UPHEAVAL at Polish State Railways looks inevitable as management and government struggle with the complexities of restructuring and possible privatisation. While the imminent order for high speed tilting trains (p563) suggests that PKP is up with Europe’s leaders in technology and expertise, much ground has to be made up in financial and management terms. The size of the gap was underlined on July 17 when PKP filed a lawsuit with the ministries of transport and finance claiming payment of overdue subsidy - PKP’s view was that both had failed in their duties under Polish law.

Further confirmation of thepoor relationship between the parties involved came on July 30 when the cabinet’s economics committee threw out a draft restructuring plan prepared by the transport ministry. This included a proposal to separate infrastructure from operations in line with EU policy, but the plans were not considered sufficiently detailed. A revised submission was due last month.

Last year PKP received 710m zloties in subsidy, and this year it has asked for 895m, but the government has only agreed 560m. A request for 803m zloties for upgrading works drew a response of only 268m. The finance ministry is trying to force PKP to slash costs, cut the 220000 payroll and rationalise its operations, but PKP needs a measure of management freedom in return.

While the government insists on having the last say on fares, tariffs and other matters properly left to management, little progress can be expected. It is a familiar story, and all parties, including staff who protested with widely-publicised strikes in June, could learn lessons by studying what has happened elsewhere to railways that fail to tackle the issues of productivity and performance in a competitive world. Whether before or after privatisation, tentatively suggested for 2002, the issues simply have to be faced. o