InterCity privatisation procrastination

by

tabor_ic

Coaches on the Berlin-Warszawa-Express. Photo PKP.

Cezary Grabarczyk, the Minister for Infrastructure, wants to delay the privatisation of PKP Intercity until the worst of the economic crisis is over. He plans to persuade Andrzej Wach, the chairman of the PKP Group, and Krzysztof Celinski, the chairman of PKP IC that it would be better postpone the privatisation until 2011.

PKP IC badly needs a strategic investor. It is not just a case of needing funds for more comfortable and faster trains, PKP IC needs outside expertise to radically reform its governance and improve its marketing. An early privatisation would make it possible to sell off part of PKP IC – say 51% – now and wait until the company is delivering better financial results before selling the remainder.

If privatisation is delayed until 2011, PKP IC will carry on as before – relying on government handouts – rather than getting its act together. In 5 months time, EU Directive 2007/58 will open up international passenger rail services to competition. For a state-owned PKP IC, the liberalisation of international services – its most profitable business – is likely to be more of a threat than an opportunity.

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