The Polish state-owned rail operator, PKP Cargo, might be nearing the end of its life due to years of mismanagement and the inability to adapt to a changing market. The current Acting President of the company, Marcin Wojewódka, said that the situation is worse than expected, with both volumes and share values dropping significantly and a budget hole of 1,17 billion euros (5 billion PLN).
The situation was explained by Polish news outlet Fakty TVN24, which compiled information from various sources. Already a couple of weeks ago, the company announced that it would label up to a third of its employees as ‘inactive’ from 1 June, with a massive impact on these workers’ paychecks. Now, sources from an economic advisors team specialised in rail claim that PKP Cargo “is a company that is really close to bankruptcy”.
This news might somewhat come as a surprise, as PKP Cargo recently confirmed plans to expand internationally to Ukraine. In addition, the company’s financial figures for 2023 looked quite positive in a European context where rail freight operators are rarely profitable, especially when state-owned. It needs to be mentioned that, despite the apparent financial growth, the volumes of goods by PKP Cargo decreased by 16 per cent between 2022 and 2023.
Mismanagement in an already dramatic situation
One of the main causes behind PKP Cargo’s downfall is its mismanagement between 2015 and 2023, said Jakub Karnowski, Supervisory Board Chairman of the company until 2015. For example, the latest President of PKP Cargo, Dariusz Seliga, received bonuses of over 180,000 euros (800,000 PLN) “when the company was already in a dramatic condition”.
Moreover, a Parliamentary inquiry showed that members of PKP Cargo’s management board were given VIP packages for the 2024 Olympic Games in Paris. These packages are said to be valued at up to over 11,700 euros (50,000 PLN) each. However, this initiative was cancelled by the new government coalition led by Donald Tusk.
Volumes and share values have dropped
Many link PKP Cargo’s demise to its inability to adapt to the market. As mentioned, volumes were decreasing and so was the performance in tonne-km. PKP Cargo’s downward trend can also be seen in the value of its shares. When the company was privatised and listed on the stock exchange, each share was valued at 16,44 euros (70 PLN). Currently, they stand at 3,29 euros (14 PLN), with a decrease of 80 per cent.
Also read: