WB to lend PKP zl.410 mn, one-third less than expected

The Polish State Railways (PKP) will receive from th World Bank a zl.410 million loan, not zl.600 million as originally planned, and as a result will increase its bond issue from zl.1.7 billion to zl.2 billion. "The reason for the cut in the loan amount is that PKP wants to use it to finance severance packages for laid-off workers. This means that the lender has to pay taxes on the benefits and we do not finance taxes," said World Bank expert Robert Kietlinski. PKP management has therefore decided to increase the size of its bond issue, which will be offered in the second quarter of this year. PKP will also be using funds from a euro 100 million loan from the European Bank for Reconstruction and Development (EBRD) to finance the planned reduction of 23,000 out of 168,000 jobs. Kietlinski said that staff cuts are a priority for the ailing railway operator, as personnel costs amount to more than 50% of the company's operating costs. By the end of this month PKP should announce its financial results for 2000, audited by Arthur Andersen. (Puls Biznesu, p.6) T.J.