Opposition bemoans last chance privatisations

“CVC turned out to be the best partner and has submitted the best bid with the highest price,” Jakub Karnowski, PKP CEO, said.

The total value of the transaction is PLN 1.96 billion, but after deduction of the company's debt it amounted to PLN 1.41 billion.

The money will go to repay the company’s debts (currently approx. PLN 770 million), as well as co-financing investments of approx. PLN 400 million in PKP Intercity, for a programme of modernisation and repair of Intercity trains.

“To date we have used mainly EU funds and had no funds of our own. Now we want to recapitalise Intercity to better prepare the company for privatisation,” Karnowski said.

“We want to make PKP Energetyka an international company," Stephen Stolz, a partner CVC responsible for Central and Eastern Europe, told reporters.

CVC has promised that within five years it will invest approx. PLN 2 billion in the company. The fund signed an agreement with trade unions and both sides pledged to respect a collective agreement and employee guarantees until 2019.

PKP Energetyka is a nationwide power distributor to the Polish railway network and other customers. It provides maintenance and emergency response services to the railway network, also running fuel stations for diesel locomotives and is active in electricity and gas reselling.

The deal has come in for criticism from members of the opposition Law and Justice (PiS) party. Some PiS MPs on Thursday filed a complaint to the prosecutor's office in connection with the transaction, arguing that the government was rushing through privatisations before the general election in late October to fill holes in the budget and to the detriment of the national economy.

PiS MPs also complained about Tuesday's deal that saw Netia complete the acquisition of TK Telekom for PLN 221 million. The company supplies the PKP PLK rail network. (jh)