Action not words

Yes, we've heard it all before. Another new treasury minister comes into office, another new round of privatization promises.

So it was last week with Piotr Czyżewski, appointed to his new post after the resignation of Sławomir Cytrycki, who only lasted three months. The former deputy minister of the state treasury didn't waste any time making his first public address to the SLD's parliamentary club and holding interviews with the media. He said that over the next two years the treasury would proceed with the sales of stakes in several of the country's last remaining gems.

Telecom giant TPSA, insurer PZU, bank PKO BP, educational publisher WSiP, Ciech chemicals, press distributor Ruch and vodka producer Polmos Białystok were some of the biggies on the select list of companies whose government-owned stakes the state plans to sell via the stock exchange by the end of 2005. As it was said to be only a preliminary list, Czyżewski declared that more details about some of the privatization projects would be given in four to six weeks.

The discussion of the list followed Czyżewski's earlier comments that he wanted to press on with the contentious and controversial privatization of insurer PZU by holding an initial public offering of shares as soon as possible. Czyżewski also touched on the thus far intermittent and unpredictable efforts to sell Rafineria Gdańska, indicating that the government is still contemplating its merger with PKN Orlen, but that the final decision would be based on the outcome of Nafta Polska's evaluation of offers from both Orlen and the U.K.'s Rotch Energy.

While the new minister also reiterated the government's difficulties in reaching its planned privatization target of €1.7 billion (zł. 7.4 billion), already reduced from its absurdly high original projection of €2.1 billion (zł. 9.1 billion), he vowed to do all he could to achieve it.

Such statements, however, hardly indicate an about-face for the government's stance on privatization, which up to now has been all but halted under the SLD regime. The list, in fact, is nothing new, and the potential proceeds from the sales of the companies on it have already been added into the budget.

Investors realized this and reacted with the same nonchalance as they did when Cytrycki resigned. Meanwhile, they will continue to keep a cautious if not skeptical eye on Czyżewski to see if his words will translate into actions.

But, of course, they won't. We see such happy talk not as an attempt to reverse the previous policy or even as a credible signal that the government does indeed want to speed up its sell-offs, but merely empty discourse to please the ruling party and to give the country's media and citizens a good show. Therefore, expect to see no substantial changes or share sales completed this year, except for perhaps TPSA.

Headier issues, including the złoty's movements, the ongoing political tumult, fiscal reform, the upcoming European Union referendum and the call for early general elections in June 2004, will ultimately outweigh any privatization plans - whether they be by declaration or deed.