Transportation Ministry gets EBRD loan for PKP layoffs

The Transportation Ministry has negotiated a loan from the European Bank for Reconstruction and Development (EBRD) for Polish State Railways (PKP) amounting to euro 100 million,which will be spent to trim its workforce. Minister Jerzy Widzyk is certain that this loan will be sufficient for reduction of employment from its present level of 185,000 to 135,000. Widzyk said talks are also underway with the World Bank for another loan of $150 million to support further layoffs. A bond issue amounting to zl.3.9 billion guaranteed by the State Treasury will pay off the loans. The Minister is confident that Poland will join the European Union (EU) in 2003 and thus receive EU funds. Workforce reduction will enable the Ministry to commercialize PKP on Dec. 31 of this year, and beginning in January 2001 it will operate as a holding company The Ministry estimates that spending on road and railway infrastructure will increase from the present level of euro 180 million to euro 1 billion over the next three years (Puls Biznesu, pp. 1, 9)