Attached we are sending you the JASPERS Independent Quality Review Report for the above mentioned project.

Transcription

1 To the attention of Mr Jerzv Solecki Director of the ERDF Department Marshall Office of the Silesian Voivodeship ul. Ligonia Katowice Poland Luxembourg, 13 December 2016 SG/AS/JASPERS/ /AA/HG/mla Subject: JASPERS Independent Quality Review Report for the project Construction of the Regional Road Racibórz-Pszczyna on the section running through the City of Rybnik - stage I (JASPERS No PL IQR ROD) Dear Mr Solecki, We thank you for the good co-operation on the project Construction of the Regional Road Racibórz- Pszczyna on the section running through the City of Rybnik - stage I with our JASPERS team. Attached we are sending you the JASPERS Independent Quality Review Report for the above mentioned project. We thank you for your support and remain with best regards, A. A magro Director of JASPERS H. Goldsmith Acting Head of IQR Division Enclosure: IQR Report for PL IQR ROD Construction of the Regional Road Racibórz-Pszczyna on the section running through the City of Rybnik - stage I project JASPERS c/o European Investment Bank , boulevard Konrad A denauer L-2950 Luxem bourg V (+352) (+352) w w w.jaspers-europa-info.org c» jaspersiaeib.org

2 INDEPENDENT QUALITY REVIEW REPORT The independent experts declare that: 1. They have fulfilled the requirements o f Article 23(2)(b) o f Commission Delegated Regulation (EU) N o 480/ They have appraised the project in accordance with all the criteria set out in Annex II to that Regulation. Member State Republic o f Poland Region and project location Silesia, City o f Rybnik Project name C onstruction o f the Regional Road Racibórz-Pszczyna on the section running through the City o f Rybnik - stage I (Rybnik bypass road) Beneficiary City o f Rybnik Managing Authority Independent experts reference M arshal O ffice o f the Silesian V oivodeship PL IQ R R O D Task Manager: Signature and Date: Pawel Malinowski Head of IQR Division: Hugh Goldsmith Signature and Date: ll^ li In agreement with: A. Almagro f t\ Head o f JASPERS \ J ) J\Ato> D is c la im e r 'ITiis JASPERS Independent Quality Review Report has been prepared at the request o f the relevant Managing Authority in Ime with Articles 101 and o f the Regulation (KU) N o 1303/2013. It presents a quality review o f the major project based on inform ation made available to JASPERS. In case the inform ation used for the project notification has been changed after this review, the reader o f this report should be aware that som e o f th e statem ents and justifications expressed m ay no longer be valid. 1

3 Glossary: AADT BCR Birds Directive CBA CBA Methodology CC Annual Average Daily Traffic Benefit to Cost Ratio Council Directive 2009/147/EC on the conservation of wild birds Cost-benefit analysis The methodology for Cost-Benefit Analysis as defined in Annex III to the Implementing Regulation Climate Change CDR Commission Delegated Regulation (EU) 480/2014 CIR Commission Implementing Regulation (EU) 2015/207 CO 2e Carbon Dioxide Equivalent CPR Common Provision Regulation (EU) 1303/2013 DK DW EU EIA Directive EIB ERDF FIDIC GHG Habitats Directive ISPA MA MoE NUTS NTS O&M ROP PIU SEA Directive National Road Voivodeship (Regional) Road European Union Council Directive 2011/92/EU on Environmental Impact Assessment European Investment Bank European Regional Development Fund International Federation of Consulting Engineers Greenhouse gases Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora Instrument for Structural Policies for Pre-Accession Managing Authority Ministry of Environment Nomenclature for Units of Territorial Statistics Non-Technical Summary of the EIA Report Operations & Maintenance Regional Operational Programme Project Implementation Unit Council Directive 2001/42/EC on Strategic Environmental Assessment This IQR Report is based on the following groups of documents that were received from the Managing authority (MA): Document Document date (final version) Information on major project, including Feasibility Study documents and Economic and Financial analysis spreadsheets prepared in PLN 07/11/2016 Environmental documentation 07/11/2016 Action Completion Note of JASPERS 27/10/2016 PART A of the Notification Form in draft 25/11/2016 In addition the MA supplied various written responses to requests for clarifications from JASPERS. The project has previously received assistance from JASPERS Advisory and a JASPERS Action Completion Note has been issued. 2

4 Please confirm that all of the following conditions are fulfilled: the operation is a major project within the meaning of Article 100 of Regulation (EU) No 1303/2013; the major project is not a completed operation within the meaning of Articles 2(14) and 65(6) of that Regulation; the major project is included within the relevant operational programme(s). Yes Put x where appropriate X Give details The project complies with the major project definition laid down in Art. 100 of Regulation (EU) No 1303/2013, as: The project is an indivisible task of a precise economic and technical nature, with clearly identified goals. This major project, named Stage I, forms the core of the Southern road bypass of Rybnik. A further extension of the road bypass, named Stage II, is planned to be completed in the current ( ) programming period as a non-major project. Stage I is not dependent on Stage II for its economic viability; and The project s total eligible cost is EUR 92,224, Eligible costs exceed the amount of EUR 75,000,000. The major project is not a completed operation within the meaning of Articles 2(14) and 65(6) of Regulation No 1303/2013, as the timetable for implementation envisages end of construction by June The project is included in the list of major projects to be implemented under the Regional Operational Programme of Silesia (CCI 2014PL16M2OP012, hereinafter ROP of Silesia ). This major project has been selected by the Managing Authority through a competitive process according to the principles defined in the ROP of Silesia No 1. THE BODY RESPONSIBLE FOR IMPLEMENTATION OF THE MAJOR PROJECT, AND ITS CAPACITY Summarise relevant information on the body responsible for implementation of the major project, and its capacity including technical, legal, financial and administrative capacity. The main beneficiary of the project is the City of Rybnik, which is a local government unit responsible for the provision of the regional road infrastructure on its territory. The city oversees the preparation, construction, operation and maintenance of regional roads within its borders. The neighbouring City of Żory is the partner of the City of Rybnik in this project, because part of the constructed road infrastructure will be located on the territory of the City of Żory. Technical capacity The Roads Department of Rybnik City Office is a specialised unit responsible for new road investments and maintenance of the road network within Rybnik, and will be responsible for project implementation in line with applicable national standards for roads of this capacity. The department has 22 suitably-qualified staff with considerable experience in implementing road projects; over the last decade, it oversaw the implementation of roads projects in the vicinity of Rybnik. Several of the staff working for the Roads Department has experience in overseeing large, complex construction projects. 3

5 In case of the maintenance of the section of DW935 road constructed on the territory of the City of Żory, a specialised road department of this city will oversee maintenance and any future rehabilitation of this road section. The construction supervision over the investment and the core construction works will be entrusted to external companies with adequate competence and experience. Legal capacity The City of Rybnik is a city with the rights of powiat (equivalent of a county). Based on Article 19 (5) of the Act on roads the President of the City is responsible for the management of all public roads, except for motorways and express roads. The constructed road section will be a voivodeship (regional) road, and therefore the relevant local government unit (a city with county rights) will be responsible for all investments. In view of the fact that a part of the investment will be implemented within the area of another city, i.e. Żory, both local government units concluded an agreement based on Article 74 of the Act on local self-government, in which the City of Żory delegated to the City of Rybnik the necessary rights to implement the project. Both cities will share the costs of the investment. The land for the voivodeship road, in accordance with the relevant provisions of the law, shall be purchased by the Beneficiary on behalf of the Silesian Voivodeship. The land associated with accompanying infrastructure shall be owned by the local government unit and in this case is already in the possession of the Beneficiary. Financial capacity To enable it to financially implement the project, since 2012 the City of Rybnik has been reducing its debt by running operational surpluses (meaning operating expenses have been significantly lower than income). In operational surplus ranged from PLN 69 million (EUR 16.4 million) to PLN 97.6 million (EUR 23.1 million), which placed Rybnik amongst the bestperforming cities in Poland. Fitch Ratings in July 2016 confirmed the City of Rybnik s rating of A+(pol) with a stable outlook. The City has sufficient debt capacity to draw and service the debt required for financing the investment. The City of Żory will participate financially in the investment and the maintenance of the road DW935 section on its territory (length of 425 m, approx. 4.2% of the length of entire project). Administrative capacity The beneficiary has significant experience in the implementation of infrastructure investments. Over the last 15 years, the City of Rybnik implemented over 90 investment projects co-financed by the external funds (including financed from the European Union structural funds). Almost 20 of these investments were related to the construction or reconstruction of public roads. The City of Rybnik has already successfully implemented investment projects of a similar scale. In the years the project "Construction of sanitary sewage in municipalities of Rybnik Gaszowice, Jejkowice, which loads the upgraded sewage treatment plant in Rybnik of total cost of EUR 122 million was implemented with the support of ISPA and later the Cohesion Fund. The Project Implementation Unit was formed in 2013 as a special interdepartmental team of specialists in the City administration appointed for the project implementation and management. The 1st Deputy of President of the City, supervising over inter alia the Roads Department, was previously employed on managerial positions in General Directorate for National Roads and Motorways and has significant experience in the preparation and implementation of large infrastructure projects. 4

6 Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (CDR) EU No 480/2014. No There is sufficient evidence of the capacity of the beneficiary (City of Rybnik) to manage the project in the implementation and operational phases, considering that: The City of Rybnik has sufficient technical capacity and experience with the implementation and operation of road projects. The beneficiary has the necessary legal rights to implement and operate the project. Land plots necessary for the project implementation are already available to the Beneficiary. The beneficiary has sufficient financial capacity to implement and operate the project. The funds for project implementation have been allocated by the City of Rybnik in its multiannual budget in amount of PLN million (EUR million) in years Planned annual expenditure on O&M of the project amounts to about EUR 357 thousand and constitutes ca. 0.2% of the total City s budget and 24% of the resources available for maintenance of the road network (EUR 1.5 million in 2016), and therefore will lead to a significant increase in the total annual road maintenance budget of the City, but not a significant increase in the overall City budget. The planned capital expenditure for periodic rehabilitation, replacement or reconstruction of the road in 2031 and 2041(of EUR 3.3 million each) is expected to be allocated in future annual budgets. The City of Żory committed in form of agreement with the City of Rybnik to participate financially in the implementation of the project proportionally to its part of the road, and will provide budgetary funds for its maintenance. The investment and maintenance costs associated with this investment will not constitute a significant financial burden to the City of Żory. The beneficiary has sufficient administrative capacity to execute the project. The proposed organisation of the project implementation and the staffing structure is adequate to the scale of the investment. 2. DESCRIPTION OF THE INVESTMENT AND ITS LOCATION Summarise relevant information on the description of the investment and its location. Existing situation Rybnik is a city of about 140,000 people in the south-western part of the Silesian Voivodeship. About 6 km to the east of Rybnik lies the A1 Motorway, which is a main north-south corridor through Poland that links the main port of Gdansk in northern Poland to Slovakia, via Torun, Lodz, Czestochowa and Katowice. The existing link between Rybnik and the A1 the regional road DW935 is a highly-urbanized single carriageway (1x1) road, carrying some east-west traffic (e.g., from Rybnik to neighbouring Żory), as well as a substantial number of goods vehicles and personal cars wishing to access the A1 motorway. 5

7 During peak times the road is congested leading to low average speeds and long delays. The existing DW935 road has many at-grade junctions, pedestrian crossings and accesses (to houses and shops and public buildings), which negatively impact on safety, reliability and performance. The annual average daily traffic (AADT) varies by section but in 2015 reached a maximum of about 26,000 well above the design capacity of the existing road. Main project components The project involves the construction of about 10.2 km of dual carriageway (2x2) road with a total of 5 grade-separated interchanges. The project will link the A1 motorway with the DK78 to the southwest of Rybnik. An additional link from the DK78 to the DW935 to the west of Rybnik (section V, see map below) is scheduled to be completed before Together these links will form a complete east-west (DW935) bypass of Rybnik (see map below). Map 3. Voivodeship road DW935: planned section alignment (red); existing alignment (blue) Additional section V, not in this notification Planned sections I to IV forming this project Source: Feasibility Study The project will divert most of the medium-long distance traffic on the DW935 away from congested urban roads in Rybnik to a higher-speed but safer dual carriageway with median barriers separating opposing flows and with accesses limited to junctions which on average are spaced about 2km apart. The new road and its grade-separated interchanges will provide efficient access to Rybnik for local traffic, and avoid the need for travelling on the existing unsafe, congested DW935 road in Rybnik (see blue line on map above). The project will comprise: construction of km of dual carriageway road; construction of 5 grade separated interchanges; construction of auxiliary engineering structures (e.g., bridges and viaducts); (re)construction and realignment of nearby roads; relocation of utilities; additional associated infrastructure (e.g., drainage, road lighting, safety barriers, noise barriers); and road safety measures. The majority of the road will lie within the Rybnik municipality; however a small section of about km lies within Żory administration (see map above). The project is one of a series of improvements anticipated on the DW935 corridor between Raciborz and Pszczyna. 6

8 Eligibility The project will be funded by the European Regional Development Fund (ERDF) through the ROP of Silesia, The project is consistent with the objectives and purposes of Priority Axis VI of the OP and action 6.1 (i.e., Improved availability of Voivodeship roads ). The project is proposed under the thematic objective 07 Promoting Sustainable Transport and Removing Bottlenecks in Key Network Infrastructure, and is located in NUTS III location code PL227. The project has not yet been completed. Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review set out in Annex II to CDR (EU) No 480/2014. No The project is located in the Silesian Region of Poland and is therefore within the area covered by the ROP of Silesia The area is eligible for ERDF Financing. A sufficient project description is provided accurately describing both the existing situation and the chosen technical solution. The project complies with the eligibility rules set down in Regulation (EU) No. 1303/2013 such as Art. 65 (Eligibility of Expenditure and Durability) and in the Cohesion Fund Regulation No. 1301/2013, mainly Art. 3 (Scope of Support from the ERDF). The project exceeds the total eligible costs (after taking into account revenue generation) threshold of EUR 75 m and is therefore correctly considered a major project. The Managing Authority has confirmed compliance of the project costs with national eligibility rules. 3. EXPLANATION AS TO HOW IT IS CONSISTENT WITH THE RELEVANT PRIORITY AXES OF THE OPERATIONAL PROGRAMME(S) CONCERNED, AND ITS EXPECTED CONTRIBUTION TO ACHIEVING THE SPECIFIC OBJECTIVES OF THOSE PRIORITY AXES AND THE EXPECTED CONTRIBUTION TO SOCIOECONOMIC DEVELOPMENT Summarise relevant information on project objectives and its consistency with the relevant priority axes of the operational programme or operational programmes concerned, and its expected contribution to achieving the specific objectives and results of those priority axes and the expected contribution to socioeconomic development of the area covered by the operational programme, and measures taken by the beneficiary to ensure optimal utilisation of the infrastructure in the operation phase. Project objectives The main project objectives are to: provide a fast and safe connection from Rybnik to the A1 motorway; remove traffic from the current congested and unsafe DW935 road through Rybnik; improve the attractiveness of Rybnik city for investment; 7

9 reduce the harmful impacts (e.g., emissions, noise, health impacts) of road traffic on occupants of Rybnik; and improve the safety of the road transport system. These objectives are consistent with the priorities of the ROP of Silesia , in particular Priority Axis VI (transport) which has as an investment priority to enhance regional mobility by connecting secondary and tertiary nodes to TEN-T infrastructure, including multimodal nodes. The project will contribute to the following Priority Axis result indicators: No Indicator Unit Target (2023) This project CO13 Total length of new roads km Contribution to socio-economic development of the area covered by the OP Once implemented, and in line with the overall objectives of the ROP of Silesia , the project is expected to contribute to the socio economic development of Rybnik city and surrounding areas by: reducing travel time and transport costs between Rybnik and the A1 motorway; directing cars and heavy goods vehicle traffic away from the existing congested DW935; reducing the number and severity of road accidents in Rybnik, and reducing the negative impacts of emissions of both non-greenhouse gases such as particulate matter (which negatively impact on local health), and greenhouse gases (GHG) on the residents of Rybnik. The project will also help attract new investments by improving the liveability and working conditions for the local population; and add jobs during construction and operational stages of the project Measures taken by the beneficiary to ensure optimal utilisation of the infrastructure in the operation phase The new link between Rybnik and the A1 motorway will become the main route for traffic going east-west through Rybnik and for residents of Rybnik connecting to the A1. Optimal utilization will be ensured through the provision of high-quality access for all motorized transport free of charge and on an equal and non-discriminatory basis. Convenient accesses to various districts of Rybnik will be provided through provision of grade-separated interchanges which will minimize delays and queueing at junctions. The demand model predicts 11,400-22,200 vehicles will transfer daily to the new road, thus substantially reducing delays on the existing road. Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review set out in Annex II to CDR (EU) No 480/2014. No The project and its objectives are consistent with Priority Axis VI of the Operational Programme. The objectives are adequately defined for a project of this type. The proposed project will contribute to the objectives of the ROP of Silesia Once implemented, the project is expected to contribute to the socioeconomic development of the region by reducing: travel time and transport costs; and harm to the environment caused by both GHG and non-ghg emissions. Optimal utilization of the new link will be ensured by providing free access on a non-discriminatory basis to all motorized vehicles. 8

10 4. TOTAL COST AND TOTAL ELIGIBLE COST 4.1 Summarize relevant information on the total cost, calculation of costs both in terms of its overall cost to achieve the expected objectives and unit costs, and total eligible cost taking into account requirements of Article 61 of Regulation (EU) No 1303/2013. The estimated total cost of the project is EUR 102,646,028.59, of which EUR 92,224, represents the eligible cost. The only item presented as being ineligible is the part of land acquisition cost (EUR 10,421,597.40) that exceeds the limit of 10% of total eligible expenditure. VAT is considered eligible as VAT is non-recoverable by the City of Rybnik. Building and Construction Costs are estimated at EUR 67,163,800.01, of which EUR 44.45% is related to structures (10 viaducts, 2 bridges, 1 elevated road section). Presented costs are based on a pre-tender construction and supervision cost estimate of the Beneficiary. The construction cost per km for the entire project EUR 8.1 million per km incl. VAT reflects the high number of structures on a relatively short section of road (13 structures with a total length of 1291 metres on a 10.2 km section, including a 418.5m elevated section). The total project cost does not include any allowance for either contingency or price adjustment. Table: Summary cost estimate for the City of Rybnik stage I Cost Item Total Cost Ineligible Cost Eligible Cost 1. Planning / design fees Land purchase 19,644, ,421, ,222, Building and Construction 67,163, ,163, Demolition of buildings 689, , Road works, of which: 27,476, ,476, Earth works 4,532, ,532, Subgrade 11,405, ,405, Road surfacing/ top layer 7,369, ,369, Preparatory works 454, , Finishing works 4,785, ,785, Culverts 463, , Soil strengthening 2,955, ,955, Drainage 5,178, ,178, Lighting 17, , Energy networks 699, , Reconstruction of water supply networks 619, , Reconstruction of wastewater networks 417, , Reconstruction of gas networks 244, , Reconstruction of district heating networks 349, , Reconstruction of railway overhead lines 9, , Landscaping 419, , Traffic reorganisation/diversions 605, , Engineering structures (overpass, bridges, etc.) 29,394, ,394, Noise screens 1,041, ,041, Plant and machinery or equipment Contingency Price adjustment Publicity 9, , Supervision during constr. implementation 307, , Technical assistance Sub-TOTAL 87,125, ,421, ,703, (VAT) 15,520, ,520, TOTAL 102,646, ,421, ,224, The original cost estimate of the Beneficiary was prepared in Polish Zloty (PLN). The cost estimate was converted to EUR at the rate of PLN per 1 EUR. 9

11 Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review set out in Annex II to CDR (EU) No 480/2014. No Total costs and eligible costs are provided and calculated correctly taking into account requirements of Article 61 of Regulation (EU) No 1303/2013. Planning and design fees (approx. EUR 395 thousand) were correctly excluded from the eligible project cost as they were already co-financed from public resources. Due to the small value of this cost (0.4% of total project cost) its exclusion from the total project cost has marginal impact on the results of financial and economic assessment of the project; Total land acquisition cost of EUR 19,644, represents 19.1% of total project cost. Of this only EUR 9,222, has been presented as being an eligible project cost in order to keep within the limit of 10% of total eligible expenditure for the operation in question defined in Article 69.3(b) of Regulation (EU) No 1303/2013. The relatively high land acquisition costs are in part due to the need for acquisition of some builtup plots of land within urbanised area. No contingencies are provided for in the project cost estimate. This approach in effect transfers the risk of financing of any unforeseen works and services to the Beneficiary s municipal budget and remains a key project risk. The sensitivity analysis shows that the project would remain economically efficient (ENPV>0) as long as cost increases do not exceed 92%. Additionally, the City of Rybnik has considerable borrowing capacity to finance any increases in project cost, although this may limit the city s potential to implement other planned projects. VAT is non-recoverable and therefore has been correctly deemed to be an eligible project cost; and The initial results of the ongoing tender for supervision services (see section 9 for further details) provide higher supervision costs than in the estimate. The offers range between EUR million incl. VAT (also including a separate task related to 0.86km of the local connecting road financed from own city funds out of this project) which in any case means a higher cost of supervision related to the project than the anticipated EUR 0.3 million incl. VAT. Cost of supervision from the received bids is in range of % of total project cost, which is a standard cost of such service and is justified in this case. The overall cost estimate, except the likely higher cost of supervision by ca. EUR 0.4 million, is sufficient to achieve the expected objectives of the project. The rationale for calculation of the total costs is sufficiently detailed in the feasibility study. At the stage before finalising the tender of the work contract the cost estimate is reasonable compared to the observed costs of similar roads in Poland. Unit values for construction costs remain in the usually observed range for similar (2x2-lane) road projects in Poland (between EUR 6.4 and 15.2 million per km incl. VAT) and are sufficiently explained by the fact that the road runs through a quite densely populated area. 10

12 4.2 Provide information on compliance with State aid rules and how State aid rules have been taken into account in the calculation of the total public contribution to the project Please inform whether the independent experts, in accordance with Article 23(1) of Commission Delegated Regulation (EU) No 480/2014 or the Member State, have consulted the Commission on relevant State aid issues. If the Commission has been consulted, please provide the date and reference of consultation and the date and reference of the reply and summarize the result of the consultation. The independent experts did not consult the Commission on State aid issues with regards to this project If the Commission has not been consulted, please provide the following information: Do you consider that this project involves the granting of State aid? Yes No If yes, please explain on what basis compliance with State aid rules is ensured. Please provide this information for all groups of potential State aid recipients, for example, in case of infrastructures, for the owner, the constructors, the operator and for the users of the infrastructure. Not applicable If no, please explain in detail why you consider that the support does not constitute State aid. Please provide this information for all groups of potential State aid recipients (for example, in case of infrastructures potential aid recipients are: the owner of the infrastructure, the constructor, the operator and the users of the infrastructure) ( 1 ). If applicable, please indicate whether the reason why you consider that the project does not involve State aid is that (i) the project does not concern any economic activity (including activities in the public remit) or that (ii) the recipient(s) of support enjoy a legal monopoly for the relevant activities and are not active in any other liberalised sector (or will keep separate accounts in case the recipient(s) are active in additional sectors). The public support to the project The project involves financing the construction of road infrastructure with use of public resources in form of a grant from the European Regional Development Fund provided to the City of Rybnik (acting as an investor also on behalf of the City of Żory) under the ROP of Silesia The beneficiaries of funds are the City of Rybnik and the City of Żory, both local government bodies. According to the law, such local governments are responsible for the investment and maintenance of all roads on its land, with the exception of motorways and express roads. The City of Rybnik and the City of Żory are therefore exclusive owners and managers (operators) of the regional road on their territories. The cost of operations and maintenance of the regional road will be financed entirely from the cities respective budgetary resources. The existence of state aid The project concerns the provision of regional road infrastructure, which by Polish law is made available free of charge to all users (non-tolled public road), and therefore will not be commercially exploited. At the level of the owner and operator (both roles played by the City of Rybnik and City of Żory that are public administration bodies) the construction, operation and maintenance is one of their basic tasks granted by the legislator to the public authority on the appropriate level. The state aid can be excluded as there will be no transfer of public resources to an undertaking and this task is not regarded an economic activity. At the level of contractors, there will be no distortion of the competition as all contractors of the studies, documentation, and the works were or will be selected in public tenders in accordance with Polish public procurement law. At the level of infrastructure users, there will be no distortion of competition as the road infrastructure build in this project will be available free of charge and on an equal and non-discriminatory basis to 11

13 all users. On the basis of the above, the project does not involve State Aid at the level of any of the stakeholders. Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review set out in Annex II to CDR (EU) No 480/2014. No The process of identifying and addressing the state aid in the project was correctly carried out by the Beneficiary. The beneficiary provided sufficient evidence that public support to the project does not constitute State aid. The Beneficiaries (City of Rybnik and City of Żory) is a public body which holds public authority for the construction and management of regional roads available to all potential users. The State Aid has been correctly taken into account in the calculation of the total public contribution to the project. State Aid considerations did not affect the calculations of the public contribution to the project (Article 61.8 of the CPR does not apply). ( 1 ) The Commission services provided guidance to Member States to facilitate the assessment when infrastructure investments may involve State aid. In particular, the Commission services have prepared analytical grids. A Communication on the notion of aid is currently in preparation The Commission invites Member States to make use of the analytical grids and of the future communication for explaining why it is considered that the support does not involve the granting of State Aid. 5. FEASIBILITY STUDIES CARRIED OUT, INCLUDING OPTION ANALYSIS, AND THE RESULTS 5.1 Summarise relevant information on the feasibility studies carried out and the results under the following aspects: institutional, technical, environmental including climate change (if relevant) and other aspects. The Feasibility Study for The construction of the Regional Road Racibórz-Pszczyna on the section running through the City of Rybnik stage I was carried out by an external consultant (dated September 2016). Institutional aspects Under Polish law, the cities with powiat (county) rights are responsible for the provision and maintenance of regional roads on their territories. In this case the City of Rybnik is the only relevant public authority entitled to implement the project and to become an owner and an operator of the new road infrastructure. The same applies to the road section on the City of Żory territory (425 m long). There is no other practical institutional alternative to implement the project. Both cities established special partnership in order to prepare and implement the project jointly. The City of Żory delegated specific necessary powers to the City of Rybnik in line with the national law for the purpose of project preparation and implementation. In the operational phase the cities will maintain road sections on their territories separately. Both cities have dedicated specialist departments in charge of overseeing the road networks, however for the purpose of this project implementation the supervision will be contracted 12

14 externally. The construction works will be delivered by an external contractor selected in a competitive tender in line with Polish public procurement law. Technical aspects The feasibility study considered numerous technical aspects of the project, including its basic technical and functional parameters also considered in the options analysis. The process of designing of the roads in Poland considers obligatory standards, regulations and guidelines as well as technical specificities of the location of the investments (conditions of water-soil) and the possibility of occurrence of natural disasters characteristic for particular area of Poland. The investment shall be implemented in an area strongly transformed by human activity e.g. extractive industries. For this reason, when designing the road, it was necessary in this case to apply additional protection against the so-called mining damage and to provide grade separated crossings with dense roads network of lower category and railway lines. The selected alignment of the road was avoids dense aggregations of residential buildings and allows safe and quick access to the axis of A1 motorway - national road DK78. The project is not in an area prone to natural disasters. The constructed road will form a part of an important regional road corridor (from Racibórz to Pszczyna) and the future role of this road in the road network system of Silesia has been considered. The road will be connected to the existing road network without duplication of infrastructure. In order to adjust the road to the expected demand the road is planned to be built as a dual carriageway road with two lanes in each direction (2x2 with a separating strip) in line with the class GP road. Detailed technical parameters are presented in Section B.3 of the Part A of the notification form. Junction design was considered as part of options analysis and considered different solutions that were finally decided upon the basis of traffic fluidity considerations. For the design and implementation purposes, the road was divided into the following sections: Task (section) I - a road section in the City of Żory (from Raciborskie Roundabout to the border of the Cities of Żory and Rybnik); Task (section) II - a road section from the border of the Cities of Żory and Rybnik to Gotartowicki junction in Rybnik, including the Gotartowicki junction; Task (section) III - a section from Gotartowicki junction to Chwałowicki junction, including the Chwałowicki junction; Task (section) IV - a section from Chwałowicki junction to Wodzisławski junction, including Wodzisławski junction; Task (section) V - a section from Wodzisławski junction to the intersection with Sport Street, including the intersection. This section shall probably be redesigned to reduce the road in Rybnik and earlier inclusion to Raciborska Street, i.e. an exit section DW 935 in Rybnik towards Racibórz. Tasks (sections) I-IV under the name "Construction of the Regional Road Racibórz-Pszczyna on a section running through the City of Rybnik - stage I" (major part of the bypass of the city of Rybnik) is the investment, which is the subject of this application and was selected by the Managing Authority for ROP of Silesia in a competitive process. For this stage, an economic and financial analysis was executed, and investment expenditures were estimated (in the following sections of this document). Task (section) V under the name Construction of the Regional Road Racibórz-Pszczyna on a section running through the City of Rybnik stage II is planned also to apply for funds for under the measure 6.1 ROP of Silesia (project is also considered on the list of projects in the Plan of expansion of the voivodeship roads in the Silesian Voivodeship ). Routine and winter maintenance will be carried out on an annual basis as appropriate for the road 13

15 class. An important periodic rehabilitation is scheduled for 2031 (11 th year of operations) and 2041 (21 st year of operations). Environmental, climate change mitigation and adaptation aspects For the EIA aspects of the project see Section 7.1. For the climate change mitigation, GHG emissions and adaptation aspects please see Section 7.2. Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review set out in Annex II to CDR (EU) No 480/2014. No The institutional setup for both the implementation and operational stages of the project, with the Beneficiary (City of Rybnik) and its partner in the project implementation (City of Żory) both operating the infrastructure on their territories, and being appropriate institutions to implement the project, follows a standard approach and is adequate and sufficient. Furthermore, City of Rybnik has successfully managed a large number of road projects and has adequate capacity to ensure project implementation and ongoing sustainability of project benefits. The facilities are designed using common international practice and adequate technology and reflect a solid engineering approach. The applied design criteria and engineering approach are therefore adequate to meet the project objectives. The investment does not create unnecessary excess capacity of the road network. The environmental and climate change aspects of this project are discussed in Section 7 of this report. 5.2 Summarise relevant information on the demand analysis (or business plan in case of productive investment). The demand analysis was based on modelling undertaken by the project consultants in 2015, using industry-standard and recognised traffic modelling software, PTV Visum. A total of 119 (internal and external) zones were used in the transport model, covering Rybnik municipality and adjacent areas. The demand model used is a typical four-stage transport model (with a 2015 base year), covering: trip attraction and generation; trip distribution; mode switch, and assignment. Traffic patterns data was sourced from available sources of information, including: available demographic data (e.g., population, employment, schools), traffic counts and origin-destination surveys. The demand modelling included separate consideration of: car travel; truck transport; public transport (buses, microbuses, and rail); and pedestrian transport. Demand was segmented according to trip purpose (e.g., commuting, school trips, non-home based trips). The supply network the representation of the physical transport network in the model was built taking advantage of available spatial datasets covering e.g., the road network (which included data on number of lanes and lane width, junction details), administrative boundaries, and the location of public transport stops. The public transport network in the transport model coded all public transport stops (bus stops, bus stations and train stations). The road network used in the 14

16 model included national roads, voivodeship roads and most of the county roads in the area, with each road link coded to include technical road type, speed limit (for cars, buses, and minibuses), capacity, and allowable vehicle types. The model was calibrated to ensure it adequately reflected the local situation, with changes to e.g., capacity and speeds on road links and speeds on rail network made to improve model s accuracy. After calibration the model provided a good fit, with coefficient of determination of The model assigned demand to modes of transport and paths according to travel time, using a standard mathematical logit function. Traffic forecasts were produced for six different years (2016, 2021, 2026, 2031, 2036, and 2041). The demand analysis was undertaken on the basis of the completion of the link between DK78 and A1 only (sections I-IV). Section V linking DW935 to DK78 west of Rybnik was not included in the demand and economic analysis, as it does not form part of the project. The table below shows forecasted development in AADT over the period for the with project scenario. The modelling predicts an initial traffic volume of 11,400-24,230 vehicles, rising over time to 13,660-27,050 vehicles. Traffic forecasts imply a modest growth rate of less than 1% per year over the reference period. Table: Traffic projections (AADT) on road DW935 in Rybnik in with project scenario, Year Scenario Żory roundabout city border 24,230 26,680 27,050 City border Gotartowicki interchange 21,420 23,850 24,110 Gotartowicki interchange Chwałowicki interchange 19,820 22,230 22,470 Chwałowicki interchange Śródmiejski interchange 20,000 22,440 22,740 Śródmiejski interchange Wodzisławski interchange 11,400 13,380 13,660 Source: project feasibility study Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project demand analysis meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014. No Demand modelling. The traffic modelling assessed the impact that completion of the Rybnik bypass would have on traffic flows and speeds on the main road network around Rybnik, using outputs from a 4-stage transport model. Model build, calibration and validation were undertaken in line with standard industry practice. Traffic forecasts are considered appropriate and are based on a conservative growth rate of less than 1% per year over the reference period. The demographic assumptions underlying the demand modelling are based on projections from the national statistical office. Dimensioning of facilities. The proposed capacity is appropriate to the projected demand, with 4-lanes considered reasonable given the projected traffic volume (which is expected to reach up to 27,000 vehicles per day within the reference period). The further extension of the DW935 to the west of the proposed project (planned to be completed before 2020) will add additional traffic and further strengthen the case for 4-lanes. 15

17 5.3 Summarise relevant information on the option analysis and selection of the best option. An option analysis has been undertaken for the project. A strategic option analysis was carried out in which two routes were studied (Options W1 in red and W2 in green, see map below); the option analysis covered a longer stretch of road than the current project s scope, the current project ends at the DK78 that runs South-Southwest from Rybnik (see also the map in Section 2 for the scope of the current project compared with the scope of the option analysis that was used in the current project.). Option W1 mostly follows the original alignment that had been defined in the zoning plan, whereas W2 would avoid built-up areas and forests more, and be bundled with railways lines no. 140 and 957 to reduce impact on the surrounding areas. Both options have an identical alignment on the section roughly from the Chwałowicki interchange until the viaduct over Ziemska street, as this alignment minimised the risk of mining subsidence caused by two adjacent active mine exploration areas (shown on the map as purple dashed lines above and below the road). The options were compared using multi-criteria analysis (considering socio-economic, environmental, geological and technical criteria), that showed Option W1 as the most favourable option mainly because it is less exposed to geological risks and uses less land than option W2 and that land had already been reserved for transport infrastructure in the zoning plan. Subsequently a technological option analysis was carried out for the five exits, where for each of them 3-4 exit layouts were analysed. The selected options were assessed to be the best of the analysed options, as they had the best overall score on the criteria of land occupancy, simplicity of solutions and subsequent minimisation of engineering structure required, traffic flow and (in the case of the Świerklański exit) a lower risk of mining subsidence. All selected options have adequate capacity for the expected demand. The climate risks of the different options were not specified; as most option analysis had been carried out in an early stage of project preparation, climate risk was not considered in the strategic option selection. 16

18 Give a clear statement whether or not the project meets the relevant criteria for quality review set out in Annex II to Commission Delegated Regulation (EU) No 480/2014 and justify this statement. Put x where appropriate Give a statement and justification Yes X The project meets the relevant criteria for quality review outlined in Annex II to CDR (EU) No 480/2014. No Strategic options have been compared for the Regional Road Racibórz Pszczyna on the section running through the City of Rybnik. Both options were compared using multi-criteria analysis (considering socioeconomic, environmental, geological and technical criteria), that showed Option W1 as the most favourable. Subsequently a technological option analysis was carried out for the five exit layouts, selecting the optimal layout for each of them. The project option analysis process started before 2014 and therefore climate change issues were not considered throughout all stages of its option analysis. Rather, the climate change adaptation vulnerability and risk assessment was carried out at the major projects application stage, which is adequate in this context. Overall it can be confirmed that the quality of the option analysis is adequate, the main alternatives have been analysed, and the analysis sufficiently justifies the technical solution to be implemented. The selected type of road best meets the project traffic demand. 6. A COST-BENEFIT ANALYSIS, INCLUDING A FINANCIAL AND AN ECONOMIC ANALYSIS, AND A RISK ASSESSMENT 6.1 Summarise relevant information on the financial analysis, including the main indicators of the financial analysis i.e. FRR and FNPV, calculation of net revenue and its result, tariff strategy and affordability (if applicable), and financial viability (sustainability). Approach to the financial analysis The financial analysis of the project (effectiveness, net revenue generation and sustainability) was done for the investment as defined for this application (from Racibórz roundabout in the city of Żory to Wodisławska Street in Rybnik, km long). No other section of the regional road DW 935 was included in the financial analysis. Main elements of the financial analysis The financial analysis was carried out from the point of view of the project owner and operator, City of Rybnik. The incremental method comparing the without project scenario and the with project scenario was used, but effectively the non-investment scenario for the financial analysis is a zero scenario, because the road is a new development (no pre-existing infrastructure). The financial analysis is undertaken in constant prices (2014) over 25-year reference period of including 4 years of implementation and 21 years of operations. Macroeconomic parameters used are based on official national data. 17