NIK: PKP derailed due to poor financial management

A report by the Supreme Board of Inspection (NIK) charges the former and incumbent executives at the Polish State Railways (PKP) with mismanagement, causing losses of some zl.300 million. NIK says PKP's liquidity ratio, optimally around 1.5-2.0, reached 0.66 in 1999. Although most of the charges presented by NIK concern decisions of the former PKP board of directors headed BY Jan Janik, auditors also put some of the blame on present management, including president Krzysztof Celinski. According to the report, PKP financed its current activities with money earmarked for investments as well as with bank loans, thus breaching loan agreements. In 1998, zl.48.2 million was misappropriated in this way, and a further zl.14.9 million last year. The report also charges that PKP spent zl.65 million of its own funds plus a $44 million World Bank loan to implement a modern management system, but none was created. PKP also signed a zl.95.2 million deal with Adtranz Pafawag to buy 22 locomotives, but then failed to ensure proper execution of the contract, and no deliveries have been made to date. NIK also accuses the Transport Ministry of not having exercised sufficent control over PKP. Authorities of PKP as well as the Ministry say they have serious reservations concerning the document, but would not disclose any details. (Puls Biznesu, pp.1,3) J.K.