Polish Business Survey
Tight monetary policy likely
The cabinetŐs financial advisor committee (RPP) has published a document with its plans for next year. It is clear that the RPP hopes to reduce inflation to four percent by 2003 although it is aware that only tight policies are likely to bring this about. It is therefore clear that only very small drops in interest rates can be expected, even in the case of significant falls in the rate of inflation, particularly in the case where price drops are the result of over production of raw materials or foodstuffs and not as a general trend in reducing prices.
Banks unworried by rate hikes
Market observers have noted that despite changes in the interest rates, the banks are doing well and are not frightened of a tightening of fiscal policy if the government does not reach its inflation targets. This is despite defaults on credits increasing by 15 percent over recent weeks. Unfortunately these changes in interest rates do worry almost every other sector of the economy.
Cash expected for trains
The transport ministry believes that in three years time their budget will increase from the present level of EUR180m to EUR1bn annually. In order to finance restructuring of the railways, the department is now negotiating with the World Bank and EBRD for a credit of EUR1.2bn. Jerzy Widzyk, heading the transport ministry, believes that part of this loan, EUR100m, can be expected in the next few days.
Next year the first tranche of a EUR3.9bn bond issue will be offered. Widzyk is convinced that the funds required to reduce employment from 185,000 to 155,000 will be raised.
From next year PKP will function as a holding company with separate entities for cargo, passenger transport, infrastructure etc. . Furthermore other companies such as those offering local transport in Warsaw and Gdańsk like WKD and SKM will be hived off to private investors.
Insurer raises capital
Insurer Agropolisa is to increase its capital from EUR34.4 to EUR64.4m. Management hopes that this will allow the company to act independently in Poland within the Belgian KBC group.
Another chance for PLO
A Gdynia court has accepted that the bankruptcy of Polish Ocean Lines (PLO) be postponed. The company intends to use the breathing space to concentrate on its cargo routes in which it will work with PKP Cargo.
No VAT increase
The plan to increase VAT in the construction industry has not got out of the finance industry and has failed to get the support even of all the minority ruling AWS MPs. It would seem that it will stay at seven percent, at least for next year.
Tele2 spending here
In the next three years the Swedish Tele2 has announced that it intends to invest USD50m in Poland. The Scandinavian company was the first to offer a prepayment system for conventional phones and believes it will have 50,000 clients before the end of the year. It now also claims it wants to offer new services such as data transmission, internet access and internet telephones. Internet access is currently only available to business customers.
Still no steel vortal
ComputerLand and Stalexport, after having announced in June that they intended to create an internet based steel trading vortal, have still not been able to get their act together. Rumour now has it that Stalexport wants out.
Shareholders can t agree
Representatives of the treasury, BIG BG bank and Eureko have again been meeting to discuss the future of insurer PZU. However it would seem that no agreement on the future is likely to be reached before today s shareholders meeting. The sides are trying to find common ground concerning the future further privatisation of the company in which BIG BG and Eureko are minority shareholders.
Alcatel installs digital network
Alcatel Polska has concluded a EUR3.1m contract with Tel-Energo to build a synchronous digital hierarchy teletransmissions network to cover the whole country. This will enable Tel-Energo to offer its clients rapid internet access, data and video transmission as well as being able to rent air canals to other operators. This network will come into being at the beginning of the year and will link Warsaw, Kraków, Katowice, Kielce, Bydgoszcz, Radom, Łódź, Poznań, Gdańsk and Lublin.