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Poland will spend around 30 billion zlotys (£7bn) next year on road construction for Euro 2012, the Infrastructure Minister told Reuters.

Cezary Grabarczyk, who has the difficult task of upgrading roads in the biggest ex-communist European Union member, also said Warsaw would issue more than 6 billion zlotys (£1.2bn) in 'infrastructure bonds' this year to ensure financing for roads.

"This year we have already signed agreements worth 10.7 billion zlotys (£2.5bn). In the 2008-2012 period, the road investments will reach almost 126 billion (£30bn) and next year alone we want to near 30 billion zlotys," Grabarczyk said.

Poland has only three major highways totalling less than 1,000 km (620 miles). As the country of 38 million celebrates 20 years of democratic rule this year, many say its poor roads are a key failing.

Since the centre-right government of Prime Minister Donald Tusk took over in late 2007, it has made boosting the antiquated roads one of its priorities.

"Until the end of the year we have one more highway tender to open. The east-west link, as well as most of the north-south road connection, will be ready for Euro 2012, which we co-host with Ukraine," Grabraczyk also said.

Grabarczyk signed deals for construction of more than 1,000 kilometres of roads - nearly half of it highways - over almost two years in office, but a lot of the agreements came recently.

Poland has introduced legal changes, some of which were aimed at increasing competition among firms participating in tenders, and Grabarczyk said this led to a drop in prices.

Construction firms were also forced to cut their margins as the global financial crisis limited large-scale investments.

"Most of the countries have cut back on investments and Poland emerged as the main road investment market in Europe. So we see firms from all around Europe and even from Asia taking part in our tenders," Grabarczyk said.

"So the final offers are cheaper than estimates. Altogether, we have almost 7 billion zlotys (£1.2bn) in such 'savings'."

Shares in some of construction firms listed on Warsaw stock exchange outperformed the main WIG20 index by a dozen-or-so per cent so far this year.

Foreign firms involved in road tenders or contracts include: Bogl a Krysl from the Czech Republic, Astaldi from Italy, SRB Civil Engineering Ltd of Ireland, Johann Bunte Bauunternehmung from Germany and a firm from China.

Reuters