One of the key reasons for delays in infrastructural investments, such as motorways, railway lines or the underground, are delays in procurement and purchasing processes. The major cause of impediments is the traditional approach to contracting in the investment processes, which limits the possibility of actual control over cooperation between the Contractor and Subcontractors.

50% of delays occur at the stage of purchasing

The most well-known infrastructural undertakings, such as the construction of the 2nd underground line in Warsaw, motorways or railway lines, are being hindered for the same reason – 50% of delays occur at the stage of the purchasing process and tenders.

Based on the largest investments co-financed from the European Union funds:
Numbers

 

 

  • The 2nd underground line in Warsaw
  • A1 motorway – section: Pyrzowice – Maciejów – Sośnica
  • A1 motorway – section: Toruń – Stryków
  • S8 road – section: Walichnowy – Łódź
  • A4 motorway – section: Tarnów – Rzeszów
  • A4 motorway – section: Rzeszów – Korczowa
  • S2 road – section: Konotopa – Puławska
  • The Liquefied Natural Gas Terminal in Świnoujście
  • S17 road – section: Kurów – Lublin – Piaski
  • E 30/C-E 30 railway line modernisation, section: Kraków – Rzeszów

 

The delays occur mainly at the stage of contract award and subcontractors selection. This could be due to the lack of control over the investment completion schedule, insufficient quality of communication on prolonged time of tenders organised by the General Contractor and on the timeliness of works to be completed by Subcontractors, as well as due to distributed information about all Subcontractors.

In the opinion of the Supreme Audit Office (NIK)

The audit carried out by NIK also shows that the main irregularities and problems with spending the European Union funds arise due to the delays in tenders and investment projects as well as irregularities in tender procedures. This problem was brought up, among others, in the report on “European Union funds’ spending within the framework of financial perspective for 2007 – 2013, as audited by the Supreme Audit Office”.

Lack of control means global losses

The costs related to irregularities in the investment processes result in financial losses of the entire enterprise. Lost revenues, guarantee costs, the risk of grant repayment, credit interest – are only a few examples of consequences to be faced by an organisation.

Verification is the key to success

Considering the common risks, a standard assumption should be to control the processes at all stages of the investment, from the purchasing processes and design to final implementation. An ongoing verification of the scope of performed services, incurred costs and financial flows allows for an early identification of risks and introduction of remedial procedures. If we want to have motorways on time, we need to find the system that will be responsible for the control and completion of the processes.

To sum up, an investor should have an influence, or at least full information, on subcontractors who carry out his investment. The objectives mentioned above should be met not only at the stage of subcontractors’ selection but also at the stage of the contract performance. In the latter case, the provisions of the Public Procurement Law can be supportive. The penultimate amendment to the Act introduced provisions relating to the list of subcontractors approved by the awarding entity, and the same applies to contracts concluded with contractors.

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