Fast track to nowhere
By : Roseanne Gerin
It was billed as an information superhighway. News reports spun grandiose yarns of how a fiber-optic line crossing Poland from Russia to Western Europe could handle all telecommunications traffic between East and West. One international paper quoted a Polish professor saying it could even simultaneously transmit about 37 million calls or 70,000 encyclopedia volumes in one second. Other observers cautioned it would threaten the independence of the telecom industry in Poland.
But it remains just an unused cable in the ground, and not even a completed one at that. After disappearing from the headlines earlier this year, the 680-kilometer fiber-optic cable that traverses Poland and runs alongside the 4,000-kilometer Yamal pipeline from Russia to Germany will not pose any immediate threat to telecoms firms or to the country's national security at least for another year.
While it may have vanished from the newspapers, the issue of the yet-to-be finished fiber-optic cable remains unresolved. Although the Polish section of the pipeline was completed in September 1999, nine kilometers of its accompanying 24-fiber cable are still missing. Local landowners near Wloclawek in central Poland derailed the plans of EuRoPol Gaz (ERPG) (http://www.polishmarket.com.pl/numer10/m2628.htm), the company established in 1993 to lay the cable, by refusing to let them bury the cable on their land. But while the fate of the fiber-optic lines lies in limbo, the matter is far from over.
Legal hangover
The unfinished fiber-optic line could result in a minor legal headache for PolGaz Telekom (PGT), the company that plans to use it for commercial purposes. One Polish telecom company that had an agreement with PGT for data transmission capabilities is considering suing the firm for the initial few millions of dollars it invested in its preliminary service preparations.
"It's something marginal for us and we are not interested (in the service) now," said a telecom firm executive, who requested anonymity. "I want to be connected with PGT as little as possible."
A representative of PGT who declined to be identified, however, said the company still maintained good relations with the Polish telecoms firm it had signed contracts with and it was not concerned about possible law suits. Polish Phonesat, a subsidiary of the telecom and energy concern Elektrim, and Szepietowo-based telecom firm Szeptel were two companies that had initial agreements with PGT.
A 1993 agreement between Poland and Russia sealed the deal to construct the portion of the gas pipeline that would cross Poland. The construction was to be completed by Polskie Gornictwo Naftowe i Gazownictwo (Polish Gas and Oil Mining Company/PGNiG) (http://www.pgnig.com.pl) and Russian natural gas monopolist Gazprom. The agreement also contained a provision for the companies to lay a fiber-optic cable for gas-related communications used in servicing the lines.
PGNiG and Gazprom then established ERPG, a joint venture that would service the pipeline and lay the fiber-optic cable. Both firms control a 48% stake of ERPG, while the remaining 4% is controlled by Polish Gaz Trading. PGT, a subsidiary of ERPG, was supposed to provide commercial services for the fiber-optic line. Its shareholders are gas importer Bartimpex with a 36% stake, ERPG with a 32% stake and Russian telecom Gaztelekom, a subsidiary of BGazprom (http://www.gazprom.ru), with another 32%.
The preliminary plans to offer telecom service via the pipeline's fiber-optic cable were unclear until local media reports brought the matter to light last autumn. The Polish government called for an investigation. Once it determined that the cable could reap huge revenues from international data transmission activities, it took action to ensure that its interests in both the pipeline and the fiber-optic cable were secured.
The government declared that Poland, through the stake of the state-owned company PGNiG in ERPG, lost its rightful control over both the pipeline and the fiber-optic cable, thereby violating the interest of the state treasury since the revenue potential of the fiber-optic line could be significant. The report recommended that government officials resume supervisory authority over the fulfillment of the 1993 agreement by appointing a special team to handle the matter and amend the telecoms law to introduce licenses for national data transmission.
In November, a special parliamentary telecom commission was formed to look into the matter. It found that ERPG was entitled to build the fiber-optic cable along the Yamal pipeline without a license, but declared that the 1993 agreement between Poland and Russia provided no legal basis for offering international telecom service through the fiber-optic cable.
But while ERPG said that it knew of no agreement between Poland and Russia on the fiber-optic cable along the Yamal pipeline, the 1993 document contained a provision that referenced general guidelines for constructing "a radio-line system and a fiber-optic system" for the gas line. According to Danuta Tarkowska, the spokeswoman of ERPG, the general provisions included the following statement: "These systems shall have a much larger capacity than is necessary for the gas pipeline itself. The excess of the transmission capacity shall be leased to other organizations that will need high standard links on the line: Kassel-Berlin-Warsaw-Minsk-Moscow-Uchta "
National security threat
The Communications Ministry has charged that the fiber-optic cable is a threat to national security.
The government's investigation continued. At a news conference in January, Communications Minister Tomasz Szyszko said the fiber-optic cable posed a threat to national security and that the state needed to regain control over the transnational network. An amendment to the telecom law was drafted to oblige operators to obtain permits from the Office of Telecommunications Regulation (URT) to offer transnational data transmission services. The permit requirement would be in force until Poland entered the European Union.
The amendment was sent to the Sejm about three weeks ago, but has not yet been scheduled for debate, according to Przemyslaw Sypniewski, an adviser to Szyszko. The Communications Ministry wants the debate to be held as soon as possible, he added.
PGT said it filed an application for a telecom permit with the URT in January. But Jacek Strzalkowski, the URT's spokesman, said that PGT had not filed any application. Although he could make no further statements until the special commission had completed its investigation, Strzalkowski said that no firm could receive a permit until Jan. 1, 2002. The new telecommunications law that is then due to take effect will not allow any permits to be issued during a one-year transition period.
Unhappy with Szyszko's comments at the January news conference, ERPG filed a lawsuit charging him with libel and circulating false information about the company's activities. Tarkowska of ERPG would not comment on the lawsuit, but said in a written statement that "it is difficult to estimate when the decision on the issue will be made."
"ERPG's statutes guarantee that all decisions can be made only in a consensus between ERPG's key shareholders, i.e., PGNiG and Gazprom," she added.
Speaking out and out spoken: Economy MInister Janusz Steinhoff.
Similarly, Bartimpex, which has a stake in ERPG through Gaz Trading, filed court papers to sue Economy Minister Janusz Steinhoff, who criticized the handling of the pipeline and urged the government to restore its control over the facilities. He argued that the 1993 document envisaged a balance of power between Poland and Russia in matters relating to the Yamal pipeline. Bartimpex charged that Steinhoff did not properly look out for the interest of Polish enterprises in international activities, according to Pawel Badzio, spokesman for the Economy Ministry.
But Poland's equivalent of the attorney general said there was no reason to continue the case against Steinhoff, according to Badzio. "Our response was that we have a duty to increase the share of the Polish treasury and not the activities of Polish enterprises," he said. "For us, the most important issue was the gas pipeline and the agreement about how it (would be) run. The details of the discussion of the telecom matter are between PGNiG and Gazprom."
PGNiG says it wanted to fulfill the terms of the 1993 agreement. Whereas there was once talk of PGNiG wanting to remove Gaz Trading from ERPG's ownership, the Polish gas company now says it is not talking about changes in ERPG since the firm has to find capital to pay for the construction of the gas line's additional three compressor stations on Polish territory.
But the Polish government wants to ensure that PGNiG has tighter control over both the pipeline and its accompanying fiber-optic cable. "The problem is a matter of controlling this telecom cable, and we want to make the situation so that PGNiG (has) control of the cable on Polish (territory)," said Badzio, adding that the Polish government still wants the state company to increase its current 48% stake in ERPG to more than 50%. "In the future we could have some gains if it (the fiber-optic cable) is used not only for the needs of telecom services for servicing the pipeline," he said.
Polish officials would continue their discussion of the Yamal pipeline and fiber-optic cable with Russian diplomats during a visit to Warsaw planned for the end of April, Badzio said.
For now, ERPG's plans to finish the fiber-optic line remain on hold, and the company doesn't know when it could complete the project.
Yet, ERPG hinted that it would be a contender in Polish telecom services.
"Thousands of fiber-optic lines have been constructed in Poland so far," said Tarkowska. "Despite that, there is great interest in the exploitation of the Yamal pipeline's fiber-optic line. However, it is still too early to talk about the details."
