Could PKP IC go bankrupt?

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PESA ED74-001+ED74-002, wilful blindness? Photo Solaris8315.

(Click image to see original on Wikipedia and for details of licensing.)

On 12 April, the day after Jakub Karnowski took over as chairman of PKP SA, the Polish business daily, Puls Biznesu, reported that PKP IC had problems in paying its suppliers. Its smallest creditors face real difficulties. Few companies were prepared to speak ‘on the record’, but privately Puls Biznesu was told that individual companies are have as as much as several million zloty worth of invoices overdue. The PKP IC press office disputes this account and claims that everybody is being paid on time.

In an effort to raise cash PKP IC has put its debtors list out to tender. The company is owed nearly two million zloty, mostly in unpaid fares. PKP IC is haemorrhaging customers; increased journey times, rising fares, grossly overcrowded trains are the principle causes, but the company’s ‘customer interface’ – the way it interacts and treats its passengers also leaves a great deal to be desired. At the beginning of April the number of passengers booking journeys from Krakow to Gdynia was down by 48% from the same period in 2011.

In 2011, PKP IC made a deficit of 25 million zloty; in the first two months of 2012 the company had already lost 20 million zloty. PKP IC boss, Janusz Malinowski, assures everybody that things are getting better and that the company was on track to lose 45 million in 2011, before it began to recover.

Malinowki is betting on a surge of traffic during Euro 2012, more competitive fares and new ticketing technology to turn round IC’s fortunes. But the PKP group as a whole appears ill-prepared for the football championships and, while PKP dithers, the new local airlines and Polski Bus are making the most of the opportunity.

PKP IC’s problems are systemic. With all the PKP group companies and the state treasury determined to extract the last pound of flesh from Poland’s ‘commercialised’ rail industry, IC has to pay unrealistically high track access charges. The track renewal works taking place on many key routes are anither problem – with so many other PKP companies having a say in the matter, not to mention the claims of the independent freight operators, the track authority, PKP PLK, finds it difficult to program line closures in a way that would minimise delays to IC passengers.

To compound its difficulties, PKP IC has a bloated management structure, an appalling company culture, and regards its passengers as a necessary evil rather than as a major stakeholder.

The saga of the incredibly uncomfortable PESA ED74s which the company inherited from PKP PR in 2008 are a good example of the contempt with which the company treats its customers. Though acquired by PKP PR for the Lodz – Warsaw services, their unergonomic seating makes them fit only for 30 – 40 minute city centre to outer suburban workings. PKP IC continues to use them on off-peak Lodz – Warsaw services – a run which can take up to 2½ hours. Now they are also being employed on TLK services between Lodz and Krakow, a run of nearly six hours.

Sources:

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3 Responses to “Could PKP IC go bankrupt?”

  1. Paddy Says:

    Yes, having spent so much time on said unergonomic seats recently, and a dreadful WAW – KRA Inter Regio (the price, cheap as chips) I can only nod my head in agreement.

  2. Ariel Ciechański Says:

    EMU ED74 are too short on Łódź-Warszawa line at that moment. Because of reconstruction of the Skierniewice-Warszawa line, trains are less frequent and it is necessary to provide 10-12 coach trains (aprox. 900 seats – 2xED74 have only about 400 seats). But for some trains this is not enough and many passengers travel in corridors.

  3. Dr. Mike Brandt Says:

    We used InterCity for the first time last week from Poznan to Wroclaw. I have to say it was excellent and way beyond anything in the UK in terms of value and comfort.

    We got a 50% discount on 3 one way tickets as last minute bookings (30 mins before departure) A really comfortable, spotlessly clean compartment with A/C and 10 mins into the journey free complimentary refreshments with a very friendly hostess who also plugged the restaurant car, which turned out to be as good as any first class I’ve experienced anywhere in Europe and the UK but better on price by far. The journey was slow in part due to rebuilding works but so would be a bus transfer in the UK for the same works.

    But the journey was relaxing and nowhere near as tiring as recent short flights which still end up taking ages and are too stressful.

    My only other Polish train experiences are the Gdansk-Gydnia-Sopot-Rumia line with those hideous knackered out EMUs. The rather good double deck loco hauled trains to Poznan with the comfy seats and the Poznan – Wolsztyn steam service, which is excellent and far better than the railcar journey.

    There’s a lot still going for locomotive hauled trains, namely versatility. Long distance EMUs and DMUs with their fixed formations and futuristic looks seem to fall short of comfort and it’s not a problem peculiar to Poland, the new Stansted Express units have seats clearly designed by computer for crash test dummies. Totally uncomfortable for even a few minutes – even Ryanair have more comfortable seats.

    Poland is fortunate, it still has much of the infrastructure necessary to enable slip coaches, run-arounds, turning facilities and diversion/duplication services so it should be able to have one of the best rail systems in Europe. Once the cost of running a car kicks in and the stress and often minimal time saving of air travel become more evident than the new gained novelty, The railways need to be in a position to entice passengers back and I think this will happen very quickly rather than the decades in other European countries many of which have made a right Horlicks of railway services.

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