PKP forced to close regional routes
Polish State Railway's (PKP) decision to close 1,000 kilometers of track designated for regional passenger traffic is unlikely to improve its bleak financial situation, rail watchers said last week.
"The financial effects will not be seen," said Henryk Klimkiewicz, president of rail consulting company Zespol Doradcow Gospodarczych TOR (ZDGT TOR).
PKP suspended passenger regional rail April 3 in the Lubelskie, Dolnoslaskie, Opolskie, Malopolskie, and Warminsko-Mazurskie voivodships, citing operating costs and low passenger volume, said Piotr Faryna, legal representative for ZDGT TOR. According to Roman Hajdrowski, press spokesman for PKP's management board, revenue from ticket sales for the area on average covered not more than 24% of total operating costs.
"We are simply a commercial enterprise acting on a market economy," Hajdrowski said. He added that within the European Union (EU), local governments usually fund regional passenger service on the rails. Hajdrowski could not give a figure for the amount of money saved as a result of the suspensions, but he did note their size. "Savings will be very big," he said.
"Nobody will tell you, because it is a secret," Faryna said of the savings. While he estimated that cars running on the lines were no more than 25% full, closing the lines is not expected to yield great cost savings unless the railroad also slashes jobs that used to be devoted to the routes.
"If there will be a reduction of personnel immediately after the closings, then the railroad will save money," he said.
Personnel make up more than 50% of PKP's fixed costs and the railroad currently employs just under 200,000 people. Plans to downsize the railroad's workforce are part of a bill on restructuring, commercializing and privatizing the railroad currently stuck in the Sejm's transport committee. Labor issues have become a major stumbling block in moving the bill forward to the lower house. The bill has virtually zero political support; even Transport Minister Tadeusz Syryjczyk has reportedly distanced himself from it.
In the meantime, PKP's financial situation continues to deteriorate. Losses for 1999 came to zl. 2.27 billion ($583.3 million), while debts for the railroad are approaching zl. 7 billion ($1.79 billion).
The situation for regional rail service could worsen in coming months. Faryna said there are plans to suspend another 2,000 kilometers of passenger service by the beginning of June. Although Hajdrowski did not say how many kilometers would be closed in the future, he warned that if the dire situation of regional passenger traffic does not improve, the railroad will likely close even more routes.
Changes, however, are coming for a certain part of regional rail service. One source close to PKP's privatization said that plans exist to release a tender for hiving off light-rail line Warsaw Commuter Railroad (WKD), although the form of that tender is not clear.
