Will 300,000 passengers lose their rail services?
The PKP PR supervisory board meeting of 26 October. Photo PKP PR.
A series of dramatic developments has brought PKP Przewozy Regionalne to the verge of bankruptcy and could mean the suspension of rail transport services for over 300,000 passengers who use the company’s rail services every day.
PKP Przewozy Regionalne came to existance in October 2001 as part of a ‘reconstruction programme’ which split up PKP into some 200 individual companies on the British model. However, unlike great Britain, most of the companies were not privatised but stayed state-owned, either as daughter companies of PKP SA, or as companies where all the shares were directly owned by the State Treasury. Quite a few of the smaller companies – like the wagon building and repair works at Lapy – did not survive on their own and went into liquidation.
PKP PR used to run 300 interregional and international semi-fast (pospieszny) trains, but on December 1, 2008 these trains were transferred to PKP PR’s then-sister company, PKP Intercity S.A. On December 22, 2008 the ownership of PKP PR itself was transferred to Poland’s 16 provincial governments. The local authorities accepted the gift somewhat reluctantly – PKP was a top-heavy bureaucratic monolith with a company culture that had not changed from the pre-1989 communist era.
It is not difficult to deduce the intention behind the government’s transfer of local rail services to the provinces. In future, if the local authorities want local rail services they will have to pay for them. In fact most Polish local authorities were prepared to subsidize rail services, but bridled at the escalating demands of PKP PR and the lack of transparency regarding the way the company cash demands were calculated. A solution that was discussed many times was that each local authority should take over outright responsibility for running local authorities in its particular area. A number of provincial governments set up their own railway companies or held tenders for the supply of railway passenger services in their area. Presumably the process was taking too long for the government and this is why PKP PR was handed over to the local authorities at the end of the last year.
With the company came a sizeable historic debt due to PKP PR’s former sister companies as well as responsibility for many loss making services. The first sign that things were going badly when Juliusz Englehardt, the Under Secretary of State responsible for Poland’s railways wrote to Poland’s wrote to Poland’s 16 provincial governors in August this year urging them to clear PKP PR’s outstanding debt to PKP InterCity. He also chided them for allowing PKP PR to run its Inter Regio long distance trains in competition with InterCity, but that is a different story.
Last month a series of conflicting stories appeared in the Polish press: PKP PR was going to go bankrupt; the Government was going to make extra money available; no PKP PR was going to go bankrupt after all. Then came the news that Mr Engelhardt had ordered PKP InterCity to begin proceedings to recover the monies due to it, closely followed by the news that a court had seized control of PKP PR’s bank accounts. A meeting of PKP PR’s supervisory board meeting took place on 26 October at which a decision was made to instruct the company’s board to start proceedings for voluntary bankruptcy without delay. Such an arrangement would have enable PKP PR to enter arrangements with its creditors. There is just one problem there is no provision in Polish law for a company set up by an act of parliament – as PKP PR was – to go bankrupt.
Without access to its bank accounts it can only be days before PKP PR is brought to a juddering halt. Who will blink first, Mr Engelhardt or the provincial governors? Watch this space.