PL construction: New EU budget and new road spending (positive)

According to daily Rzeczpospolita quoting government sources, Polish state cane expect around EUR 20bn of subsidies for the transportation for the years 2014-2020 encompassing the new EU budget policy announced during the last weekend. According to the daily, Poland can receive around EUR 10bn for the road transportation. The rest mainly would be devoted for the rail, municipal and inland river transportation. The National Road Authority (GDDKiA) is expected to spend around PLN 470m in 2013 on preparatory works which would mean an increase from PLN 350m spent in 2012.

Our view:
As we understand, the firm amounts which are going to be devoted on transportation are not entirely confirmed yet. However, given that the presented numbers are going to be confirmed in the months ahead it would mean that road transport is set to receive comparable amount of money to the period 2007-2013. Now, the key thing is not to cumulate the announcement of the contracts in short period of time like it happened in years 2009-2010. At that time the GDDKiA agency has organized more than 140 contracts which led to massive increase in cost of materials which in turn has made many companies bankrupts.