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IMF Country Report No. 22/321

POLAND

TECHNICAL ASSISTANCE REPORT – PUBLIC INVESTMENT MANAGEMENT ASSESSMENT

October 2022

This Technical Assistance Paper on Poland was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed in January 2022.

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Title page

FISCAL AFFAIRS DEPARTMENT

Republic of Poland

Public Investment Management Assessment

Torben Hansen, Eduardo Aldunate, Sage de Clerck, Karim Foda, Duncan Last, Isabel Rial, Iwona Warzecha, and Barbara Ziolkowska

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Technical Report

January 2022

The contents of this report constitute technical advice provided by the staff of the International Monetary Fund (IMF) to the authorities of a Poland (the “TA recipient”) in response to their request for technical assistance. This report (in whole or in part) or summaries thereof may be disclosed by the IMF to IMF Executive Directors and members of their staff, as well as to other agencies or instrumentalities of the TA recipient, and upon their request, to World Bank staff and other technical assistance providers and donors with legitimate interest, unless the TA recipient specifically objects to such disclosure (see Operational Guidelines for the Dissemination of Technical Assistance Information— http://www.imf.org/external/np/pp/enq/2013/061013.pdf).

Disclosure of this report (in whole or in part) or summaries thereof to parties outside the IMF other than agencies or instrumentalities of the TA recipient, World Bank staff, other technical assistance providers and donors with legitimate interest shall require the explicit consent of the TA recipient and the IMF’s Fiscal Affairs Department.

This technical assistance (TA) was in part provided with financial support from the European Union.

Contents

• ACRONYMS

• PREFACE

• EXECUTIVE SUMMARY

• I. TRENDS IN PUBLIC INVESTMENT

• A. Trends in Public Investment and Stock of Capital in Poland

• B. Composition and Financing of Public Investments

• II. EFFICIENCY OF PUBLIC INVESTMENT

• III. PUBLIC INVESTMENT MANAGEMENT INSTITUTIONS

• A. The PIMA Framework

• B. Overall Assessment

• C. Investment Planning

• D. Investment Allocation

• E. Investment Implementation

• IV. CROSS-CUTTING ISSUES

• A Legal Framework

• B. IT Systems and Data Management

• C. Capacity

• BOXES

• 3.1. Examples of Central Public Investment Management (PIM) Units

• 3.2. National and Sectoral Planning

• 3.3. Stepwise Project Appraisal in Chile

• 3.4. Multi-annual Programs and the Annual Budget

• 3.5. The 2016 Budget Reform Plan

• 3.7. The UK’s Infrastructure and Project Authority (IPA)

• 3.8. Selected NIK Audit Activities in 2020 Related to Public Investment

• FIGURES

• 0.1. Strength of Public Investment Management in Poland

• 1.1. Total Investment

• 1.2. Public Investment and Capital Stock

• 1.3. Public Investment Comparison

• 1.4. Public Investment Capital Stock per Capita

• 1.5. General Government Fiscal Balance, Total Revenues and Exenditures

• 1.6. Composition of General Government Total Expenditures

• 1.7. Public Investment Cyclicality

• 1.8. Public Investment and EU Funds Inflows

• 1.9. Absorption of 2014–20 ESIF Funds

• 1.10. Poland: Absorption of 2014–20 ESIF Funds

• 1.11. PPPs Number and Value of Projects by Economic Sector

• 1.12. Number of PPPs by Project Value, as of Second Quarter 2021

• 1.13. General Government Capital Expenditures by Level of Government

• 1.14. Composition of General Government Total Expenditures by Function

• 1.15. PPP Capital Stock, Comparison with Peers

• 1.16. PPP Capital Stock, Comparison with Peers, 2019

• 2.1. Perception of Quality in Infrastructure, Components for Poland

• 2.2. Perception of Quality in Infrastructure, Comparison with Peers

• 2.3. Measures of Infrastructure Access, 2019 (or most recent year)

• 2.4. Efficiency Frontier and Gap—Quality of Infrastructure

• 3.1. PIMA Framework Diagram

• 3.2. Main Public Entities Involved in Infrastructure

• 3.3. Design and Effectiveness of Public Investment Management Institutions

• 3.4. Compliance with Fiscal Rules

• 3.5. Composition of PCs

• 3.6. Deviations Over Time in Multi-annual Programs

• 3.7. National Roads and Highways Maintenance Expenditures

• 3.8. Composition of Maintenance Spending in Transport Sector

• 3.9. Maintenance Spending on Roads

• TABLES

• 0.1 Summary Assessment

• 3.1. Projected Multiyear Capital Spending versus Actual Capital Spending

• 3.2. Extra-Budgetary Spending of Road Fund on National Roads Program

• 3.3. National Roads and Highways: Immediate Maintenance Needs Estimated at End-2020 to Eliminate Sections Classified in Poor/Critical Condition

• 3.4. Key Public Procurement Data for Years 2017–20

• ANNEXES

• 1. PIMA Summary Recommendations

• 2. PIMA Questionnaire

• 3. Main Regulators in Infrastructure Markets

• 4. Possible Outline of Public Investment Annex in Annual Budget Document

• 5. Good Practices for Maintaining Infrastructure Assets

• 6. Legal Framework Related to PIMA Institutions

• 7. Overview of PIM-Related IT-Systems

Acronyms

Preface

In response to a request from the Ministry of Finance (MoF) of Poland, staff from the IMF’s Fiscal Affairs Department (FAD) undertook a remote Public Investment Management Assessment (PIMA) during September 28 to October 27, 2021. The mission team was led by Torben Hansen (FAD) and included Sage de Clerck and Isabel Rial (both FAD staff), Karim Foda (EUR staff), Eduardo Aldunate and Duncan Last (both FAD short-term experts), and Iwona Warzecha and Barbara Ziolkowska (both World Bank staff).¹

At the MoF, the mission team met with: Mr. Tadeusz Koscihski, Minister of Finance; Tomasz Skurzewski (deputy director) and staff from the International Cooperation Department; Piotr Dragahczuk (deputy director) and staff from the State Budget Department; Marek Skawihski (director) and Joanna Beza Bojanowska (deputy director) from the Macroeconomic Department; Barbara Styczeh (deputy director) and staff from the Paying Authority Department; Marek Szczerbak (deputy director) and staff from the Public Debt Department; Zdzis+awa Wasaznik (deputy director) and staff from the Local Government Finances Department; and staff from the Economic Policy Support Department; Economy Financing Department; Value for Money and Accounting Department; and Guarantee Department.

Further, the mission met with: representatives of the Ministry of Infrastructure and Polish Water, including directors Wojciech Skowyrski, Grzegorz Szymoniuk, and Jaros+aw Waszkiewicz; representatives of the Ministry of Development Funds and Regional Policy, including deputy directors Katarzyna Kromke-Korbel, Michat Piwowarczyk, and Joanna Gajda Sobieszczahska; B+azej Olek (director) and staff of the Project Monitoring Office’s Analyzes Department at the Prime Minister’s Office; representatives of PGNiG, including director Piotr Szlagowski; Mr. Wojciech Krawczyk at the Ministry of State Assets; and representatives of the Ministry of Climate and Environment, including director Pawet Pikus, as well as Izabela Giba+a, director from the EU Funds Office.

The mission also met with: Pawet Borys, President of the Polish Development Fund; President Roman Sze+emej and officials from the City of Wa+brych; representatives of the Supreme Audit Office (NIK); representatives of the General Directorate for National Roads and Motorways, including directors Anna Mroz and Tomasz Smoleh; representatives of the National Fund for Environmental Protection and Water Management, including manager Ernest Hys and director Piotr Makuch; and representatives of the Public Procurement Office; the Energy Regulatory Office; and the European Union Delegation.

The mission team would like to thank all these officials for the frank and open discussions and close cooperation during the mission. Particularly, the mission is grateful for the support from Tomasz Skurzewski and his team, especially Marta Skrzyhska, Damian Szostek, and Dominik Skopiec in coordinating the work of the mission and providing outstanding support before and during the mission. Also special thanks to Joanna Rheindorf-Zaorska and Bozena Glowacka for their excellent interpretation and translation assistance.