What is PPP model?

PPP is a model of investment implementation based on long-term cooperation between a public entity (e.g. a city, municipality) and a private partner. The benefits, but also the responsibility resulting from this cooperation is shared between both parties in accordance with the agreement concluded, with the aim of improving the quality of infrastructure and services offered to residents. Thanks to this model, the contracting authority does not burden its creditworthiness by spreading the payment over many years of cooperation with the private partner. Most often, when handing over the land for an investment and temporarily giving up profits from the appearance of a new facility (e.g. a hospital, road, tram line), they can count on the selected private partner to finance its design, construction and subsequent maintenance. The latter, after the completion of construction works, can profit from the exploitation of the facility for a specified period of time, in return for appropriate management of the facility. In contrast, the Kraków PPP model for KST IV assumes payment for infrastructure availability. This means that the city will pay a certain amount successively if the infrastructure is maintained to an appropriate standard and passable for tram traffic. This minimises disruption to tram traffic on the line.

The use of PPPs maximises the use of the private party’s expertise to build modern infrastructure and reduces investment costs throughout the life cycle.

Tramway to Mistrzejowice in PPP model

According to the agreement signed in December 2021 between the city of Krakow (public partner) and the consortium of PPP Solutions Polska and Gülermak AGir Sanayi Insaat ve Taahhu (private partner), the second party is responsible for financing, designing, obtaining the necessary construction permits and building the tram line to Mistrzejowice, and then looking after its infrastructure for 20 years. After that period the city will take over the use of the infrastructure. This is the biggest PPP transport project in Poland, on the basis of the Krakow’s experience there will be created guidelines for other local governments which want to use this model while realizing similar projects.


The project complies with the highest international standards. The European Investment Bank, the European Bank for Reconstruction and Development, Bank Pekao SA and the Polish Development Fund have agreed to co-finance the investment.