GB No. 2(17)/95

the motorway construction program:


A bill concerning construction of toll motorways has been approved. As it has been planned, over 15 years 2571 km of motorways is to be built in Poland. This is an amount decided in the program adopted by the Suchocka government in July 1993, handed down to the following one, lead by Pawlak. The state Agency for Motorways Construction will be in charge of the works.

The total costs of the enterprise is estimated at $7,8 billion US. Probably they will exceed the sum as some parts of the motorway are planned to cross highly urbanised and mountain regions where the road building is much more expensive. Also, interests from loans taken for the construction (probably, they amount to 10% per year) must be included here. As Paweł Różański stated in his article Motorway Dreams (the Gazeta Wyborcza, 21 Nov. 1994), "it may turn out that the overall cost of the enterprise will substantially exceed $10 billion US".

15% of the sum is to be provided from the State Treasury. This means that either taxes will be raised or the treasury deficit will increase and the society will lose due to aggravated inflation. Another solution are cuts in health and social services or environmental protection as we can not be so naive as to hope that the funds for red tape and subsidies for banks will be reduced. 15% of $10 billion US is $1,5 billion US. This means that over 15 years Poles will have to pay 2,500 billion "old" ZL annually for construction of the motorways, regardless whether they want to or not. If you do not have a car and use mainly the rail transport you will have to finance an enterprise you are not actually interested in and which will cause the rail service to shrink.

The remaining sum - 85%- is to be incurred by private companies who as a reward will be given an opportunity to make a profit on the motorway over an estimated 20-30 years. Later the motorway are to be taken over by the state: I wonder whether the firms, in view of the approaching take-over, will take care of the roads so extensively at the end of the term as at the beginning? I also wonder whether the state, having taken the motorways over, will leave the toll or make the roads free, thus leaving the burden of their maintenance on the Treasury. But there are still 25 years to think about it. What companies are to participate in the enterprise is for the Agency for Motorways Construction to decide: reportedly, the offers are to be submitted this year. The winners will receive 50% a guarantee for cthe loan, which means that if a company is not able to pay off loans taken from foreign banks, the Treasury will have to cover 50% of the sum. As we cannot count on the politicians in charge incurring the money from their own pockets or the pockets of those who have granted the guarantee, it will be society who will bear the burden. It reminds me of the Gierek times. Bearing in mind the specific Polish situation and a lot of funny business with contract granting and bankruptcies encouraged by inefficient Polish trade law, we can expect that , for instance, a company X will make half of the credit vanish and then it will go bankrupt having completed several per cent of the planned works. Its president, perhaps the brother-in-law of the Agency for Motorways Construction employee, will appear in Bermuda together with whole the board of the company. Such a situation is highly probable as half of the many-billion-loan is actually a potential grant.( of someone else's money by the way).

The land needed for motorway building will be bought up under constraint, at imposed prices, If any of the 100 thousand landowners consider the price too low and refuse to sell their property they will be summarily expropriated. When the motorway is completed the farmers whose lands will be constantly polluted by car exhaust will be prohibited from growing certain kinds of crop instead of being granted a regular compensation. That is what means respecting private property in the Polish newspeech.

Furthermore, in Poland, like in most countries in the world, there is no efficient law that would allow recompense for air pollution since by law the air belongs to the state. When the motorway is completed a great number of people will have to bear costs of the air pollution caused by the increasing traffic, with no hope for any compensation.

To Sum up, building and using motorways according to the adopted plan means big profit for some people and for the other great loss. Such a situation occurs always when a business is conducted by means of the state mechanisms. Without expropriations, 15% of costs financed by the state treasury and 50% of the governmental loan guarantees, without the imposed fact of the state owning the air, which prevent people from demanding compensation for air pollution, without all these things the overall costs of building the motorway would have been incurred by the investor. Furthermore, he would also have had to include the above-mentioned costs in the price of using a motorway by his clients. People who would not be interested in using the road would have to pay for it and people interested - accordingly to their interest.. Under condition that the whole business would be profitable at all.

By the way, the case of the Polish motorway shows that, contrary to what is widely believed, the state machinery does not guard against exploitation which is allegedly a result of free market. The situation is quite the opposite: the state machinery enables some privileged groups to exploit others. The state is a legitimate, widely accepted apparatus of coercion. The only way of obtaining anything without resorting to coercion is creating it by one's own work or acquiring it from somebody else, which usually means business transaction. In both the above cases nobody loses. Coercion is used if it brings profit and if it is not too risky to use it. The state machinery gives many ways of imposing coercion and makes it quite safe, which in turn means profit for the privileged groups.

It is naive to believe that this machinery may be used to restrain the groups. If people are good there is no need for a state. If they are evil it is even better not to have it.

Going back to the project of motorway construction: the costs involved here are big enough not to ignore the problem. It is necessary to take measures to repeal the relevant bill, to make expropriations impossible as well as to prevent any governmental subsidies and loan guarantees not only in this particular case but also in the case of any similar large enterprises.

The above statement relates to the project of railway development suggested by some environmentalists, too. Though the rail is certainly less hazardous for environment than motorways, enlarging its network by applying the same principles as in the case of the latter would be a business done at society's expense. Perhaps the cost and risk would be even higher since the western banks would hardly grant loans for the enterprise being less lucrative than motorway building. This in turn would lead to higher governmental credit guarantees, perhaps up to 80% or even to 100%, and bigger state subsidies. The Greens maintain that railway transport is cheaper than car due to lower environmental damage. If this is true, they should focus on promoting such conditions that costs would be incurred solely by the users of the transport. Such conditions could be created if all land was privatised, together with the air and water, and the owners were able to demand in court compensation for the private property violation. And only then a sheer calculation would make people invest in rail rather than in motorways.

Jacek Sierpiński
reprinted from Zielone Brygady 1/95

GB No. 2(17)/95 | Contents