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Chinese engineering groups to plough €9bn into road-building, energy projects in Poland?


2011-04-01



China Overseas Engineering Group (Covec), the number one construction engineering company in Asia, is prepared to invest €5bn or more in road infrastructure projects in Poland under the public-private-partnership (PPP) model, Rzeczpospolita reported.

The company, which at present is building two sections of the A4 motorway linking Warsaw and Lodz, is looking for opportunities to significantly increase its exposure to Poland’s road-building programme. It has written to the Infrastructure Minister and the mayor of Warsaw declaring an intention to execute at least two major infrastructure projects under the design-build-finance scheme. According to the newspaper, the proposals include the second line of Warsaw’s underground, the section of the A2 from Warsaw to the Eastern border, or a 120-kilometre section of the A1 between Tuszyn and Czestochowa. The combined value of the latter two projects is estimated at PLN 7.5-8.5bn (approx. €1.9-2.1bn).

The Infrastructure Ministry says the government’s recently updated road-building strategy sees PPP as one of possible models of financing infrastructure projects in complement to state-funded investments. However, no projects will be approved that would increase the country’s public debt.

Meanwhile, Covec, Shanghai Electric Group and China National Electric Equipment Corporation are also prepared to invest the equivalent of PLN 15bn (€3.7bn) between them in the construction of coal-fired blocks at Poland’s power plants, Rzeczpospolitareported, citing unofficial sources. If confirmed, this might substantially alter the economics of building new coal-fired blocks for energy companies operating in Poland. The sum would be sufficient to fund three 1,000 MW blocks (concerns about the economics of coal-fired plants prompted groups such as RWE or Vattenfall to abandon plans to build such facilities in Poland, while domestic energy companies aim to switch to gas).



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