Component C - Rural Infrastructure

Assumptions and tasks
      Among other things, development of a given area depends on the condition of technical infrastructure therein. In order to attract investors, such an area needs good roads, electricity, water supply systems and sewers. A well developed infrastructure is fundamental to attraction of investors to rural areas, indeed a key for their development. There should not be neglected the importance of the social infrastructure and a living standards prevailing in rural communities, which needs to be close to its urban equivalent. Scarce own funds and the drastically reduced subsidies to investment projects over the recent years have boost the number of the delayed investment projects, indispensable for further social and economic development of rural areas. Therefore, the largest budgets under the Rural Development Project have been allocated to the priority infrastructure projects, which would otherwise still await the momentum.

Following projects will be subsidised under the component:
- Water supply networks;
- Sewers and sewage treatment facilities;
- Solid waste management projects; and
- Gmina and powiat road projects.

On top of the financial support for investment projects, there will also be funded the training programme for self-government at the powiat, gmina and voivodship level. The training will focus on the market-oriented approach to management of public funds and a more effective spending of these funds for finance of infrastructure investment projects.
The course and handouts will not only cater for the needs of the Rural Development Project, but also satisfy requirements of SAPARD and, in the future, handle procedures applicable to the EU Structural Funds. Training courses financed under the Project will be run in all 16 voivodships, as of the fourth quarter of 2001. Overall, at least 80 courses will be delivered (between three and eight in each voivodship), for at least 3000 self-government officials at the powiat, gmina and voivodship level.

      Both the infrastructure project and training part of the infrastructure component will cover all voivodships.
The National Steering Committee have apportioned proceeds of the Project, provided for infrastructure projects between voivodships based on the following criteria:
- Rate of unemployment in rural areas;
- Hidden unemployment in rural areas, expressed as the number of persons, who base their subsistence on income from farming;
- Population of the rural areas in the given voivodship; and
- Territory of the given voivodship.

Subsidies to the infrastructure investment projects are available to the following self-government units: rural and mixed urban and rural gminas (except of the towns of over 15 thousand population), urban gminas (of up to 15 thousand population), registered associations of gminas, powiats (powiat roads only, except of investment projects in towns of over 15 thousand population).

Rate of subsidies
The Project subsidises projects up to:
- 30% (water supply); and
- 50% (sewer, sewage treatment, solid waste management and the gmina and powiat road projects).

The minimum self-government share is 30% of the total gross project costs; the share may be contributed by the local community. Such financial arrangement evidences community support and importance of the project for a given village.

Implementation units
      Authorised self-government units filed applications for subsidies to infrastructure projects with the relevant Regional Branches of the Agency for Restructuring and Modernisation of Agriculture. Upon their verification by the Regional Branches of the Agency for Restructuring and Modernisation of Agriculture the applications were furnished for evaluation to the Voivodship Project Development Units and the Regional Steering Committee. The applications were evaluated primarily against the criteria adopted by the Regional Steering Committee in each voivodship, in consideration of the objectives set for the Rural Development Project and the specific needs in a given region. In most cases, following criteria were applied:
-Expected number of the new jobs, created by the projects;
-Social and economic condition of the given gmina, expressed in terms of the average per capita income or the rate of unemployment;
-Importance of the project for the social and economic development of the region;
-Self-government share in the project budget;
- Joint initiatives of a few gminas, which satisfy community needs in a larger area; and
- Economic criteria: per capita cost of the project and the period of return.

Having evaluated the applications, Voivodship Regional Steering Committees adopted ranking lists of projects. Out of 1682 projects on the ranking lists in 16 voivodships, 476 have been selected as eligible for finance under the Project. As the new budgets become available (e.g. as result of savings on bidding or previously unutilised reserve), further projects grouped on the ranking lists will be subsidised.