Poland Wants Its Planned Airport to Be a European Gateway to Asia

(Bloomberg) -- Poland is banking on booming passenger and cargo traffic to help turn its planned transportation hub into a key European gateway to Asia and is open to looking for partners in the far East to help finance it.

The European Union’s largest eastern economy plans to plow as much as 35 billion zloty ($9.4 billion) by 2027 into building a 45-million passenger airport, making it the largest transportation hub in central and eastern Europe. Adding planned train and highway links to the first stage could double the final initial cost. The project is set to be “the biggest undertaking in Poland’s modern history,” even before planned later extensions that would put it at a par with the U.K.’s Heathrow Airport, the largest in Europe.

“The plan is to create a hub for the region’s passengers, who now have to travel through Germany, France or the U.K. when they go on longer flights,” Deputy Infrastructure Minister Mikolaj Wild, the official in charge of the project, said in an interview in Warsaw on Friday. “One of the biggest advantages of the airport, and Poland as a country, is to be located on the eastern flank of the EU. We’re the gateway from the EU to the east and the other way round.”

The planned airport, to be situated 45 kilometers from the capital, has drawn criticism from the opposition parties as well as from Michael O’Leary, who runs Ryanair Holdings Plc - Europe’s biggest low-cost carrier. O’Leary has said Poland doesn’t need a “shiny cathedral in the middle of nowhere” to service the growing number of airline customers.

Great Interest

Wild counters O’Leary’s argument by saying the project will be profitable with just two runways, one terminal and the necessary links. As the air and rail hub alone will cost as much as $5 billion in the first stage, the government may need to look for minority investors.

“The Asian expertise in greenfield airports can’t be underestimated” and that’s why “it’s natural to look for partners out there,” according to Wild. Countries like South Korea and Singapore are “very good at building and managing airports – it’s like a national sport for them,” he said. There are also “many” potential partners for the political, and not only business, cooperation because the hub may be considered as a geopolitical project due to its sheer scale, the deputy minister said.

While it’s too early to reveal the details, the government has seen “great interest” from financial institutions, including from infrastructure funds willing to buy a stake, according to Wild. Polish state development fund PFR is considering becoming a partner, he said. The government will tap budget resources, debt and EU funds to finance the plans.

Eventually, the goal is to expand the airport by two more runways and two terminals to service as many as 100 million passengers. The additional 40 billion zloty is needed to connect it by rail with more cities. In the final stage, 70 percent of all long-haul trains in Poland would pass through the airport. Even as the hub won’t be able to compete for passengers with the largest European airports, such as Amsterdam’s Schiphol, it could become its direct rival for cargo such as perishables, of which the CEE region is a major supplier.

The railway component is “much sounder than in other comparable investments,” Wild said. “It will be like combining the Berlin Hauptbahnhof and let’s say an airport of the size of Gatwick.”

©2018 Bloomberg L.P.