Point man on Polish coal rescue denies trying to quit

By bne IntelliNews August 28, 2015

bne IntelliNews -


Poland's efforts to put together a rescue for its struggling coal industry were hit by another setback as the official charged with pushing through the plan reportedly tried to quit on August 27, apparently over his failure to break the resistance of the state-controlled companies targeted to provide the money to finance the scheme. Deputy Treasury Minister Wojciech Kowalczyk later denied the reports he tried to quit, vowing to continue until the job is done.

According to Puls Biznesu, Kowalczyk, who has led the effort to bail out and restructure state coal holding Kompania Weglowa (KW) since it was agreed with unions in January, grew tired of the seemingly endless negotiations with state power companies and handed in his resignation. However, Treasury Minister Andrzej Czerwinski refused to accept it. Kowalczyk denied in a statement on August 28 that he tried to quit.

The newspaper also reports that the head of KW has also wearied of the fight. Krzysztof Sedzikowski is also said to have sent a letter to Czerwinski. The move threatens to disrupt an August 31 supervisory board meeting that planned to thrash out the final package to save the coal company. 

The CEO warned in July that KW would slide into bankruptcy unless it receives PLN1.5bn (€354mn) in funding by the end of August. Kowalczyk has since been fighting with the likes of PGE, Enea and Tauron to push them into investing in the coal miner. 

However, all of these listed companies – which are controlled by the Ministry of Treasury – baulked at the cost, insisting that investing in KW makes no economic sense for them. August has seen the situation grow increasingly tense. The treasury ministry denied in mid-August it had threatened to fire CEO's and boards, though local media insist that such intimidation has been used during the fiery negotiations.

The resignations, just days ahead of Sedzikowski's end-of-month deadline, bode ill for the rescue effort. That raises a nightmare scenario for the ruling Civic Platform, just two months ahead of elections, with the party already trailing heavily in the polls. 

The pressure already saw the government forced by unions to backtrack on plans for a deep restructuring of the coal industry, which is struggling due to inefficiency and low market prices. Unions have recently reiterated threats that they will launch protests should the funding to save KW not be secured this month. 

Officials will be relieved then that Kowalczyk denied on August 28 that he wants to drop out of the fight. "The media reports according to which I tendered resignation from my functions are untrue," the official claimed in a statement, according to PAP. "It is my intention to continue the process of restructuring of the coal mining sector."

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