Investments worth billions are waiting for the government’s support

The reason? New regulations. During this crisis year companies have much less money to invest and they are counting every złoty or dollar twice. According to preliminary data from the National Bank of Poland, direct foreign investments reached EURO 4.5bn between January and August, although this is in comparison to EURO 7.4bn a year ago and EURO 1.2bn in the record year 2007. This does not mean, however, that nobody wants to build new factories or service centres in Poland. The Polish Information and Foreign Investment Agency alone is currently working on nearly 120 projects. If they were to be carried out, 36,000 would be created.

But there is a problem: the government is delaying the decisions. One of the criteria taken into account by an investor is public support, for example towards the creation of new jobs. According to Marcin Kaszuba, the direct foreign investments manager at Ernst & Young, such government subsidies are often one of the key factors determining the location of big investments. The government promised to provide support to 24 investors, 11 of whom are to receive it by the end of this year. Altogether, the 24 companies could create about 10,000 jobs and invest almost PLN 2.5bn.
It is this that concerns the likes of IBM, Volkswagen, Goodrich and HP. “But the whole procedure is delayed. We are starting to worry because we were supposed to obtain the consent of the Council of Ministers at the turn of summer and autumn”, says Jacek Levernes, the chairman of the Global Business Centre of Hewlett-Packard in Wrocław and the chairman of the Polish Association of Business Service Leaders in Poland. HP wants to extend the service centre in Wrocław and hire even 1,000 additional workers. “The government should care about this; employment in Poland is increasing and we do have work for young graduates”, adds Levernes.
“It’s true, we are in delay. But the government will fulfil its obligations.  We are staying in touch with the investors”, says Rafa Baniak, the deputy Economy minister in charge of the investments. “Soon the government will start to discuss the support programmes”, Baniak adds. What is the problem? “The arrangement procedures became more complicated”, explains Rafał Baniak. From the beginning of this year each long-term programme of support for investments has been understood pursuant to the Act on the Principles of Development Policy as “the development programme”. It requires additional paperwork and arrangements, for example with the Ministry of Regional Development.

Pursuant to the act, the long-term programmes require the development of special evaluation reports confirming the effectiveness and results of the implementation of a given programme. Minister Baniak confirms, however, that for quite a long time it was not certain whether the long-term programmes for investors would be subject to the act at all. This was the cause of the delay. Now the government should act quickly as the investors may finally lose their patience. Each of the 11 projects must be approved by the Council of Minister by the end of the year.  Then they must be approved by the European Commission. “The delay is damaging Poland’s image as a reliable partner. Remember that some companies started their investment as early as 2007”, says Marcin Kaszuba from Ernst & Young.
Marcin Kaszuba emphasizes that a couple of years ago we lost each battle with our neighbours for big investment projects. Toyota and Peugeot-Citroen decided to manufacture small cars in the Czech Republic instead of in Poland. A year later, Slovakia took a Peugeot-Citroen factory worth 700 mln EURO, with 3,500 jobs from right under our nose. In 2004 the Slovaks turned out to be better in the battle for a 700mln EURO worth investmnet of Hyundai-KIA. “The bad patch was interrupted by MAN’s investment near Cracow. In that case, a competitive offer for public support and the the government’s appropriate response proved to be crucial", Kaszuba explains.

/Leszek Baj - Wyborcza.biz/