PKP backs out of high-speed train deal with Fiat
Polish State Railways (PKP) last week cancelled a $200 million contract to purchase new Pendolino tilt trains, citing internal changes and poor financial conditions that generally rule out introducing modern, high-speed service anytime soon, the company said.
While the railroad is in the process of making changes, projects for such trains cannot be undertaken, said Roman Hajdrowski, PKP press secretary, in a written statement dated Dec. 7. PKP didn't rule out further cooperation with Fiat Ferroviaria, the company supplying the Pendolino trains. However, further cooperation would be on a lesser scale, Hajdrowski said, without specifying a timeline for consideration. The railroad's decision to cancel any plans does not reflect on Fiat, he said.
Any resumption of the plan to purchase the high-speed passenger cars won't come for several years, said another source within PKP who requested anonymity. Fiat was not available for comment, despite attempts to contact them.
"What has happened here is nothing more than a recognition of reality," said Richard Cottrell, vice president of Rail Polska, which has expressed interest in becoming a strategic investor in the privatization of Poland's rail network.
In July 1998, Fiat beat AdTranz and Siemens for the contract to provide PKP with 16 tilt trains, which can achieve speeds of up to 250 kilometers per hour.
But no contract was ever signed for construction and delivery of the new trains because financing issues were never solved. Talks with banks on financing the new trains fell through in September, said the PKP source.
Although the Pendolinos would run primarily on the InterCity lines, on the Gdynia-Warsaw-Krakow corridor, problems exist within the infrastructure itself speeds on many parts of the corridor are restricted to 125 kilometers per hour, and a new signaling system would also be necessary to accommodate the Pendolinos.
"You need to replace the signaling system completely, and modernize the control center," Cottrell said. "If you are going to throw money at something big time (within PKP), this is where you throw it." Cottrell also spoke about first investing in new rolling stock for both passenger and freight service to further develop these sectors. Then the railroad can start examining high-speed tilt trains.
But PKP's financial situation allows little more than maintenance. Losses for this year are forecast at about zl. 1.9 billion (more than $452 million). But railroad watchers think the number could be well beyond that. Also, there is a spending moratorium on simple upkeep of buildings, such as painting or garbage removal. And things could get worse for the railroad in 2000. About 6,000 kilometers of railway are to be closed, and approximately one in three trains run the risk of being cancelled if proper funding for them is not found. A potential result could be a rise in over-the-road shipping costs.
