BMI's Executive Summary

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Poland faces a series of key decisions affecting its status as a transit country for oil and gas pumped through pipelines. As a traditional conduit for Russian oil and gas moving west to European consumers, the country must deal with a series of new threats and opportunities. Warsaw believes that the Northern European Gas Pipeline (NEGP) project – to build a pipeline under the Baltic linking Russia directly to Germany – is a definite threat. To the south, it sees an opportunity: in alliance with Ukraine, it aims to reverse the current flow of the Odessa-Brody oil pipeline, opening up a route for non-Russian Caspian oil to be pumped through Poland up to Gdansk and onwards to Western consumers.

At the end of 2006 Deputy Economy Minister Piotr Naimski said the government would not allow further privatisation of state-run natural gas monopoly PGNiG. The conservative Law and Justice party, part of the centre-right ruling coalition at the time, argued that PGNiG was a strategic asset and that further privatisation of the company could be dangerous to Poland's energy security. Naimski said Poland would press ahead with plans to diversify its energy supply taking natural gas from Norway via a series of pipelines crossing Swedish territory from the beginning of 2011. He said the gas would enter Poland at a new gas terminal to be built either at Gdansk or Swinoujscie, both ports on the Polish Baltic coast, at a cost of several hundred millions of euros. A brief interruption of Russian oil supplies through the Druzhba pipeline in January 2007– the result of a dispute between Russia and Belarus – served to remind the Polish authorities of the supply risks they face. Overall, it is a complicated picture, but in our newly released Poland Freight Transport Report, BMI concludes that oil and gas pipeline throughput will grow by an average of 5.1% per annum in 2007-2011, a little down on the preceding period. We think there will be something of a transition period as Poland tries to diversify its oil and gas supplies away from excessive dependence on Russia.

Various factors underpin our forecast. While there is a high degree of volatility in what could be called ‘pipeline geopolitics', we think that it remains in Warsaw's long-term interest to strike a deal with Russia, on the one hand, while diversifying pragmatically on the other. Poland's own economy is expected to grow at an average of 4.9% per annum over the next five years, providing a base line of energy demand that will also contribute to pipeline usage.

Our overall forecast for freight carried in Poland is for continuing moderate recovery based on the country's good economic growth rate. The transport sector still has to play catch-up, however, given infrastructure limitations in road and rail. We expect annual average growth in freight carried across all modes, measured in million tonne km (mntkm), of 4.1% during the forecast period of 2007-2011. We see the best performing sector being airfreight, which with annual average growth of 9.7%, will benefit from the global recovery in the aviation industry, the spread of low-cost airlines and increasing integration with European Union (EU) partners. Plans to part-privatise Poland's national carrier, LOT Polish Airlines, may also attract new investment. In maritime freight we are forecasting that new investment in Gdansk port will feed through. Freight traffic carried by ship will grow by an annual average of 6.9%. Road haulage will grow by 6.6% per annum. Here, we think strong and growing demand for haulage will continue to be held back by the slow rate of improvement of Poland's highway network. Finally, rail freight will grow by an annual average of 5.5%, as the process s of reform and deregulation gradually begins to take hold.

Poland has a composite score of 43 (out of a theoretical maximum of 70) in our freight transport Business Environment Ranking. The country scores well on long-term political and economic risk, and on the regulatory and competitive environment. On the other hand, freight transport growth and infrastructure are areas of relative weakness. BMI forecasts that the total value of transport and communications GDP will rise to US$46bn in nominal terms by 2011, representing 8.3% of Poland's GDP. The transport and communications sector employed 823,000 people, or 6.0% of the labour force, last year. We see that figure staying roughly constant to 2011.

Competitive Landscape for Europe Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of European Freight Sources

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BMI's European Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: