Government’s flagship canal project was “uneconomical path to nowhere” finds Polish state auditor

Nov 10, 2023 | Business, Politics

One of the government’s flagship infrastructure projects – a canal allowing ships to avoid Russian waters, which opened last year – was economically unjustified and involved unlawful spending, the state audit office has found. It called the canal an “uneconomical path to nowhere”.

The Supreme Audit Office (NIK) pointed to the soaring costs of the project – which ended up costing more than double what was originally planned – and the fact that necessary work to make a nearby port accessible to ships using the canal has still not been carried out.

The 1,300-metre-long canal cuts across the Vistula Spit, thereby linking the Baltic Sea with the Vistula Lagoon. That allows ships to pass between without having to go through the waters of Russia’s Kaliningrad exclave.

It was opened last year on 17 September, the anniversary of the Soviet invasion of Poland in 1939, in a ceremony attended by President Andrzej Duda and Prime Minister Mateusz Morawiecki.

Duda declared the canal to be “a great victory for Poland, for patriots, for those who understand the word sovereignty”. He called it a “symbolical path” that will mean Poland no longer “has to ask for the consent of a country that is not friendly towards us, whose authorities do not hesitate to attack and enslave others”.

However, in its report, published yesterday, NIK wrote that “the goal of state security cannot constitute a justification for conduct contrary to applicable law”.

Its audit found that the final cost of the project was almost 2 billion zloty (€450 million) compared to an initial estimate of 880 million. NIK calculated that 381 million zloty of that spending involved irregularities, with 213 million zloty spent in violation of the law.

The auditor noted that, even before construction began in 2019, the government acknowledged that the planned cost of the project could double, while even a 20% increase would make the plans economically unviable.

Among the problems identified by NIK were improper supervision of the programme by government agencies, which resulted in irregular spending. As an example, it cited the conclusion of 13 contracts, the costs and deadlines of which exceeded the framework outlined by the government in the plan.

Moreover, even though the canal was inaugurated over a year ago, work has still not been completed on dredging a channel from the canal to the port of Elbląg, meaning that larger vessels are still unable to enter the city’s port.

Among NIK’s findings was that a contract was concluded for the purchase of a dredger that was never actually used, resulting in wasted expenditure of almost 117 million zloty.

In response to NIK’s findings, the infrastructure ministry issued a statement to Business Insider Polska saying that “assessment of the cost-effectiveness of an investment is not limited to the economic dimension alone and the overriding role of the public interest must also be taken into account”.

“The increase in the programme’s value is due to the need to implement elements of the investment and the use of technologies that were not envisaged at the concept stage in 2016,” it added.

Meanwhile, the minister responsible for maritime affairs, Marek Gróbarczyk, claimed that NIK’s report was “political” and part of a “vendetta” against the government by the office’s president, Marian Banaś.

Banaś was once a member of the current govenrment but since taking over at NIK has become one of its biggest opponents. Gróbarczyk pointed to a secret recording of Banaś published last month that suggested he was preparing a series of reports that would embarrass the government.


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Main image credit: IMGDY (under (CC BY-NC-ND 3.0 PL)

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