World Bank to provide PKP with euro 110 million loan

The debt-ridden Polish State Railways (PKP) is to receive a credit valued at euro 110 million from the World Bank to cover part of the cost of restructuring its workforce. The Polish government has set PKP a target of reducing the number of its employees to 145,000 by the end of 2002, and this is expected to cost the company $335.3 million. PKP had managed by March 1 to reduce the size of its workforce to 166,050, from 169,471 at the end of last year. The remainder of the funds PKP needs for the restructuring will be provided by the European Bank for Reconstruction and Development and several other international financial organizations. PKP will repay the loans with capital raised from the sale of two of its smaller component parts - PKP Cargo, and its railway telecom and IT unit. The two will be separated from PKP in June and will begin independent operations in September or October. Their sale will take place in 2002 at the earliest. (Prawo i Gospodarka, p.3) J.K.