“There is no legal basis for compensation”. What next for the rail carrier?

“There are no grounds for the Minister of State Assets to sign an agreement with PKP Cargo based on the decision issued by the Prime Minister on July 25, 2022,” believes the Ministry of State Assets (MAP). According to the Ministry of State Assets, the transport costs referred to in the decision have been fully covered for PKP Cargo.

It concerns two decisions of the then Prime Minister Mateusz Morawieckiregarding the transport of coal from Baltic ports. According to the company, these decisions constituted interference with the freedom economic activity.

“It seems that the potential expectation of PKP Cargo to pay compensation for costs other than transport costs related to the implementation of the decision is not covered by the decision,” MAP noted in response to questions from PAP.

The PKP Cargo authorities sent a letter to MAP regarding compensation for the implementation of the so-called coal decision. The company is of the opinion that the necessity to implement the decision resulted in the termination of many transport contracts with customers, which exposed it to losses and is one of the reasons for its poor financial situation.

At the beginning of August, PKP Cargo also sent an appeal to the Prime Minister. Donald Tusk for urgent compensation payment. However, she did not specify the amount she was applying for. “Due to the confidentiality of information, at this stage we cannot provide any information in this regard,” reads the response from the acting director of the PKP Cargo promotion and communication office, Julita Sołtysiak.

According to PKP Cargo, the implementation of the coal decision has significantly worsened the company's already bad situation.

In addition, the company recently announced that the District Prosecutor's Office in Warsaw has initiated an investigation into failure to fulfill obligations and abuse of power in the company in the period from July 25, 2022 to July 31, 2023. According to information from PKP Cargo, the case concerns the aforementioned coal decisions.

On July 27, PKP Cargotabor filed a motion to open restructuring proceedings and to declare bankruptcy. As PKP Cargo reported at the time, these motions were a consequence of the filing on June 27, 2024, of a motion to open restructuring proceedings by PKP Cargo – the 100% owner of the subsidiary and its largest customer in arrears with settling receivables.

In a press release, the company explained that the restructuring proceedings were initiated at the request of the PKP Cargo management board and are aimed at saving the company, restoring its liquidity and competitiveness in the long term, while maintaining as many needed jobs as possible.

In mid-August, the company launched a group layoff process that will cover 30 percent of its employees, up to 4,142 employees in various professional groups. Employees who terminate their employment under the group layoff will be entitled to a severance payment based on their period of employment.

The Management Board also takes actions aimed at providing employment for the company's employees in other companies in the railway and transport sectors.

PKP Cargo is the largest rail freight carrier in Poland. As a Group, it offers logistics services, combining rail, road and sea transport. It provides independent freight transport in Poland and Czech, Slovakia, German, Austria, Netherlands, Hungarian, Lithuania and Slovenia.

The largest single shareholder of PKP Cargo is PKP SA, which holds 33.01 percent of shares.