POSITION OF THE MANAGEMENT BOARD OF AUTOSTRADA WIELKOPOLSKA SA CONCERNING CLAIMS OF THE MINISTER OF INFRASTRUCTURE

POSITION OF THE MANAGEMENT BOARD OF AUTOSTRADA WIELKOPOLSKA SA CONCERNING CLAIMS OF THE MINISTER OF INFRASTRUCTURE RELATING TO THE STATE BUDGET PAYMENTS ON ACCOUNT OF COMPENSATION FOR THE TOLL FREE PASSAGE OF HEAVY VEHICLES ON THE CONCESSION SECTION OF THE A2 MOTORWAY

In view of the difference of opinion with regard to the legal interpretation of the concession documents executed by AWSA and the Minister, having obtained the approval of the international lenders, the Company Management Board made a decision to refer the matter to dispute resolution procedure as provided for in the Concession Agreement (arbitration).

1. There have been no overpayments from the government on account of the vignette-based use of the motorway by heavy vehicles.

2. Annex 6 to the Concession Agreement which is challenged by the Minister was lawfully signed in 2005 and has been equally binding upon both parties to the Project ; the payments from the government have been made in accordance with the provisions of law (The Act on Toll Motorways and the National Road Fund of 27.10.1994 as amended) and in line with the Agreement between AWSA and the Minister of Infrastructure of in 2005.

3. The claim of the Minister of Infrastructure has no merits, as the alleged overpayment amount claimed by the Minister has not been substantiated by any actual and detailed calculations. This amount has more than doubled in the recent month for no apparent reasons.

4. The compensation rates were approved by the government who had unrestrained access to traffic data and future maintenance costs together with the involved financial and technical advisors (Ernst & Young, PricewaterhouseCoopers and Scott Wilson).

5. The process of calculations referred to in the Agreement of  2005 involved international commercial banks which agreed them with the government’s advisor for subsequent approval by the Minister of Infrastructure. AWSA undertook to provide the public party with the Verification Report by 1 July 2007. Such Report deals with the verification of the compensation rates, based on the updated traffic assumptions and the related costs and accounting for the loan repayment potential. Having incorporated the comments of the public party’s financial advisor and having made the relevant changes to the financial model, the parties endorsed the validity of the Verification Report. There were no further comments made by the public party by the deadline provided for in the 2005 Agreement.

6. Both the procedure and the method of unilateral demands made by the government is in obvious conflict with the principles of a PPP relationship. It is an unprecedented situation with respect to infrastructural project of this type , as well as a serious blow to the government’s image in the eyes of reputable international financing institutions and potential investors that , after 5 years, the government challenges the merits of the agreement it signed. No reputable lender would have allowed any changes in the project they finance that would involve incorrect and unreliable assumptions that would not have been approve by the government.

The Management Board of the Company Autostrada Wielkopolska S.A.