State auditor raises concern over government’s mega-airport plans

Poland’s state auditor has raised concern that plans for a new mega-airport – the government’s largest investment project – lack a full business justification, have been prepared through “unreliable planning”, and are seeking to meet “impossible deadlines”.

The report, published last week by the Supreme Audit Office (NIK), finds that a number of tasks have already overrun by up to two and a half years and that there is a high probability construction will not be completed by the current 2027 deadline.

The entity overseeing the project, however, argues that the identified problems are not unusual for such an investment and claims that, overall, NIK’s report is positive. It also denies that the 2027 target date is in danger.

The Solidarity Transport Hub (CPK), located between Warsaw and Łódź, will feature new rail and road connections, as well as the planned airport. The government aims for it to become a major regional air hub.

NIK, however, has called for an immediate cost-benefit analysis of the undertaking, especially given the collapse of passenger flight traffic during the pandemic.

Before the pandemic, the government envisioned the airport serving an initial 45 million passengers a year, which would have put it at a similar level to London Gatwick. The aim was to then expand that to 100 million a year, which, on pre-pandemic figures, would have made it the world’s second busiest airport alongside Beijing and behind only Atlanta.

However, managers and officials admitted last year that the pandemic had necessitated a “completely different” business model than previous foreseen, with a greater emphasis on air cargo.

In its new report, NIK found that, for the airport to break even, it would need to serve 24.3 million passengers annually by 2030 and come at a cost of no more than 46 billion zloty (€10.1 billion). The CPK company currently estimates total costs at 34.9 billion zloty (€7.7 billion).

However, NIK notes that an official document containing implementation schedules and budgets for individual parts of the project has not yet been adopted. “As a result, there is no complete material and financial timetable for CPK,” write the auditors.

They also note that, while funding for preparatory work (9.23 billion zloty up to 2023) had been secured, it remains unclear where the remaining financing for the later stages of the venture will come from.

As a result, NIK flagged up that failure to provide financing for further stages of investment as a serious risk. It also raised concern that current staffing plans could cause “unjustified increases in costs resulting from the duplication of certain tasks and excessive employment”.

NIK also criticised CPK for “unreliable planning” and setting “impossible deadlines”. As a consequence of the problems identified , there is a “high probability” of construction not being completed by the stated deadline of 2027, concluded the auditors.

In response to NIK’s report, CPK argued that the issues identified by the auditors “occur in the implementation of every investment” and said it was taking “appropriate steps” to minimise these risks. The company said that a multi-stage approach to funding was their chosen method to organise the budget.

It also argued that NIK’s report had been “positive” overall, pointing out that the most frequently repeated phrase had been that “no irregularities were found in the activities of the inspected entity” and thus no mismanagement had been identified.

Speaking to parliament last week, the government’s plenipotentiary for the CPK project, Marcin Horała, said that the expenses had been “rational and appropriate to the stage of advancement of the investment”. He added that spending on management had been reduced by half in 2021 as the number of board members decreased.

CPK also said that the auditor’s assumption that the 2027 deadline was endangered was “unjustified”. Horała concurred that the project was “sticking to schedule for the moment” and that investment deadlines were being updated and analysed, reports the Polish Press Agency (PAP).

Recent years have seen NIK release a number of negative reports on government projects, and even issue notifications of suspected crimes by ministers.

However, supporters of the government have argued that the audit body is being used for political purposes by its chief, Marian Banaś, as a response to corruption allegations he and his family are facing.

Other critics of the government’s planned airport, including the political opposition, have long argued that it is an unnecessary use of vast state resources. They note that the pandemic has dramatically reduced air travel and that the hub model is becoming less relevant.

Ryanair boss Michael O’Leary has also condemned CPK as a “stupid project” that will “waste billions of zloty on a sandcastle in the middle of nowhere”. However, Poland’s national airline, LOT, has supported the project, with its CEO, Rafał Milczarski, saying that CPK can be a “gateway from the EU to the east”.

In October, the company behind CPK announced that it has started buying the first plots of real estate for the project and signed a €6.5 million deal for an investment masterplan. Later that month, the first eviction was ordered.

In response, local residents have protested plans to bulldoze a number of villages. The site of the planned transport hub includes 520 properties and 3,800 residential plots, and is currently inhabited by around 1,000 people.

Main image credit: CPK Press Materials

Maria Wilczek

Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.