Polish Railways may be heading for huge financial crash

The agreement signed in March 2004 envisages that the company's creditors will annul part of its debts (zł.762 million), but only under the condition that Przewozy Regionalne pays the remaining zł.700 million in several installments over the next two years. However, the company lacks the funds to pay even the diminished debt. According to the estimation of the Transport Consultants Group TOR, Przewozy Regionalne's liabilities may increase to zł.2.4 billion by the end of next year. TOR also predicts that if subsidies from the budget remain at the current level (zł.400 million a year), in 2008 the debts will amount to zł.4 billion, and in 2013 they could exceed zł.6.5 billion. The worst-case scenario assumes that Przewozy Regionalne's loss till 2013 will be zł.500-600 million a year. The financial breakdown in Przewozy Regionalne would result in a radical decrease in the number of active trains, and would seriously affect other companies from the PKP group, such as PKP PKL and PKP Energetyka, as well as other service providers. (Rzeczpospolita, August 20-21, p. B3)