Polish Companies ‘Let Go’ of USD 25 Billion

March 27, 2013

Jacek Kowalczyk Puls Biznesu Newspaper

Within the framework of investment projects financed by the World Bank (WB) every year there are about 100 thousand various tenders  announced for the private sector. It is a huge market, worth USD 25 billion (PLN 80 billion) annually. However, companies from Poland have a very small share of this global pie.

‘On average, in a year Polish enterprises are awarded…. 12 contracts, predominantly on domestic market.  Polish companies are practically invisible on that market abroad’, says Xavier Devictor, WB Country Manager for Poland and the Baltic Countries.   

Few winners

According to WB data, in 2007-12 about 600 thousand contracts were signed worldwide, and only 20 of those contracts were the ones awarded to Polish companies abroad. The biggest number of contracts were signed in the Ukraine (11), and the rest in Serbia, Bulgaria, Romania, but also in  Armenia and the Republic of Burundi.

‘Polish entrepreneurs should understand that the contracts financed by the World Bank and executed outside of Poland are a great opportunity.   The potential of this market is underestimated’, says Xavier Devictor.

Potential profits can be reaped by companies from all the sectors, practically.  Government agencies and the ministries which implement WB-financed projects commission everything – from large road contracts worth millions, through delivery of vaccines or school benches, through business services – ICT projects, expert opinions, advisory services. Virtually anyone can bid in a tender.

‘Each company can submit a bid, but to be awarded a contract, the bidder must prove that they are able to meet the terms of contract, i.e. that they have the experience, the equipment and the personnel required to execute the project’, says Xavier Devictor.

Behind Tanzania and Benin

WB Country Manager for Poland admits that there is a lot of competition in bidding. Polish companies have to compete against companies from all over the world. However, Polish companies are awarded WB tenders in Poland and win against the competition from Germany, France and other countries, so they might as well be the winners abroad.

‘If Polish enterprises are competitive domestically, they are competitive everywhere.  Our bidding rules are always equal for everyone’, says Xavier Devictor.

In his opinion, Polish companies are not awarded contracts in foreign tenders financed by the WB not because those companies are weak, but because they do not give it a try.

‘Obviously, African markets are rather abstract for Polish firms. Poland does not have such links with those countries as France, for example. But for Korea, Africa is also a very distant market, and yet the number of contracts awarded to Korean firms in Africa is 20 times higher than the number of contracts awarded to companies from Poland’, says Xavier Devictor.

He gives an example: in terms of the number of contracts awarded in the health sector, Polish companies are ranked 31st, right after Benin. Companies from El Salvador execute four times more contracts, and the companies from Tanzania twice as many as the companies from Poland.

‘One could hardy call Benin, El Salvador or Tanzania marker leaders in that regard. I am sure that in that context Polish companies have absolutely nothing to be ashamed of’, says Xavier Devictor.

" Something is missing: Polish companies are awarded only one out of each 30 thousand contracts financed by the World Bank outside of Poland. Not because the companies are weak, but because they do not even try "

Xavier Devictor

World Bank Country Manager for Poland and the Baltic Countries

A well-trodden path

WB representative claims that bidding procedure is not complicated. Formally, the WB is only the provider of capital, and the government of the country in which the project is carried out is the client. At the same time, however, the bidding and contract execution are done according to the procedure adopted for all WB-financed projects all over the world. Regardless of the fact whether the tender takes place in Poland or in Tanzania, the procedure looks the same. In the case of construction works and supply, International Competitive Bidding is the basic model, and in the case of consulting services, it is the Quality- and Cost-Based Selection.

‘This procedure is relatively simple and transparent, once you have dived deeply into it. Polish companies should have no problems with that. Since they successfully absorb EU funds, they should have no problems with our system’, says Xavier Devictor.  

The procedure is designed to protect contractor’s financial security. However exotic the country in which the tender is placed, international standards and good practices are adhered to.

‘The WB carefully verifies whether the client conducts the procedure in line with our guidelines, so the process is transparent and there is no room for dishonest or unfair practices’, says Xavier Devictor.

Finally, language should not represent a barrier. In most cases, tenders are conducted in English, though sometimes there are procedures in French and in Spanish.

Paweł Świerczek, Vice President of MGGP

We are involved in two WB projects in the Ukraine. The first project consists in taking aerial photographs for the photo map of four Ukrainian regions, and the other one involves advisory services in enfranchisement of land users. In both cases our experience has been excellent. The projects are very interesting, and, most importantly, they give us a lot of financial security. Even though the projects are implemented in the Ukraine, where payments can be somewhat of a problem at times, in this case the World Bank is supervising the entire transaction, making sure that the transfers are made one time and in the pre-agreed amounts. Bidding procedure is not complicated, it is similar to Polish Public Procurement Law. 

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