Recent government estimates have environmental expenditures in Poland increasing to more than USD 1 billion in 1994, surpassing spending in the Czech Republic to become the largest Visegrad environmental market. Hungary follows with environmental expenditures of more than USD 250 million. The Slovak Republic has the smallest market in the Visegrad four with expenditures of more than USD 150 million. These figures are estimated to grow between 10 percent and 20 percent annually as economies continue to grow and governments improve enforcement actions while implementing new financial incentives.
The size of the environmental marketplace and the status of companies is different in each country. However, the market is relatively young in all four countries, with most of the companies established in or after 1990, and there is a correlation between the pace of privatization and the total environmental spending per country. The percentage of privatized companies was greatest in the Czech Republic (86 percent), followed by Poland (85 percent), Hungary (78 percent) and the Slovak Republic (71 percent).
The survey of almost 600 environmental companies provided another picture of relative environmental spending in each country. Similar to government estimates, environmental companies in the Polish and Czech markets reported the highest combined annual incomes.
When looking at revenues by media, water-related projects, both industrial and municipal, generated the most revenues for the surveyed companies (> 41 percent), followed by solid waste projects and soil contamination (> 19 percent) and air pollution projects (>19 percent). The remaining activities included projects related to nature conservation, industrial hygiene and safety and energy conservation.
Across the four countries, the sale of environmental products generated the most revenues (44 percent), followed closely by technical services (40 percent). Polish firms earned the highest percentage of their revenues (53 percent) from environmental products while Hungarian firms reported the highest percentage of their income from technical services.
As in the West, government regulations drive the growth in this CEE industry. Therefore, the top request for information and training from environmental companies was related to the impact EU harmonization would have on environmental regulations. This topic was followed closely by requests for information and training on new environmental technologies. Also high on the list was information on how to finance investments for environmental projects. Since most governments are still in the process of establishing transparent bidding processes for environmental projects, companies relied on interpersonal relationships to learn about new business opportunities. They did not consider government sources very reliable.
Local firms are gaining more exposure to western firms. More than half worked with Western firms on a joint project and considered it a successful venture. Recommendations for improving East-West ventures include: better communications, more equitable terms for local firms, a better understanding of local business practices by Western firms, and more clarity in contractual relationships and government regulations.