CZ/SK verze

"New Railway Corridors Crucial for Europe's North-South Connection," Emphasizes BUDIMEX Management

&quote;New Railway Corridors Crucial for Europe's North-South Connection,&quote; Emphasizes BUDIMEX Management
photo: RAILTARGET/"New Railway Corridors Crucial for Europe's North-South Connection," Emphasizes BUDIMEX Management
10 / 10 / 2023

At TRAKO 2023, we spoke with BUDIMEX's management about the entry of the Polish construction giant into the Czech and Slovak markets. Our guests were Maciej Olek, board member and director for industrial, energy, and transport construction, and Dariusz Bac, director of railway construction.

In the Czech Republic, BUDIMEX may not be widely recognized yet, but it holds a strong position in Poland and internationally. Could you tell us more about the company?

Maciej Olek: BUDIMEX is a Polish company with over fifty years of history. It initially made a name for itself through foreign contracts before refocusing on the Polish market, including several years of operations in Germany. We have a longstanding branch in Cologne, Germany. Recently, we altered our development strategy to re-enter international markets, focusing on the Czech Republic, Slovakia, and the Baltic states. We are also exploring the Swedish market. We have established entities in all these regions and are opening a branch in Riga for a Rail Baltica bid. In Germany, we operate three entities, including Rail BX in Cologne, which received Deutsche Bahn certification for electric traction construction. Our Czech and Slovak operations were previously discussed by Rafal Zahuta.

Regarding Rail Baltica, the Visegrad Group countries recently convinced the EU of the need for new high-speed rail networks, connecting our region with Western Europe and Scandinavia. These networks are now part of the TEN-T system. What can BUDIMEX offer for these projects, and how will the company meet the timelines set by TEN-T regulations?

Dariusz Bac: Building new railway corridors, particularly connecting Northern and Southern Europe, is crucial. BUDIMEX can comprehensively handle such projects, from participation in preparation and design to securing permits and decisions. We have the necessary engineering, technical, and construction resources.

Generally speaking, we are fully prepared to undertake large-scale projects like High-Speed Rail. We are the first Polish company to modernize the Central Rail Line (CMK) from Warsaw to the south, which operates at a maximum speed of 200 km/h. However, two stations, Olszamowice and Idzikowice, have already been upgraded to accommodate speeds of 250 km/h. This railway now features switches that meet high-speed standards.

We have genuine experience and have invested in enhancing the quality of railway infrastructure. This, combined with our capacities, forms a solid foundation for implementing all types of railway projects, not just high-speed ones, abroad. We are preparing for projects across all three Baltic states for Rail Baltica, ensuring smooth implementation in the future.

You are, therefore, a natural partner for CPK (High-Speed Rail and Airport) in Poland. Central Europe is undertaking what is set to be one of the largest rail projects in Europe in terms of financing. What are the costs of your work, and what is BUDIMEX's perspective on financing this project, especially in the wake of the energy crisis, the shortage of some materials in the market, and the wave of inflation that's sweeping through economies, similar to the pre-Covid era?

Maciej Olek: Funding is a significant challenge, especially given recent events like the pandemic, Russian war in Ukraine, supply chain disruptions, and rising energy prices. Prices are higher than they were 2-3 years ago, and we may not see a return to pre-crisis levels. Investors must be prepared for increased spending. Project costs depend on the model, technical solutions, and client requirements.

We possess a substantial project and technical background, which prompts us to actively encourage investors to collaborate on technical solutions. The insights we've gained can greatly contribute to optimizing new projects. The CPK project, comprising 1800 km of new railway infrastructure, is historically unprecedented. Therefore, it's vital to foster dialogue between the market and investors regarding solutions, experiences, technical designs, and materials, to achieve the best possible outcome. While it's theoretically feasible to construct with high-end materials like gold and platinum, the current focus is on optimization through cost-benefit-use-value analysis.

We've dedicated many years to creating opportunities for external investment. In our discussions with CPK, we've proposed that beyond our role as a general contractor, we could also participate as a financial co-investor. This could take the form of a Public-Private Partnership (PPP) or involve financing specific segments of a project. We're open to engaging in similar discussions internationally. Our parent company, Ferrovial, has a successful track record of implementing concession-based models for projects globally.

We have the necessary expertise and thus view the prospect of implementing PPP projects in the Czech Republic positively. Systemic financing challenges are expected, even at the European level. Often, if one project receives funding, another may not. Therefore, we encourage clients to be open to public-private partnerships, as they can be beneficial for everyone, including the end users. If funding from existing sources like the CEF falls through, there's an opportunity for dialogue with companies like ours on alternative ways to complete the network. The future holds many possibilities, and we are very interested in and eager to engage in projects within the Czech Republic.

Rafal Zahuta: BUDIMEX's entry into the Czech market will increase competition and could positively impact prices.