Construction market booms in Eastern Europe - Industry Overview

Business America, Sept 6, 1993 by Monica Michejda Goodrich

For information on the foundation, contact: Eastern European Real Property Foundation, 777 14th St., NW., Suite 717, Washington, D.C. 20005; tel. (202) 383-1296, fax (202) 383-7549.

Poland Begins Private Mortgage Banking

Private mortgage banking in Poland beagn this year. The Polish-American Mortgage bank (PAM), a joint venture of the Polish-Anerican Enterprise Fund, Wielkopolski Bank Kredytowy, and PMZ Polservice, is Poland's first private bank to offer residential construction and mortgage loans. PAM Bank's first endeavor is the construction and mortgage financing of a 13-unit townhouse project in the Warsaw district if Praga-Polnoc.

In inaugurating the project, bank president Dr. Jenne K. Britell said, "Home-buyers will now be able to take advantage of the bank's new lower rate of 10 percent for its 15-year fixed rate fully amortizing mortgages, which are unique in Poland. The full amortization means you own your home completely after 15 years with no debt and no extra pament."

The 13 houses, all to be owner-occupied, are expected to be completed by this month. Each has an average size of 171.5 square meters (1,846 square feet) with an average sales price of the zloty equivalent of $48,700.

The bank also announced two additional programs being offered in response to customers' needs. The first is a "corporate program," through which Polish and multinational businesses can participate to expand home ownership for their Polish employees. The second is an "individual homeowner construction and mortgage program," by which the bank will provide construction and mortgage loans for single unit and multi-unit projects.

New Training Centers Build Construction Skills

Contributing American skills and technology to Poland's housing and construction sector is the work of the Polish-American Building Crafts Training Centers, also known as the Praga and Gdynia Training Centers. These centers are based on agreements among the U.S. Department of Labor, the Building and Construction Trades Department of the AFL-CIO, Poland's Ministry of Labor and Social Policy, and NSZZ "Solidarnosc."

Furnished with American tools and equipment, the centers provide training to enable workers to become bricklayers, ironworkers, plumbers, electricians, and carpenters. The courses, conducted by instructors who themselves attended training courses in the United States, are aimed at preparing highly qualified workers acquainted with modern tools and equipment as well as latest technologies.

Training programs consist of four-month apprenticeship courses for those who have no background in building crafts but want to learn them, and six- and four-week courses aimed at upgrading skills of construction craftsmen.

As of July, more than 600 students had graduated from the program. Selected trainees are being provided management skills to enable them to start their own businesses. Many U.S. firms, such as Coca Cola, have established priority hiring for Praga Training Center graduates. Other companies such as Kodak, Lincoln Electric, and Klein Tools have donated tools and equipment.