MONDAY |SEPTEMBER 15, 2008 | PHILIPPINES

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Poland to submit Baltic
shipyard rescue plan


WARSAW - Poland will submit restructuring plans aimed at saving its Baltic shipyards to the European Commission, in compliance with an EU-imposed deadline, Treasury Minister Aleksander Grad said.

If the Commission, the European Union's executive body, rejects the plans, the three yards will have to repay illegal state aid totalling more than 2.3 billion euros ($3.22 billion), forcing them into bankruptcy.

"We will send (the plans to Brussels)," Grad told PIN radio.

"I think the analysis of these documents will take some time, but we need to get an answer by October because the uncertainty is killing the yards," Grad said.

State-owned Gdynia and Szczecin and the privatized Gdansk yards employ about 15,000 workers but Polish officials say as many as 60,000 jobs could be at risk if suppliers and related sectors are taken into account.

Successive Polish governments have failed to settle the fate of the symbolically important shipyards, the cradle of the Solidarity trade union that helped topple communism in 1989.

Grad did not say how many redundancies are envisaged in the restructuring plans, which involve the payment of further state aid - permissible under EU rules provided it leads to the long-term financial viability of the companies concerned.

"But productivity must rise if the shipyards are to operate in a normal way. Of course, employment is too high in some shipyards, especially in the administrative sector," Grad said.

The yards have not made profit on a single ship built since at least 2004, when Poland joined the EU, and would not have survived without subsidies, though analysts say that, properly managed, they could flourish.

If the Commission accepts the government's restructuring plans, Warsaw would then have to prepare privatization plans for Gdynia and Szczecin.

Ukraine's Industrial Union of Donbass, which owns the Gdansk yard, is interested in buying Gdynia while private Polish firm Mostostal Chojnice wants to buy Szczecin. - Reuters

   






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