By 2060, almost PLN 200 billion of the revenue from cargo handling should be generated by the CPK infrastructure. The total expenditure of the state budget for the construction of the CPK airport should be recouped after only 12 years due to additional revenue from customs duties and VAT. These are the conclusions of a report by the EY analyst company.
The purpose of the EY report was to calculate the amount of revenue for the state budget from customs duties and VAT, based on the projected handling of goods at the CPK airport.
“The authors of the report calculated that from the mid-2030s onwards, thanks to CPK, the additional annual revenue for the state budget from customs duties and VAT should exceed PLN 1 billion. During the first 32 years of operation, the CPK investment is going to generate close to PLN 200 billion“, says Marcin Horała, Deputy Minister of Funds and Regional Policy and the government plenipotentiary for CPK.
He also emphasises that the construction of such infrastructure in Poland is bad news for those countries that have so far enjoyed gigantic revenues from customs duties, which have bypassed the Polish budget. “The CPK investment is going to finally divert billions in customs duties and VAT from the German budget to the Polish budget. This is going to become a massive boost for our trade and economy, which is why CPK is needed ‘immediately’”, adds Marcin Horała.
CPK assumes that state budget expenditures related to the construction and launch of the CPK airport should amount to around PLN 9 billion (the estimated total amount of the airport part of the investment is around PLN 41 billion, of which more than PLN 32 billion will be contributed by private investors and debt financing). This means that the funds from the state budget allocated for this investment should be recouped after 12 years – and only from the proceeds from a larger amount of goods entering the EU through the CPK airport.
What will be the sources of growth in cargo traffic? Firstly, the takeover by Poland of some of the goods that today fly out to the world via other airports, such as Frankfurt and Amsterdam. Secondly, CPK will become the optimal place for international logistics companies to collect customs and tax goods transported to EU countries. Thirdly, as a country, we gain an adequately developed infrastructure, which is going to result in the development of companies specialising in logistics and air cargo.
“The construction of CPK should ensure a rapid increase in the amount of cargo handled through Poland. The launch of the infrastructure we are designing will result in significant additional revenues for the state budget. Exploiting the potential of air cargo thanks to CPK means increasing the import and export of goods, as well as new development opportunities for Polish entrepreneurs”, says Mikołaj Wild, president of CPK.
To estimate the revenues from customs duties and taxes, EY experts used the International Air Transport Association (IATA) forecasts and Oxford Economics (OE). Analogously to the methodology used by IATA, EY experts identified three scenarios: central (base) and low and high demand. They differ in the volume of cargo traffic for the CPK airport, the level of participation by cargo groups, as well as the dynamics of economic growth as well as imports and exports.
According to IATA forecasts, in the central scenario, the volume of imports to Poland (from within and outside the EU) should increase from approx. 75,000 tonnes in 2022 to approx. 932,000 tonnes in 2060. This translates into an increase in value terms from approx. PLN 46 billion in 2022 to approx. PLN 589 billion in 2060. In the case of exports, the corresponding values for 2022 and 2060 are respectively: 58,000 tonnes and 544,000 tonnes, meaning PLN 32 billion and PLN 428 billion.
According to the EY analysis, the key sectors from the perspective of generating export and import value will be related to technology and the following industries: pharmaceutical, chemical, automotive, and metal transport.
The import values translate into future charges of customs duty value at CPK airport. In the central scenario, in 2028 this should be approximately PLN 874 million, which should increase to approximately PLN 4.5 billion by 2060. After adjusting these values by the most likely achieved customs revenues in the scenario without CPK, and in view of the fact that 75% of the amount of the customs duties goes to the EU budget, the impact of customs revenues for the state budget as a result of CPK construction in 2028 – in the central scenario – is PLN 115 million. By 2060, it increases to approximately PLN 925 million.
In the case of VAT, on the other hand, the accrued value at the CPK airport in 2028 in the central scenario is approximately PLN 24 billion. It increases to approximately PLN 116 billion in 2060. These amounts need to be adjusted for the value of VAT that would be achieved in the scenario without CPK, as well as for that part of the tax that will be deducted and, as a result, will not make a lasting contribution to state budget revenues.
The volume of goods handled should also be affected by the procedures and the customs and tax regulations in force in Poland. It is for this reason that the EY report also includes a diagnosis of the current state of the law and a recommendation for legal changes that will simplify existing procedures and enable full cargo potential.
The EY report focuses on the analysis of budget revenues resulting from the exchange of goods. The document does not take into account passenger services or the catalytic effect, i.e. the stimulation of the economy caused by the introduction of goods into the EU market (e.g. the development of logistics and shipping, etc.).
Today, Poland does not take advantage of the enormous potential of air cargo. Warsaw Chopin Airport today handles less than 1% of European air cargo. Currently, as much as 62% of air cargo from Central and Eastern Europe is exported by truck to airports in Western Europe. IATA predicts that CPK could soon gain up to a 20% share in this market segment in the CEE.
The impact of CPK’s construction on the Polish economy was also presented in the Kearney 2020 report. Its authors calculated that by 2040, the CPK investments should translate into almost 300,000 new jobs. Those forecasts also show that from the opening of the first phase of the airport until 2040, the increase in total output from CPK operations, including the new high-speed rail lines, should total almost PLN 990 billion, while the gross value added should increase by a total of PLN 780 billion over the forecast period.
