But the previous two decades of political neglect and underfunding saw the network shrink by more than a quarter and left huge swaths of the infrastructure in a desolate state. Thankfully, massive investment, increased demand for domestic and international services and a well-functioning liberalised market have enabled the railways to reverse the downward trend.
In general, prospects for Poland’s railways are moderately positive.
Stable economic growth has created an increase of domestic demand for rail freight. Polish rail freight is also profiting from the country’s geographic location through more international transit connections, particularly due to the increase in direct freight trains to China.
The passenger business has also started to recover, with PKP, the national train operator, seeing an upswing on its inter-city services. Finally, the rationalisation of the rail network has either come to a halt or at least slowed down significantly.
The most important factor influencing further development is the extensive investment in the national network now underway. The previous government had made using all EU funds available for rail a priority. During the European Union’s 2014-2020 Multi-Annual Financial Framework (MFF),€10.2bn will be provided for Poland’s railways. This is more than double the €4.8bn allocated under the previous MFF.
Infrastructure manager PKP PLK is expected to receive the lion’s share - €9.48bn - and for the first time the government plans to allocate the entire funding to rail and not fail to use all of the funds available as it did hitherto.
At least a part of the recent growth in freight and passenger traffic is due to the recent renewals and upgrades where lines have been returned to pre-1989 or even pre-war standards, if not surpassing them. The same effect is expected on a much larger scale after the completion of the current MFF works.
However, repeated disruptions to train services and even entire line closures, which are inevitable given the scale of the work, could deter some passengers and freight customers from using the railways in the short term.
Another positive effect on the market is expected to stem from the establishment of various transport corridors. Two Connecting Europe Facility (CEF) core network corridors - Baltic - Adriatic and North Sea - Baltic - run through Poland, funnelling funds to projects enhancing throughput along the important east-west and north-south axes. As a part of it, Rail Baltica, a standard-gauge link from Warsaw to Tallinn, will connect the Baltic States with the rest of Europe, adding additional potential for transit traffic.
Another important development was the opening of two Rail Freight Corridors (RFCs) in November 2015. Trans-European cooperation between infrastructure managers should greatly facilitate international rail freight and allow it to make effective use of this improved infrastructure.
Last, but not least, Poland should also profit from corridors which do not stem from EU initiatives, but are a result of Chinese attempts to create overland connections to Europe and establish Poland as the European terminus of its New Silk Road.
One of the biggest challenges for Poland is the timely completion of the EU co-funded infrastructure projects.
As organisations are largely still preoccupied with completing projects from the last EU funding period, contractors complain that there are too few projects in the current funding period. Many worry that the delay in tendering may not only endanger the financial stability of construction companies, but could jeopardise projects scheduled for completion in 2020 under the current MFF. A worst-case scenario would be having to pay back to the EU funds already budgeted because of missed deadlines.
An unexpected threat arises from PKP’s calls to create an integrating holding structure encompassing infrastructure manager PKP PLK. Much of the positive development of the Polish railway market is due to the effective independence of PKP PLK, which leads to neutrality vis-à-vis the train operators and provides a level playing field for incumbents and new entrants alike. Should calls for railway reintegration find support in the government, it would put this well-functioning market at risk.
Finally, the current poor performance of the Polish economy poses a threat to rail growth. While increasing demand for rail services, especially freight, was driven by the steady rise of Poland’s GDP, the current slump could jeopardise growth should the trend stabilise.