Unclear rules of support from KPO for defence industry: experts alert

The fresh bill governing the safety and Defence Fund (FBIO), powered by the National Recovery Plan (KPO), raises serious concerns about the business environment. The plan will allocate as much as PLN 25 billion to the safety and defence objectives of the state, including the improvement of critical infrastructure and support for the arms industry. Despite ambitious assumptions, there are no clear guidelines on the form and criteria for the allocation of funds.

The support is intended to take the form of loans with the anticipation of partial redemption and recapitalisation by BGK. However, the problem remains the deficiency of transparency and precise rules. Entrepreneurs pay attention to the hazard of discretion and the deficiency of public consultation on the investment strategy.

Expert at Chalas & Partners: clear criteria and independency of decision-makers are key

The key to the efficient and efficient usage of immense KPO money on defence and safety is to find the kind and degree of essential investments. This will let companies in the sectors where money will flow to prepare to meet expectations. Moreover, it is essential to specify precisely the criteria for obtaining support. It is expected that, due to the strategical nature of the industry, they will be restrictive, so it will be hard and time-consuming to prepare an application for support from the FBIO, especially for innovative companies. I hope smaller and innovative companies, specified as start-ups, will not be discriminated against. Technological changes in fresh years make it possible to look for real modernisation in the arms manufacture in specified companies.

Support from the NAP for armaments must be based on nonsubjective criteria and independent evaluation of applications

Therefore, it is besides crucial to choice the right people to measure the requests of companies and make decisions. The government must guarantee that they are reliable and nonsubjective marketplace professionals. This cannot be the officials themselves, who will supply support not on nonsubjective but discretionary criteria. Otherwise, there could have been another issue with the allocation of KPO money. The analysis of the bill does not answer any of the most crucial questions. We are besides waiting for the draft investment strategy to be made public, which will be the second key paper of this programme.

Conclusion and marketplace risks

Without clear rules and open dialog with business, many companies may quit seeking support. The persistent deficiency of transparency and the deficiency of sales warrant for defence products increases the hazard of waste. The final provisions of the Act and the transparency of BGK's activities will be key.

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The full article and commentary of our Counselor Adam Zakrzywski was created for publication in pulbbusinessu.pl