A2 Toll Motorway, Poland

The A2 toll project is part of the massive infrastructure-restructuring programme currently underway in Poland.

In October 2000 the Polish minister for transport and marine economy announced that a concession agreement had been signed that defined the financial plan for the construction of the A2 Nowy Tomyśl to Konin section of the A2 motorway in Poland.

A consortium of 18 Polish companies, AWSA, was awarded the contract under a build-operate-transfer arrangement for a concession period of 37 years (until 2037).

The project, overseen by the General Directorate of National Roads and Motorways (GDDKiA) has required an investment of €875m and is one of the largest privatised transportation projects ever experienced in Poland. The Polish government hopes to construct over 2,500km of motorway by 2015.

MAJOR POLISH TRANSPORT INFRASTRUCTURE PROJECT

The A2 motorway (610km) will run through Warsaw to connect with Germany (German A12 autobahn) in the East and Belarus in the West as a part of the planned East-West Trans European motorway (2,500km) Berlin to Moscow route (part of the E30).

The Nowy Tomyśl to Poznan to Wrzesnia to Konin stretch of the A2 (phase 1) is approximately 150km and has been open since 2004, but phase 2 is already planned. Financially appraised in early 2004, it will extend beyond Nowy Tomyśl to Swiecko near the German border, making the road 250km long.

The section from Nowy Tomyœl to the German border is still under contention as AWSA are negotiating the financial terms of the project with the Polish Government. This could be finished by 2010. The section from Strykow to Warsaw is being constructed under a public-private partnership (PPP) arrangement and the contractors are due to be chosen in 2008. By 2010 Warsaw should have its first motorway connection to the European motorway network.

Construction so far has included over 250km of dual-lane, high-speed, toll operated motorway. There are seven interchanges, four tolling plazas, 16 service areas, six fuel stations, two restaurants, three maintenance centres and 109 new and renovated bridges.

The new 100km stretch from Nowy Tomyśl to Swiecko is planned to have eight interchanges at Świecko, Rzepin, Torzym, Łagów, Myszęcin, Jordanowo, Trzciel and Nowy Tomyśl. Of these, it is likely that only three will be built initially including the Jordanowo at the intersection of the motorway with the intended new S3 expressway. The completion of financial arrangements for phase 2 was in 2006 and completion of the section will occur by 2009. The 100km section from Konin to Strykow (near Lodz) was completed in July 2006.

TOLL MOTORWAY CONSTRUCTION WORKS

Work on the toll motorway began in 2001. Construction was split into three sections, the 47.6km stretch from Wrzesnia to Konin, 37.5km from Kresiny Interchange in Poznań to Wrzesnia and 50.4km from Nowy Tomyśl to Kormorniki Interchange in Poznań.

AWSA shareholders formed two companies for the A2 project. The first was a development company – A2 Bau Development GmbH, founded by STRABAG AG and NCC International AB and responsible for design and construction, and the second an operating company - Autostrada Ekspolatacja SA, founded by Transroute International SA (main shareholder of AWSA), Kulczyk Holding SA and STRABAG AG.

In order to ensure the company adhered to the terms of the concession the GDDKiA appointed WS Atkins (UK) as an independent engineer to supervise the design and construction process.

Construction work was carried out by two main contractors – STRABAG Polska and NCC Polska – and comprised paving the road surface, new bridges, repair and renovation of existing structures, rehabilitation of the pavement, drainage work, 23 sewage plants and the installation of 3m x 1m amphibian culverts and nine animal passages (seven bridges and two passages).

In addition, 29.5km of noise barriers, between 2m and 6m high, were constructed and 150 oil derivative separators were installed to treat contaminated water.

At its peak the construction work required 50 subcontractors and over 4,500 workers. Konin to Września opened for traffic on 22 December 2002, Września to Poznań Krzesiny on 27 November 2003, and Poznań Komorniki to Nowy Tomyśl on 27 October 2004.

TRAFFIC SAFETY AND TOLLING

Traffic safety and monitoring equipment has been installed to ensure that the road was up to the most demanding situations. EGIS Projects, a subsidiary of Groupe EGIS, was responsible for the supply and installation of all the fixed operating equipment for toll systems, telecommunications and traffic management systems. KWH Pipe Poland supplied cable jacketing and conduit pipes up to diameters of 1,600mm for all electric and telecommunications cables installed during the project.

Three state-of-the-art toll plazas were constructed and use modern tagging devices and cash payment technology to maintain a steady throughput of vehicles. The toll plazas are located in Lądek (Konin to Września section), Nagradowice (Września to Poznań section) and Gołuski (Poznań to Nowy Tomyśl section). At each toll plaza there are 5 lanes in each direction for customer vehicles and a service lane reserved for maintenance and emergency vehicles. Drivers may pay cash or purchase a discount card for multiple journeys. Tags can be obtained from the operating company by arrangement.

Following the Toll Motorway Act of July 2005, trucks of up to 3.5t can use the A2 motorway free-of-charge providing they display a valid road charge card (vignette) which is usually purchased as a type of road tax. However, this has become a controversial issue and is the subject of a dispute between AWSA and the Polish government.

THE POZNAŃ BYPASS

The Poznań bypass lies just south of the City of Poznań and consists of 13.3km of dual lane carriageway. The road construction was financed by loans from the EIB, Polish budget and European Union grant aid and supervised by the GDDKiA.

The Poznań Bypass runs from Poznań Krzesiny to Poznań Komorniki, has 22 bridges and the potential in the future to be widened to three lanes making use of an overly large central reserve. The road is toll free in deference to a condition of the European Union grant.

Construction was project managed by Scott Wilson in conjunction with JPP Consult of Wroclaw and the road was designed by Transprojekt-Poznan. Construction was carried out by STRABAG Polska and NCC Polska and 40 subcontractors using 650 workers. The road was opened for traffic on 12 December 2003 as a freeway.

FINANCE

Autostrada Wielkopolska SA (AWSA) was the consortium of Polish companies with responsibility for the overall control of operations and construction for the A2 toll project.

AWSA entered into a 37-year build-operate-transfer agreement that will give them overall responsibility for the road, collecting the tolls and servicing the debt.

Financial backing (November 2000) was a package put together via a series of long-term loans from major banks across Europe, including €235m (26%) from Commerzbank and Credit Lyonnais, a long-term €275m (33%) loan from the European Investment Bank (EIB), with the Polish state treasury as guarantor, and sponsor equity of €235m (26%). The remainder of the finance (15%) came from toll revenues.

The road cost €637.5m in direct construction and design costs – 73% of the total, a lumpsum turnkey contract price. The remainder will be spent on preparing the motorway for operation, the provision of essential equipment, the operator's fee for operation and maintenance during construction, servicing of the loans and a further €20m to the Polish state treasury for rent and concession fees.

The lawyers arranging the finance deal for AWSA were Baker & McKenzie Gruszczynski i Wspolnicy and the company retained by Commerzbank and Credit Lyonnais to carry out a technical due diligence review were the Louis Berger Group.

Mike Webster of Baker & MacKenzie commented: "The A2 project is one of the most important infrastructure projects in Central and Eastern Europe and has been front page news in Poland since the initial grant of the concession in 1997. A number of significant legal and financial structuring issues needed to be overcome to bring the project to financial close and we are delighted that this has been achieved. The Polish Prime Minister, Jerzy Buzek, described the project as the most complicated financing ever carried out in Poland, and everyone involved should take that as a compliment!"