A1 motorway. Photo: GTC

1 Dec 2008

Amber One

Much faster cargo hauling to a Baltic Sea region harbour and a new quality benchmark for infrastructure projects in Central and Eastern Europe. A newly launched stretch of the A1-Amber One-motorway from Gdansk 90 kilometres southward is just the beginning of what will become Europe’s new north-south corridor.

The A1 motorway project is clearly very important in many respects, but safety is its primary value.

“Modern roads save lives. Since we opened the first 25 kilometres a year ago, not a single casualty has happened on this road. You can’t overestimate the value of this project,” says Torbjörn Nohrstedt, CEO of the Gdansk Transport Company (GTC), a special enterprise established by Polish and foreign partners for the A1 construction project.

Amber One is being implemented as a public private partnership (PPP). The Polish government has granted GTC a concession lasting until 2039. The company is a joint venture of Swedish Skanska Infrastructure Development AB, British John Laing Infrastructure Ltd., Polish NDI Autostrada Sp. z o.o., and South African Intertoll Infrastructure Developments BV.

On 17 October, three of Poland’s cabinet members, hundreds of officials from local municipalities, top business leaders and the project consortium gathered near the village of Nowe Marzy for the inauguration of the first phase of Amber One.

According to Polish Minister of Infrastructure, Cezary Grabarczyk, the A1 axis will form the backbone of the country’s transport system, along with the future motorways A2 and A4 running east-west.

At home with PPP

Poland is one of Skanska’s home markets. The Swedish company has been involved in this project since 1997.

“Why did we get involved? That’s easy. Sweden gets an alternative, faster route toward central and southern Europe compared to the existing roads through Germany,” explains Mr Nohrstedt. “This 90-kilometre stretch will save 1.5 hours of hauling, which is huge in the road building context.”

Gunnar Lundberg, Senior Investment Manager, Skanska Infrastructure Development, comments: “Our task is to invest. We provide resources in the project’s PPP structure. Being active in PPP road construction projects for the Helsinki-Lahti and the E-18 motorway in Finland and the E-39 in Norway, which also received NIB loans, we draw on our Nordic experience in Central Europe.”

Soil erosion has made the A1 knottier than Skanska’s own experience from other PPP road projects.

Building such a complicated road required tying up much of Poland’s existing infrastructure for support and supplies-“including ships, ports and railcars to transport rock bits from southern Poland and Scotland, for instance,” Mr Lundberg explains.

The team

PPP is a safe niche, which is important in a period of market uncertainty. NDI, the Polish partner in the building consortium, decided to build its business strategy on partnerships.

“In today’s Poland, road building is easier to handle, since the political decision-making and financial structure became much more transparent than in the 90s,” says Jerzy Gajewski, the owner of NDI.

NDI is contributing, as Mr Gajewski puts it, a necessary ingredient to the cooking: the Polish market expertise for the project development.

The UK-based John Laing plc is a developer, investor and operational manager of a number of PPP road, bridge and street lighting projects. Partnering in road-building projects in the Nordic and Central European markets fits well into the company’s strategy.

“We seek to establish ourselves in markets with a strong pipeline of business project opportunities and the A1 is a good long-term project in such a market,” says the company’s Senior Investment Manager, Seamus Crilly. South African Intertoll Ltd. is implementing the toll, emergency and weather systems on A1.

“This motorway is a good quality benchmark for Central Europe. Thanks to the traffic logging equipment, the road operator can know exactly the situation on each section, such as the speed and weight of vehicles,” says Uwe Sauerburg, GTC’s Operation and Maintenance Director, a representative of Intertoll in the consortium.

GTC has signed an agreement with the government for building a new stretch of Amber One-60 kilometres from Nowe Marzy down to the city of Torun in central Poland.

IFIs give security

“PPP is, indeed, about relationships. For us it is important to team up with NIB as a good and reliable partner, which we know from many projects in Northern Europe and Russia,” says Mr Lundberg of Skanska Infrastructure Development.

Jerzy Gajewski agrees: “The success of road building projects like this one is unthinkable without international financial institutions. These banks represent quality financing, also considering their mandates and the transparency with which they operate. Their involvement opens a lot of doors. It gives security to all of the partners.”

GTC and NIB signed a EUR 140 million loan agreement in 2005 with a maturity of 30 years. Other financiers are the European Investment Bank and the Swedish Export Credit Corporation SEK.

Closer together

What will soon be the A1 dual-carriage highway has been a major transport corridor in this country since the Middle Ages, defined by the Vistula river, the country’s main inland water course. This route has connected Polish people to “other communities in Europe sharing values and supporting each other,” as Jerzy Gajewski puts it.

The road is really first class. If you care for an hour of smooth driving, head for Gdansk. Soon the road will continue even further south, all the way down to the Czech border. According to the current plans, the final stretch is to be opened in 2012. Whatever the adjustments the global financial turmoil may impose on these plans, both GTC and the Polish government may be proud of Amber One today.

“The Polish love the sea. Amber One is a pretty name, isn’t it?” says Minister Grabarczyk, smiling. “Its origins go back to the treasure of the Baltic coast. The sea no longer divides, it ties us and Northern Europe even closer together.”

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