Poland Sets the Example Again: Subsidies for Purchasing and Modernizing Railway Cars Inspire the Czech Republic and Slovakia

Poland has once again become a key point of interest for both the Czech Republic and Slovakia. In addition to its impressive infrastructure developments, Poland's subsidies for freight railway cars stand out as a noteworthy example. Financial support for the purchase of new, modern wagons is something that remains missing in these neighboring countries.

RAILTARGET examined Poland's Transport and Environment operational program, which contrasts with the Czech Republic's Transport Operational Program in more than just its name. We delved deeper into how combining transportation and environmental goals into a single program is not only practical from an EU perspective but also effective. This approach allows environmental protection projects to be integrated with economic initiatives, making transport a natural choice for such synergy. Interestingly, the program also supports smaller projects in health and culture.

So how was the operational program in Poland designed? Clear goals and priorities were set from the start but with the flexibility to adapt as needed. These goals included decarbonizing the economy towards an environmentally friendly and circular production cycle, developing an efficient and resilient transport system with minimal environmental impact, completing sections of the TEN-T core network by 2030, improving transport safety, ensuring equal access to healthcare, enhancing the resilience of the healthcare system, and strengthening the role of culture in social and economic development.

It's also worth noting that, in practice, all transport projects in Poland are administered by the Center for EU Transport Projects (CEUPT), which handles projects for state investment organizations (highways, roads, waterways, ports, multimodal terminals). It also oversees all regional transport projects prepared by the self-governing authorities of Poland's sixteen voivodeships.

This centralization is welcomed in Brussels. The European counterpart to CEUPT is the CINEA agency, which also administers all transport, environment, and energy projects. Centralizing the program and its management allows for a strict review of which EU funding source is most advantageous for each specific project. This management approach has led to maximizing the use of CEF funds for infrastructure (not just from the national envelope but also from competitive bids, where Poland has been much more successful than the Czech Republic). CEUPT is politically mandated to maximize CEF use, leaving other funding for non-infrastructure transport projects, thus avoiding the depletion of the generously co-financed transport operational program (up to 85%) solely on infrastructure.

Across the political spectrum in Poland, there is consensus that the centralization of operational programs was the right decision. This approach enables the government to set priorities without creating a specialized fund administration in each office. Minimal project preparation is outsourced, saving on countless monitoring committees, avoiding bureaucratic battles, and allowing all entities to submit project proposals directly to CEUPT.

Regional governments in Poland are also satisfied, as CEUPT transparently allocates funds to regions. CEUPT also can propose different co-financing shares for various projects, thereby helping policy focus on priorities.

A crucial point for both the Czech Republic and Slovakia is that Polish companies operating passenger and freight rail transport are also beneficiaries of the operational program funds. The main consumers include the PKP group, as well as regional passenger transport companies (Polregio and the so-called marshal regional transport enterprises, and urban transport providers). EU funds in Poland finance the repair and modernization of locomotives for both passenger and freight operators, as well as the modernization and purchase of railway cars and carriages. CEUPT also handles notifications, ensuring compliance with public support principles for vehicles.

The scale of this support is significant. Between 2014 and 2020, PKP Intercity, a subsidiary providing long-distance and international passenger services, received over 1 billion PLN (5.8 billion CZK). The national rail freight operator PKP CARGO has modernized multi-system locomotives, intermodal rail cars, and terminals (e.g., at the eastern border in Małaszewicze) thanks to EU co-financing. PKP CARGO also modernized several thousand wagons produced between 1980 and 2005, used for transporting bulk materials (e.g., coal, ore, sand, gravel).

In the Czech Republic, the situation is the opposite. For various reasons, every institution has its own EU fund apparatus, and at the Ministry of Transport, all EU funds from OPD and CEF are used exclusively for infrastructure. The Ministry has never managed to open funding for rolling stock, possibly due to concerns over project prioritization. An honorable exception is the co-financing of mobile ETCS subsystems, silent brake blocks, and hopefully in the future, DAC. Future revenue from ETS 2 transport emission allowances, expected by the EU in 2027, could be a catalyst for change. However, instead of traditional methods of fighting over these funds as spoils, it would be more beneficial to ensure continuity in political oversight of priorities.

The numerous opinions of Czech transport operators, who face higher levels of support in neighboring countries, have yet to be reflected by the Ministry of Transport. The Modernization Fund, administered by the Ministry of the Environment, offers some hope, with the prospect of future revenue from emission allowances. However, unlike in Poland, Czech operators are in the role of applicants, and it is unclear how the government intends to distribute these funds in the future.

The Polish approach to drawing from the operational program could be an ideal and, most importantly, effective example for the Czech Republic and Slovakia on how to communicate with various EU agencies. By centralizing multiple communication channels into one, it should also be easier for the EU and its officials to find key partners to finalize all necessary administrative points. With a clear communication structure, it is possible to build a better national position, which could lead to more efficient use of individual subsidies. It can be expected that this centralization would also lead to better control and efficiency in the flow of financial resources for specific transport projects.

The Polish example also shows that support for the modernization and purchase of railway cars from EU funds is possible. However, the key factor is setting the right priorities and fulfilling them. The ideal tool is the centralization of communication with the European Union and the establishment of a comprehensive central umbrella authority, with which individual transport operators can directly address specific subsidy support for the modernization and development of their fleets. Significant progress could also be made through changes in the current plans for distributing and drawing funds from emission allowances.