From Highways to Railways? The Railway Fund Is an Opportunity—but PKP PLK’s Specifics May Derail “Road-Building” Habits

The Minister of Infrastructure has confirmed what the industry has been waiting for for years: railway financing in Poland is finally set to gain stability comparable to that of road infrastructure. The new Railway Fund will channel billions of zlotys into the sector. For the construction industry, this is a clear signal to move forward aggressively. However, for companies whose business has so far relied primarily on GDDKiA contracts, entering the railway market may prove to be a painful collision with reality.

As lawyers advising infrastructure projects, we see clearly that investment euphoria must be matched with a cool-headed assessment of risk. Below is our analysis.

What Is the New Railway Fund?

Until now, railway financing was based either on rigid annual budget allocations or on PKP PLK’s debt financing—both leading to uncertainty and so-called “investment gaps.” The new mechanism is designed to operate analogously to the National Road Fund (KFD). What does this mean in practice?

• Liquidity: Funds do not “expire” at the end of the budget year.
• Long-term financing: The contracting authority (PKP PLK) gains the ability to enter into multi-year commitments without the risk of losing funding mid-contract.
• Impact: A surge in tenders is inevitable, and an investor with a full wallet will be far more inclined to strictly enforce deadlines than to “freeze” construction works.

Congestion on the Tracks: Rising Competition

Stable funding will attract players whose road contract backlogs are shrinking. We expect aggressive price competition. “Road-focused” companies will seek to diversify revenue streams, often underestimating the hidden costs of railway execution. This will result in underpriced bids and, inevitably, claims already at the early stages of construction.

GDDKiA vs. PKP PLK – These Are Not Twins

The biggest mistake a contractor can make is to transfer a road-based contract strategy to rail projects on a 1:1 basis. The differences are fundamental:

• Construction site: Road projects are typically built on new alignments (greenfield). Railway projects usually involve modernisation of existing lines (brownfield).
• Working under live traffic: In rail projects, the key deadlines are possession windows regulated by railway timetables. A single delay within one “window” can derail the entire project schedule.
• Acceptance procedures: The Railway Transport Office (UTK) procedures and interoperability processes represent a completely different level of engineering bureaucracy.

Opportunities and Threats: Where the Money Is—and Where the Landmines Lie

The Railway Fund ensures liquidity but does not change the technical nature of railway contracts. Profits in rail projects are generated on specialist works, yet the risks are far harder to quantify.

Landmine No. 1: “Design and… Guess What’s Underground” Unlike construction on open fields, most PKP PLK projects are executed on a “living organism.” Functional–Utility Programmes (PFUs) often fail to reflect actual site conditions.

Risk: Uninventoried cables, old foundations, and clashes not shown on maps.

Legal consequence: If the contractor declares that it has “familiarised itself with the site” without reservations, the contracting authority often rejects claims for additional works, treating collision removal as a lump-sum risk. The legal battle focuses on whether the obstacle was “unforeseeable.”

Landmine No. 2: Railway Traffic Control (SRK) Bottlenecks This is where schedules most often “bleed.” Traffic control systems (e.g. ETCS, GSM-R) are supplied by a narrow group of specialised providers.

Risk: Delays in system certification block final acceptance of the entire line, even if tracks and traction are complete. Contractual penalties for delays in achieving Milestones are imposed strictly, and passing them on to SRK subcontractors is often legally ineffective without precise back-to-back arrangements.

Opportunity: Margin at the Interfaces Those who can manage interfaces will win. On roads, you deal with asphalt and bridges. On railways, you manage interfaces between: Track – Traction – SRK – Power Supply. The biggest profits are generated through optimisation of work phasing so that one track remains operational while the other is modernised. This is logistical engineering that requires flawless contractual protection and disciplined correspondence with the Contract Engineer.

How to Win (and Not Lose): A Hybrid Legal–Operational Strategy

Success under the Railway Fund requires what we call “Road Discipline in Railway Reality.”

Managing Possession Windows and Track Closures This is the heart of any rail project. On roads, you implement detours. On railways, you must hit possession windows agreed with operators a year in advance.

Even a one-hour delay in site handover by PKP PLK (e.g. failure to disconnect power) must be immediately reported as a Time Claim. Contractors often downplay this (“we’ll make it up at night”), only to find later that those hours are missing at final acceptance.

Certification and Acceptance (UTK / TSI) Commissioning is not a mere formality at the end of construction—it is a continuous process.  

Documentation for the Notified Body (NoBo/DeBo) must be prepared on an ongoing basis. From our experience as Contract Engineer lawyers, contractors often have a completed facility but fall behind on the required documentation. The result? The asset stands ready, yet the Employer cannot issue the Taking-Over Certificate

Price Adjustment in a World of Sector-Specific Indices The GUS indexation basket for rail differs from that used in road contracts (rail steel, copper). Contractors must verify whether the price adjustment index in a new contract genuinely reflects their cost structure—particularly for specialist works.

Our Perspective

At our law firm, we combine two worlds. We do not theorise about railways—our team has worked on complex railway contracts and understands contractors’ challenges from the inside. At the same time, by advising on the largest road projects from the perspective of the Contract Engineer, we add the Employer’s viewpoint.

If your company plans to tap into Railway Fund financing—we invite you to the table. It is far better to verify contractual risks early than to fight them later on the tracks.