No EU country refuses funds for infrastructure, no matter how useless or unnecessary that particular project is. After all it is wonderful for domestic consumption and for creating some jobs during the construction of the project. The contractors are usually quite happy as well. Infrastructure projects in Europe – in my experience – generally have about a 10% net profit margin for the contractors. Consultants involved in such projects usually make some 30%+ as profit margins. Consultants help in making the forecasts to attract the funds and are usually involved in some part of implementing the project as well.
Of course, local politicians champion specific projects and specific consultants and local contractors. They help in getting the appropriate EU bureaucrats and those in their own countries to select the projects and the contractors. And so what if the merits of the project are a little exaggerated. So when I see a story like this one, I am not too greatly surprised.
It seems that the EU has spent some €2 billion on airports in member states. A third of this money has gone just to Poland. Projects are selected based on forecasts of future usage (made by consultants and local politicians and bureaucrats) and these rosy forecasts are nearly always grossly exaggerated.
Reuters: EU funds help Poland build ‘ghost’ airports
The European Union has given Poland more than 100 million euros ($125 million) to build at least three “ghost” airports in places where there are not enough passengers to keep them in business.
The result is gleaming new airport terminals which, even at the peak of the holiday season, echo to the sound of empty concourses and spend millions trying to attract airlines.
Poland is not the only country in Europe to have built airports that struggle to attract flights. Around 80 airports in Europe attract fewer than 1 million passengers a year, and about three-quarters of those are in the red, according to industry body Airports Council International. Some cost much more to build than the Polish projects. One airport in eastern Spain, open for three years, has so far received not a single flight.
Poland received 615.7 million euros in EU support for airports between 2007 and 2013, according to figures supplied to Reuters by the European Commission. That was almost twice as much as the next biggest recipient, Spain, and more than a third of all member states’ money for airports. The government declined to provide all the information on which it based its decisions to invest in the airports, but Reuters has reviewed data on three sites where traffic fell dramatically short of forecasts. ……..
…… Between 2007 and 2013, the European Union promised funding to help build and upgrade 12 Polish airports. Some of the projections underlying the plans were highly ambitious.
The government declined to detail its predictions for passenger numbers. But figures for three of the airports – Lodz, Rzeszow and Lublin – are contained in letters on a related topic sent by the European Commission to the Polish foreign minister. The letters show Polish authorities projected combined passenger numbers for the airports to be more than 3 million passengers a year. In 2013, the actual number was just over 1.1 million.
Together, the investments in the three airports totaled about 245 million euros. Around 105 million of that came from the European Union. The rest came from central government in Warsaw, local governments and the airports themselves.
About Lodz, Reuters reports
The airport commissioned a feasibility study from advisory firm Ernst & Young (EY), published in November, 2009. EY predicted a minimum of 1.042 million passengers in 2013 for Lodz. That was less than the government forecast but many more than the 353,633 who actually passed through the airport last year. EY declined to comment.
Low cost airlines also get much benefit from the money spent on promoting the airports.
The state also has indirect methods of helping the airports, in particular by giving money to the airlines – mainly low-cost carriers like Ryanair.
“In practice, these payments serve as an incentive for airlines,” CEE Bankwatch Network, the non-governmental watchdog, said in its report.
Lodz and Rzeszow airports did not respond to questions about how much they pay airlines. A spokesman for Lublin airport said only that it was successfully boosting communications to help the local economy.
But public records for Podkarpackie, the mountainous, forested region where Rzeszow airport sits, show that between 2011 and 2014 its government paid 5.7 million euros to Ryanair in exchange for advertisements promoting the region, which appeared on Ryanair’s web site and in its in-flight magazines. Podkarpackie spent another 3 million euros to advertise with Polish carrier Eurolot over a three-year period. …….
In all, 70 percent of the region’s 2013 promotional budget went to airlines that fly into Rzeszow airport. These payments are problematic, say several people involved in Polish aviation, because the airports are at the mercy of the airlines. With so many airports to choose from, airlines can easily shift routes.
The busy check-in area at Lodz airport on 10th October 2014 CREDIT: REUTERS/KACPER PEMPEL
Interestingly another report today is about one of the CIA’s rendition airports which is to get an expensive make-over
EU funds help Poland re-fit CIA rendition hub
Poland’s next big European-funded airport project is at Szymany, a remote airfield which the CIA used just over a decade ago to transport al Qaeda suspects to a secret interrogation center it ran in Poland. Khalid Sheikh Mohammed, alleged mastermind of the Sept. 11, 2001 attacks, was probably among detainees who landed at the airfield en route to the CIA facility, code named “Quartz,” in a nearby forest, according to a Council of Europe report.
…… Now, a 48.6 million euro ($60 million) project is underway to create an international airport on the site of the airfield. Just over half the cost will come from the EU. The airport’s operator, Warmia i Mazury Sp., says it expects 80,000 passengers in 2016, the first full year of operation, and about 250,000 passengers a year by 2035. …….. “That part of Poland needs an airport, but not there,” said Jacek Krawczyk, a former chairman of Polish airline LOT who has a senior role at the European Economic and Social Committee, which advises the European Commission. “It’s a complete mistake.”
When EU funds are at stake common sense tends to leave the scene.
The k2p blog 
