
Consumption of water for production purposes – 7,523 hm3
Water network – 273,000 km (6,000 km built in 2010)
78% of water network is located in rural area
901 cities have water network with 95.5% of population connected to it
Density of water network (on 100 km2) – from 42.2 km (Zachodnipomorskie) up to 160.4 km (Slaskie)
Usage of water per capita - from 22.3 m3 (Podkarpackie) up to 36.1 m3 (Mazowieckie)
Waste water network – 108,000 km (7,000 km built in 2010)
Total wastewater output – 9216.8 hm3 (Industrial – 7919 hm3)
Wastewater requiring treatment - 2309,4 hm3
Treated – 2133.7
Untreated - 175.7
Municipal wastewater treatment plants – 3,196
Servicing cities - 855
Servicing villages – 2,341
898 cities are served by sewerage system with discharged
wastewater of 1297,8 hm3
The number of waste water collectors not connected to the waste water network – 2.4 millions (2010)
Joined price of water and waste water (per m3 in 2011) – from PLN 9.23 up to PLN 44.89
• Euro 20bn worth of investment is needed to bring Poland's water and wastewater management into line with EU environmental standards. The EU has allocated Euro 6bn for 2007-2013 for this purpose. It is not known yet how much funds will be allocated for 2014-2020 period.
• Poland has been implementing the Polish national programme of urban waste water treatment (KPOSK). Until 2011 122 new waste water treatment plants have been built and 680 plants have been modernised. It is expected that by 2015 58 new plants will be built and 156 plants will be modernised. As a result of this programme about 28.7 million people will have be connected to the waste water treatment systems (nearly 100% of town population and 60% of village population). The whole cost of the programme will be £ 6.5 billion.
• Given the massive investment needed, and that less than 1% of water utilities are in private hands, central government and municipalities have begun to analyse and prepare water companies for privatisation.
• It is estimated that around € 1.0 billion will be allocated each year on environmental projects the majority of which will be for: improvement of surface water quality, improvement of drinking water quality, water distribution and sewerage systems and flood control systems.
• The sector offers considerable opportunities for British water companies, contractors, consultant engineers, manufacturers and suppliers of specialist machinery, equipment and materials.
• Poland has a per capita freshwater resource of only 40% of the European average.
• EU directives were transposed into Polish law through the adoption of the 2001 Water Act.
• The 2001 Act established 7 (seven) Regional Boards for Water Management (RZGW) under the Ministry of Environment, which are responsible for issuing water management plans and setting conditions for the use of river catchment basins.
• The National Fund for Environmental Protection and Water Management provides funding for water and wastewater utilities (and acts as implementing agency for EU Cohesion & Structural Funds) and considers the requirements of the Urban Waste Water Treatment Directive to be of the utmost importance.
• Roughly 2,655 water and wastewater utilities serve cities and towns.
87.6% are municipally owned and operated, and 6.9% are state owned and operated.
• Privatisation is still being actively considered – the Polish Treasury has prepared a list of approx 100 municipal entities for privatisation.
• Four concession contracts have been awarded private companies: SAUR Neptun Gdansk; AQUA Bielsko-Biala; PWiK Tarnowskie Gory and PWiK Dabrowa Gornicza.
• The water service delivery structure is decentralised with decision makers at the municipal level.
• There are 3 tiers of local govt.: Voivodships (county or province, there are 16), poviats (districts, there are 380) and gminas (municipalities, there are 2,489).
• A Private-Public Partnership Act has come into force in 2005 and typical investments to be carried out under the Act include water and wastewater systems.
The Government's top priorities are to improve the quality of drinking and bathing water, and to increase the number of waste water treatment plants. Major expenditures for water management infrastructure are necessary to ensure that water supply and wastewater related infrastructure comply with European directives. The Local Self-Government Act of 1990 transferred responsibility for water and wastewater services to municipalities.
Along with the transfer of assets and the freedom to reorganise institutional structures, water and wastewater enterprises have also acquired the responsibility for improving and expanding services, and, as traditional central government subsidies have been eliminated, raising the necessary funding for capital investments as well as meeting maintenance and operating costs. These reforms have provoked a significant demand for water companies, contractors, consultants, manufacturers and suppliers of specialist machinery, equipment and materials, which are not available locally.
Poland's ground water resources comprise an annual supply of 1,600 cubic meters per capita. Currently, only 6% of the average water runoff is collected in approximately 140 reservoir basins with a capacity exceeding 1million cubic meters. However the situation is generally improving. Water consumption has decreased by 22.5% in the last ten years, water quality has improved, and the amount of treated wastewater has increased by 77.6%.
Water supply systems are connected to 97.6% of all households in Poland. Almost 100% of Poland's urban population uses common water supplies while only 55% of the rural population has access to water supply systems. The key water management regulation in the European Union and in Poland stems largely from the following Directives:
• EU Water Framework Directive 2000/60/EU from October 23, 2000 and the Polish Water Law issued on July 18, 2001
• EU Directive 80/778/EU from July 15, 1980 and Ministry of Health Regulation on Requirements Concerning Quality of Water Meant as Drinking Water issued on November 19, 2002.
There are many tasks related to water management to be undertaken and continued in Poland. Works related to the construction of water reservoirs and water flow control devices in the basin of the Vistula and Odra rivers are ongoing. In order to improve ground water resources, the state plans to develop a network of small reservoirs to postpone water runoff to the Baltic Sea. In terms of total water production, 44% of treated water volume originates from surface water intakes and 56% from underground intakes. While comparing the number of water treatment facilities, 87% treat underground water and only 13% treat surface water. Surface water treatment technology in Poland is characterized by two and three point application of chemical oxidation, mainly ozone treatment that appears in alternating sequence with coagulation, adsorption, rapid filtration and biological filtration processes.
Poland is the largest country in Central and Eastern Europe in terms of population. Poland has made important progress since the early 1990s in tackling its environmental issues. There are a number of opportunities available for both equipment suppliers and service providers. Polish municipalities are looking to foreign companies to help with their water and wastewater supply and treatment.
Poland has developed one of the most sophisticated approaches to national environmental management in Central and Eastern Europe and has set a target for 100% coverage of water and wastewater supply and treatment by 2015, creating a demand for expert consultants, direct investment, technical management, design engineers, design and construction, and equipment and materials, including:
• Systems and equipment for water conditioning
• Technologies of water conditioning and sewage treatment
• Sewage treatment plants
• Measuring equipment for water conditioning plants, sewage treatment plants
• Technique of measurement, control and analyses
• Water and sewage meters
• Machines and appliances for building, repairing and maintenance of water supply and sewage network
• Hydraulic units, pumps and plumbing fittings
• Regeneration of water supply and sewage network and deep wells
• Modern technologies of renovation of water supply and sewage systems
• Pipes, fittings and wells for building water supply and sewage systems
• Specialized vehicles
• Security and rescue equipment
• Software for water supply and sewage systems companies, for management of economy and technical infrastructure
The Local Self-Government Act of 1990 transferred responsibility for water and wastewater services to municipalities (gminas). The larger municipalities have established autonomous but wholly-owned Municipal Water Companies that have responsibility for all operational matters. They work closely with Municipal governments on the development of new investment projects. A recent development has been the establishment in some municipalities of municipally-owned Water Infrastructure Owning Companies. These companies were primarily set up to avoid VAT on EU funded projects, but they are also able to raise finance (for example for the counterpart funding that is required to EU funding) at more beneficial rates than the municipality and are also developing skills in preparing and managing projects and (see below) in managing private water operators.
The Water Companies in the larger towns are becoming more commercially oriented and are developing commercial skills as well as their traditional technical skills. This has resulted in a greater willingness to adopt innovative ideas and products including those that come from outside Poland. The major obstacle to increasing economy and efficiency is the inability to increase their customer base. The more go-ahead Water Companies are marketing their services to neighbouring smaller municipalities.
Polish law provides a framework (and formula) for the setting of water tariffs and proposals for tariff changes are made annually by the Water Company to the Municipal President (Mayor). These are then checked to ensure that they are in accordance with the law before being passed to the City Council for approval. Finally the proposed tariffs are checked by the Provincial Governor (who is a representative of the central Government).
The major territorial division in Poland is the Voivodship (or Province). Since 1999 there have been the following sixteen Voivodships.
Each Voivodship has an Inspectorate of Environmental Protection that broadly carries out activities under the following three headings:
• Monitoring environmental status and trends.
• Inspection and control of compliance with legal standards.
• Providing laboratory services to assist with the above (and for outside entities).
There are seven Regional Water Management Bureaux (RZGW) in Poland. They are located in Szczecin, Gdansk, Poznan, Warsaw, Krakow, Gliwice and Wroclaw. The Regional Bureaux report to a National Water Management Bureau in Warsaw. There are 2 main river basins in Poland, in the east the Odra (Oder) and in the west the Wisla (Vistula). Small parts of Poland are in 8 other trans-national river basins.
The key responsibilities of the RZGWs essentially combine their traditional responsibilities for the management of waterways with new responsibilities under the Water Framework Directive. Responsibilities that may be of some significance to UK companies interested in the water sector in Poland are:
• Acting as owner of inland surface waterways.
• Maintenance of river beds and hydraulic structures.
• Implementing investment in flood protection and hydraulic structures.
Private Sector Participation in Water Service Delivery
The following concession contracts have been awarded (% capital is shown in brackets):
• SAUR Neptun Gdansk SA (51% Saur International, 49% Gdansk Municipality).
• AQUA S A Bielsko-Biala (Bielsko-Biala Municipality 51%, United Utilities Poland BV 33%, other private shareholders 16%).
• PWiK Tarnowskie Gory (63.5% Compagnie Generale des Eaux Societe en Commandite par Actions Paris, 25.1% Tarnowskie Gory Municipality, 3.1% Miasteczko Slaskie Municipality, 8.3% employees).
• PWiK Dabrowa Gornicza (35% RWE Group, 66% Dabrowa Gornicza Municipality)
There has been little recent activity in increasing the number of concessions, mainly for political reasons. The new government hopes to change this. An example of this is the announcement that four smaller municipalities are seeking Public Private Partnerships to improve their water sector infrastructure. Three of these have been identified as: Kozmin and Chodz from Wielkopolska, Przeclaw from Podkarpackie and Piekoszow from Swietokrzyskie. A new law on PPP came into force in 2005.
Funding requirements and availability
Meeting the EU acquis in the water sector is estimated to require €16 billion in the period 2007 - 2015 by which time Poland must comply with the requirements of the Urban Wastewater Treatment Directive.
The Operational Programme – Infrastructure and Environment, produced by the Ministry of Regional Development allocates € 27.8 billion of expenditure in the period 2007-13 using both the European Regional Development Fund and the Cohesion Fund. Two of the stated priorities are:
• Water and sewage management
• Waste management and protection of the earth
Operational Programme water sector spending priorities are:
• Water management and wastewater treatment € 2.9 billion (€ 2.5 billion from EU and € 0.4 billion counterpart funding)
• Flood control € 0.588 billion (€ 0.5 billion from EU funds and € 0.088 billion from counterpart funds)
• Projects helping enterprises adapt to environmental protection requirements € 0.25 billion (€ 0.2 billion from EU funds and € 0.05 billion from counterpart funds).
It is estimated that around € 1.0 billion will be allocated each year on environmental projects the majority of which will be for: improvement of surface water quality, improvement of drinking water quality, water distribution and sewerage systems and flood control systems.