Shipyards: Another Breath of Life

The government has managed to withhold a drastic EC decision on returning public aid by Polish shipyards, but the phantom of bankruptcy continues looming over them.

Slawek Szefs reports from Polskie Radio

The government in Warsaw, especially treasury minister Aleksander Grad and his team of experts, took to heart a strong worded statement by European Commissioner for Competition Neelie Kroes who set a non- extendable Thursday midnight deadline for supplementing necessary information on the state of the privatization process of three major Polish shipyards: 'Using football terms, the time is indeed over. It's extra time, so to say, penalty time. Minister Grad got, again, extra time and we told him that he has to fill in the condition list, which we presented a long time ago.'

The mentioned terms were effective restructuring guaranteeing the Gdansk, Gdynia and Szczecin yards long term profitability of operations coupled with a reduction of production potential. Should the Polish government fail to come up with substantial proof of actions aimed at achieving these targets the European Commission threatened to order the return of public aid received by the three shipyards. The sum in question amounts to 5 billion zloties (roughly 1.5 billion euros) so this would surely entail their automatic bankruptcy.

Minister Aleksander Grad was hopeful the last minute documents sent to Brussels would be satisfactory for the European Commission to review the case favorably. At a press conference late Thursday afternoon, he said a positive decision of the EC would enable the Polish government to start working on the much awaited privatization agreements with potential investors: 'There is a list of investors.

We have relevant restructuring programs expected by the Commission, concerning the Szczecin yard and a joint project for Gdansk and Gdynia. Also the introduction of production limits, adequate individual investor share in company capital, investment outlays. It's all contained in these programs.'

The Polish treasury minister also assured that the terms of the shipyard privatization contracts signed would be made public.

It now remains to be seen whether the optimism of the Polish government is shared by the European Commission. Its spokesman Jonathan Todd did not present any concrete schedule for the evaluation of the projects, but conditioned it on the content of the documents received from Warsaw: 'Timing of our decision will depend on what we receive. If the Commission sees immediately that the plans are insufficient, then a negative decision could be taken within a matter of weeks. If, on the other hand, the plans are substantive and the Commission considers them to be viable, then the Commission will probably take a little longer to reach its decision.'

For the time being the EC clock continues ticking for Polish shipyards. The longer, the better...