Railway workers’ blockade ends in agreement

In several cities across Poland, trade unions staged protests by blockading railway lines in their demand for higher wages. The organisers warned that, if no agreement was reached with the directors of the national railway operator, Polish National Railways (PKP), they would stage a warning strike, followed by a general strike. However, the workers’ protest ended in the conclusion of an agreement between railway unions and management. Meanwhile, the government has adopted two legislative draft acts which provide for the repayment of PKP’s substantial debts.

Wage dispute

In mid February 2007, railway workers began blockading railway tracks in a number of major cities across Poland. The workers’ primary demand related to higher wages. The direct impetus for their protest was the breakdown in negotiations after several months of talks between railway unions and the board of directors at PKP Polskie Linie Kolejowe S.A. (PKP PLK), one of the companies of the Polish National Railways (Polskie Koleje Państwowe, PKP) group. The trade unions were demanding a general improvement in working conditions and a net pay increase of PLN 100 (about €27 as at 25 April 2007); however, the directors were only willing to offer an average increase of PLN 50 (around €13).

The leadership of the national railway workers’ section of the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ Solidarność), which had endorsed the protest, argued that PKP PLK personnel had not received any pay raises whatsoever in 2006. Furthermore, a system-wide increase had been promised for 2007.

The protesters warned that, if the results of the discussions with management were unsatisfactory, the protest action would escalate into a warning strike, culminating in a general strike.

Agreement reached

In the end, however, the protest ended in the positive conclusion of an agreement between the railway unions and the board of PKP PLK. The agreement introduces, from 1 April 2007, a system-wide pay increase for railway workers, remunerated in accordance with the in-house labour agreement for the company’s employees. The directors also promised to bring into effect the organisational changes called for by the trade unions.

Government strategy for debt recovery

The conclusion of the dispute at PKP PLK has coincided with the adoption of two legislative draft acts by the Polish government:

• the Act regarding commercialisation, restructuring and privatisation of the state-owned PKP enterprise;

• the Act regarding rail transport.

Among other provisions, these statutory drafts stipulate that the PKP group will receive a loan of PLN 1.86 billion (approximately €492 million) out of the national budget towards the repayment of debts of one of its subsidiaries, PKP Przewozy Regionalne. The remainder of the company’s debts, totalling around PLN 5.5 billion (€1.5 billion), is to be repaid using funds accrued by the state from excise taxes on fuel, thus consuming 7% of the state’s earnings in this respect. At the same time, the debts of the entire PKP group owing to the Ministry of the State Treasury (Ministerstwo Skarbu Państwa, MSP), including overdue payments, are to be converted into PKP PLK shares, which are to be taken over by the MSP in a ‘debt-for-equity’ swap.

In the case of PKP Przewozy Regionalne, the railways are to borrow the requisite funds from the state; in return, the MSP will receive shares in PKP Przewozy Regionalne, which it will then pass on to local self-government entities; the latter will, in turn, assume the ownership title of these shares pursuant to a statutory instrument.

Meanwhile, the draft ‘Strategy for railway transport to 2013’, adopted by the Polish government, provides for the flotation of PKP Intercity and PKP Cargo on the stock exchange. The government strategy also makes reference to debt relief for the entire PKP group. For instance, the debts of PKP Przewozy Regionalne are to be cleared by 2009; at the same time, repayment of the entire PKP group’s debts are to be spread out until 2020.

Commentary

The public aid packages envisaged for Poland’s railways in the aforementioned documents must still be approved by the European Commission. Therefore, it is too early to determine whether their scale will be realised in practice. However, it is clear that railway workers, as well as members of the public, consider that an overhaul of Poland’s rail transport system is long overdue.

Jacek Sroka, Institute of Public Affairs (ISP)