Poland-born reformist head of Ukraine's rail monopoly resigns

Poland-born reformist head of Ukraine's rail monopoly resigns
By bne IntelliNews August 9, 2017

Wojciech Balczun, a Polish citizen appointed in 2016 to head up the Ukrainian state-owned railway monopoly Ukrzaliznytsia, has submitted his resignation from the post citing a "negative PR-campaign and even sabotage" against him.

Balczun, appointed in April 2016 in a move broadly welcomed by investors to reform the notoriously corrupt and inefficient company, has been in conflict with the infrastructure minister, Volodymyr Omelyan, who criticised his performance. However, analysts also note that for most of his one-year tenure as CEO, Balczun tried to optimise the company’s procurement policy, inevitably earning him a lot of enemies.

"This was the most complicated and important mission in my life," Balczun wrote on his Facebook page on August 9. "The situation I saw [in the company] was more complicated that I could imagine... We have stabilised the company, improved all economic figures, drew up a five-year strategy, restored reputation of the company on the international level, returned to investment and launched new passenger routes."

Balczun signed a one-year employment contract that ended on June 5, 2017. However, in June the monopoly said that the CEO is eligible to hold his position for the next two years. The resignation followed bitter criticism of Balczun's opponents, including Infrastructure Minister Volodymyr Omelian, who expects the CEO's swift replacement.

Ukrainian Prime Minister Volodymyr Groysman said the same day at a government meeting in Kyiv that Balczun "has made this decision himself – this is his decision and I respect his decision".

The move followed an appeal made by Ukrainian Prosecutor General Yuriy Lutsenko to Groysman not to renew the contract with Balczun.

According to Lutsenko's letter dated August 2, published by the Ukrainska Pravda online outlet, the country's law enforcement authorities are investigating around 90 criminal proceedings into instances of alleged misappropriation, embezzlement and seizure of property through abuse of office by officials of the rail monopoly.

In particular, the Prosecutor General's Office (PGO) is investigating the misappropriation of state funds by employees of Ukrzaliznytsia in 2015-2017 in the amount of more than UAH150mn (€4.9mn) through concluding fraudulent contracts.

"With Balczun, an acclaimed manager of Polish origin, Ukrzaliznytsia got a fresh chance to reform itself and change its business and marketing strategy for the better," Alexander Paraschiy at Kyiv-based brokerage Concorde Capital said. "Therefore, his resignation – after just a year and three months – will likely be treated negatively by Ukrzaliznytsia investors."