Don't judge Poland by the Kaczynski twins

In todays IHT we can read an editiorial comment about Poland as follow:

Politicians in "old Europe" can barely conceal their frustration over the behavior of Poland since it entered the European Union.

Instead of swiftly adopting Western standards of democracy and tolerance, Polish politics has been filled with grating talk about religion and nationalism.

The political rise of President Lech Kaczynski and Prime Minister Jaroslaw Kaczynski has done nothing to allay these concerns. To many Europeans - and many Poles - the 57-year-old identical twins and their conservative Law and Justice Party represent a worrisome brand of retrograde politics.

But it is too soon to write off Poland. Other former Communist countries have lurched to and fro politically as they sought their footing in a new universe. Europeans should show a little forebearance, and try to persuade Poland to move toward the EU's standards of democracy, rather than alienating the Poles by treating them as grubby, unwelcome country cousins.

That does not mean that Poland's neighbors should not make it clear that some of what the Kaczynskis profess on homosexuality, abortion and womens' rights, for example is, indeed, unacceptable. It is not in Poland's best interests for its leaders to maintain an alliance with the ultraconservative Roman Catholic League of Polish Families, which is widely seen as anti-Semitic, and the populist, Polish Self-Defense Party, which preaches against the new pan- Europeanism.

The twins' clumsiness in dealing with the outside world is also harmful, especially their seemingly visceral hatred of Russia and Germany. When a left-wing paper in Berlin, Die Tageszeitung, ran a satirical article about Lech Kaczynski's aversion to all things German, the twins lashed out furiously, comparing the article to Nazi propaganda, demanding that the German government do something about the crime of insulting a head of state and canceling a Polish- German-French summit meeting. The very fact that President Kaczynski, who was elected last October, chose to name his brother as prime minister after insisting that he would not, smacks of shifty politics.

But to view the twins as a reflection of all Poland, and to use that as an excuse to condemn the induction of former Soviet satellites into the EU, is both unfair and unwise. The Kaczsynskis cut their teeth fighting Communism, and much of their thinking was shaped in that struggle.

That does not mean their conclusions are shared by all their countrymen. Many Poles have been embarrassed by their statements and disappointed in their failure to do anything about very real economic problems, including an unemployment rate of 18 percent.

There is no reason to treat the Kaczyniskis with kid gloves, but Europe should be able to take a long enough view to trust that the democratic process will ensure they are not a permanent fixture. It would be tragic to poison Poland's relations with the rest of Europe this early in the game.

Source: the International Herald Tribune

Poland's President on relations with Germany

Polish-German relations are determined by Warsaw's interests and Germany's position, Poland's President Lech Kaczynski told Polish Radio Three.

Plans to build the Baltic pipeline are not in Poland's interest, neither is an exhibition devoted to German expellees, which is to open in a prestigious place in Germany on August 20.

Giving a relative dimension to responsibility for World War II, and such voices are increasingly strong, is not in Poland's interest either – the President said. Asked whether Poland's reaction to an article in the German daily Die Tageszeitung, satirizing the Polish President and his brother, was not too emotional, Lech Kaczynski said the article "exceeded all boundaries".

Source:

Tesco buys Casino stores in Poland

Leader Price, which made sales of more than €240m in 2005, will be added to Tesco's existing 107 stores in Poland, and could been seen as something of a coup, regarding rival retailer Carrefour's interest in the sale as well.

The deal, widely expected by analysts, expands Tesco's reach in one of its most important emerging markets.

The group employs 200,000 people in Poland and claims to source 1,500 products from inside the country.

“Poland is one of Tesco's success stories of the last ten years,” said professor Joshua Bamfield, director of the Centre for Retail Research.

He suggested Tesco's success in Poland may have helped push Casino into a sale. “When these new markets emerged, western companies all wanted their share – unfortunately not everyone can get the prizes.” Tesco's better efficiency, he added, had helped it to get ahead of rivals.

Any thoughts Tesco may have of dominating Eastern Europe's food retail market still require more work, however.

The firm reportedly only has a 5.5 per cent market share in Poland, although it also owns stores in Hungary, Slovakia and the Czech Republic.

And it may face more competition from France's Carrefour, which has announced plans to double its Polish store numbers over the next five years by investing between PLZ250-300m (€65-78m) on an annual basis.

Source:

Poland, UK to sign migrant tax deal

Poland and Britain will sign a tax deal on Thursday which will relieve hundreds of thousands of Poles working in Britain from Polish tax liabilities which discourage many from returning home.

Britain was one of the few European Union members to fully open its labour market to eastern European EU newcomers in 2004 and about a quarter million Poles have officially registered there, with some estimates putting the figure much higher.

Under current laws expatriates pay British income tax, but if the same income would lead to higher taxes in Poland, have to make up for the difference on returning home.

The new agreement will scrap this obligation.

"Once this agreement is signed, the situation of Poles working in Britain will improve," Deputy Finance Minister Jaroslaw Neneman told Reuters. "(Under it) British income will not be taxed in Poland at all." Every week, thousands of Poles board planes, buses and trains to seek work. A large proportion head for Britain and Ireland.

Warsaw has become increasingly worried about a "brain drain" as many skilled Polish workers have gone abroad in search of higher incomes. The central bank has also expressed about bottlenecks in the labour market pushing up wages.

Many Poles plan to return home at some stage, hoping to invest their earnings in business or real estate, but the current tax agreement has acted as a strong disincentive.

The Rzeczpospolita newspaper calculated that a manager making 77,000 pounds a year in London would have to pay 31,000 zlotys at home in addition to UK tax.

For a waitress making 18,000 pounds, the extra tax comes in at 15,000 zlotys, a staggering 70% of the UK tax she would pay.The agreement will have to be ratified by both countries' parliaments to come into force, possibly from the start of 2007.

Both opposition parties at home and the Polish community in Britain have long lobbied for a new deal.

Source:tvnz.co.nz

Several bilateral documents to be signed between Azerbaijan and Poland

The documents will cover trade-economical sphere. The documents are expected to be signed during I meeting of interstate commission for economic cooperation between Azerbaijan and Poland scheduled for September 11-12 in Warsaw.

At the moment, the sides prepare the agenda of the upcoming consultations. The key attention will be paid to the trade-economic cooperation between the two countries.

The intestate commission was established due to the agreement reached during Azerbaijani president Ilham Aliyev’s official visit to Poland. From Azerbaijani side, the co-chairman of the commission is Azerbaijani economic development minister Heydar Babayev and from Polish sides – minister of economy Peter Vojnyak.
Source:bakutoday.net

Neckermann sees doubling of Bulgaria bookings in France, Poland and Hungary

Tour operator Neckermann, part of Thomas Cook, expects to double the Bulgarian holiday packages sold in Poland and Hungary this year, said the company's local representative Hristo Kolev.
Kolev said the number of Polish holiday-makers that will visit Bulgaria's Black Sea resorts courtesy of Neckermann is seen at 2,500 while that of Hungarians is seen at 2,500.
Thomas Cook has registered a doubling of French bookings for Bulgaria's Black Sea resorts this summer, said Kolev. A total of 6,000 French tourists have booked Bulgarian holidays so far.
Bookings at the Thomas Cook unit in Belgium are not as robust, posting a slight 2% decline year-on-year. The company expects that 15,000-16,000 Belgians will book holidays in Bulgaria this year.
The Dutch market is holding steady year-on-year with around 3,000 bookings.
Thomas Cook's German division is emerging as the only tour operator that will post an increase of bookings for Bulgaria this summer season. The company expects to sell Bulgarian holiday packages to 150,000 Germans this year, up 20% over 2005.
Sourece:news.dnevnik.bg

Poland's new leader sets pro-EU tone

Poland′s new prime minister Jaroslaw Kaczynski gave an EU-friendly speech to parliament on 19 July as deputies approved his nomination to the post by 240 votes to 205, but he fenced off social issues such as gay rights as a sovereign domain.

"The key feature of our policy is membership in the European Union. We want to be in the EU and, I stress this, to take part in everything that can lead to breaking today's EU crisis. This means finding a new [legal] foundation," he said, referring to the draft EU constitution.

On the eurozone, he added the government will stick to previous plans to cap the budget deficit at zloty 30 billion this year [€7 billion] in a "continuous" politics of fiscal discipline, but warned "we will need to use the zloty, everything indicates, for many years to come."

His words run counter to his popular reputation as a sharp eurosceptic and economic anti-liberal, with the value of the zloty falling after the sudden news, two weeks ago, that Mr Kaczynski will take the reins from his more moderate and liberal predecessor, Kazimierz Marcinkiewicz.

The new leader also used soft language on Germany and Russia, after an ugly row with Berlin over a satirical story calling his twin brother and Polish president - Lech Kaczynski - a potato. Polish-Russian relations have grated over the issue of calling Russia's 1940 murder of Polish officers in Katyn "genocide."

"It is not the role of prime minister to lead fights over the past," he stated. "I want my government and myself to form a group that works for the future. We leave these fights to historians for the time being," Mr Kaczynski explained, saying there is "much iniquity" but also "much togetherness" in Polish-Russian history.

He stressed that Poland needs to cut its energy dependency on Russia however, aligning himself with countries such as the UK, France, Finland and the Baltic states who see their future energy security in more nuclear power and the flexibility of the liquid -as opposed to piped - natural gas market.

"Should we not already be thinking about nuclear energy?" Mr Kaczynski asked, pointing out that Poland's coal-based energy sector is falling behind the times in climate change terms. "The hysteria about nuclear energy is dying down," he indicated, adding "we want to build a [liquid] gas port terminal."

Balancing act
But if the prime minister's tone-setting speech could be seen as EU-friendly, it was also a careful balancing act which preserved his Law and Justice party credentials on safeguarding Polish sovereignty and Roman Catholic values, combating corruption and improving welfare.

"In the EU, we have to maintain our ability to take our own decisions," he said. "We will strive for Poland to keep its sovereignty in the area of culture and customs. EU laws do not and should not cover this area. We are different in our traditions, and there is no point in hiding it, from many other countries."

The prime minister explained that Poland can learn from its EU neighbours on issues such as gender equality, but drew a red line around gay marriage. "Marriage is a union of man and woman. We will defend this. We will not let ourselves be told that black is white," he stated.

Mr Kaczynski's insistent support for Ukraine's full EU membership also runs counter to mainstream political trends in Brussels, with enlargement appetite cooling in key states such as France. "[Ukraine membership] is a question of completing the EU, a question of its security," he urged.

The speech also gave glimpses of that quality of Polish prickliness that equally annoys and amuses the more well-established and laid-back members of the EU club. In stressing Poland's need to use EU aid wisely, the new Polish leader checked his rhetoric and said:

"Maybe 'aid' is not such a good word. We deserve this. The course of history has run in such a way, that we really deserve this."
Source:euobserver.com

Railway in Poland: New Passenger and Freight Connections to Czech Republic

Poland and Czech Republic achieved agreement on new rail border crossings between the two countries.

- After months of discussions the Czechs agreed on launching a new passenger and freight train that will run between Głuchołazy and Jindrichov we Slesku and inaugurating passenger traffic through Głuchołazy-Mikulowice border crossing- says Tomasz Garbowski, Polish MOP.
- Diplomatic notices were already signed, the initiative now stays in the hands of self-governments - he ads.

The trains will stop in Głuchołazy, Mikulowice i Jindrichov. Opole, region that is bordering with the Czech Republic has been waiting for this decision for many years. It was the last chance to sign the agreement as the Czech partners were about to withdraw from trains running to Głuchołazy.
Source:railway-market.pl

Railway industry in Poland: PKP Intercity to invest in rolling stock

On 11 July 2006 polish upper standard trains operator PKP Intercity (PKP IC) singed 50 mln EUR worth long term (15 years) loan agreement with European Investment Bank (EIB).

This contract is a part of PKP IC rolling stock improvement program. Purchase of new 10 (one and two system) locomotives, 5 first class passenger coaches, 7 second class passenger coaches and modernization of part of existing fleet (94 first and second class passenger coaches) was already planned.
Source: railway-market.p

GE Lands $687M Casino Hypermarkets in Poland

GE Real Estate Central Europe just acquired 16 Casino hypermarkets throughout Poland from Groupe Casino, the French supermarket chain in a 100-percent equity transaction. At €550 million (U.S. $687 million), it represents the largest GE Real Estate deal in Central Europe and the second richest property transaction overall in the region. The deal is part of Groupe Casino’s exit from Poland, in which it sold nearly all its real estate to GE and its retail operations to Metro Group. “Casino tendered its real estate and operations separately and there was strong competition for the hypermarkets, which we managed to win last week,” Karim Habra, managing director of Central Europe for GE, told CPN. "Our hypermarket tenant for the next couple of months will be Casino and then the lease transfers to Metro and will become Metro’s Real hypermarket brand, which already operates in Poland, subject to approval from Metro’s board.” The leases with Metro will run for 10 years. Habra noted the significance of this deal is that it follows GE’s transaction in 2003 with Casino in which it bought 13 separate retail galleries, or centers, connected to the Casino hypermarkets in Poland for €220 million (U.S. $275 million). GE currently owns nine of the galleries. “That was a landmark deal for us, the largest in Central Europe at the time,” he said. “We tried hard to buy the hypermarkets then. It’s been a very good investment as cap rates have compressed significantly.” He added that by owning 100 percent of the hypermarket centers today, GE can better reconfigure the retail space, which currently is close to 100-percent leased, and can achieve better liquidity synergies. The 16 hypermarket centers have a total lettable space of 339,686 meters. Three are located in Warsaw, with the remainder in well-populated secondary cities around Poland, including Gdansk, Krakow, Lodz, Wroclaw and Zabrze. GE’s Central European portfolio now has reached $1.7 billion, with retail comprising 80 percent of the properties. “We believe retail offers significant growth opportunity in the region,” Habra said. “Spending per capital in Poland and in Central and Eastern Europe is increasing and rents are below those in Western Europe.”
Source: cpnonline.com

e!MAX Base Stations Delivers Broadband Services in Poland

ENTE has announced an agreement to provide its e!MAX line of WiMAX base stations to Stream Communications. The base stations will serve as the backbone for Broadband wireless network services in Bielsko-Biała, Sanok and Częstochowa.
"This agreement will benefit all businesses and residents of the three cities in which e!MAX™ will initially be deployed," said Damian Pustelnik, CEO, ENTE. "It will result in cost-effective Broadband availability, provided by an innovative, multi-media service provider that is now poised for exponential growth. It's a win for Stream Communications, ENTE and the communities we serve."
Source: wirelessinsightasia.com

Poland should be ready to adopt euro in 2009

Finance Minister Stanislaw Kluza declared in a radio interview that he aims to improve the condition of public finances so that by 2009 Poland could meet the convergence criteria and be ready to adopt the euro as national currency. According to Kluza at the moment there is no point in setting the date of euro adoption before these criteria are met. The Maastricht Treaty stipulates that all EU member states are to adopt the euro eventually.
Source:Radio Polonia

Rexam opens packing plant in Poland

Rexam, the British company that bought packaging producer Precise Technology Inc. last year, has opened its first plastic packaging plant in Poland.

The new facility, located in Łódz, is the first manufacturing plant dedicated to Rexam Home & Personal Care in Central and Eastern Europe.

The project was launched by Pittsburgh-area Precise Technology prior to its acquisition by Rexam last December.

Rexam, which produces packaging and beverage cans, acquired Precise for $257.5 million from Chicago-based investment firm Code Hennessy & Simmons LLC. Rexam has 23,000 workers worldwide, including more than 3,000 in the United States.

The Home & Personal Care division, based in North Versailles, Pa., is overseen by Mike Farrell, the former president of Precise.

Rexam (NASDAQ:REXMY) has two plants in Poland that are used by its glass-making unit.

Source:pittsburgh.bizjournals.com

Railway in Poland: PKP Unable to Take Advantage of EU Money

Experts say that there is no way Poland could make use of more than 66% of the sum provided from the EU Funds for infrastructure investments that are managed by Poland's national infrastructure manager PKP PLK.

Experts employed by PKP PLK's contractors claim that according to the optimistic scenario PKP PLK is capable to take advantage of PLN 1bn (EUR 249m) of the PLN 1.7bn (EUR 423m) sum programmed by the EU Funds for rail infrastructure projects in 2006. The reason is that there are huge delays in preparing the projects for realisations.

— This is because of PKP PLK' lacks money to return VAT owings to the contractors, but there is also the problem of lack of skilled designers and investment planning professionals — says Przemysław Wróbel, vicepresident of PRK7,one of PKP's contractors.
In the past there were no rail infrastructure investments and therefore no professionals were trained. The ones that remained are incapable of working on all the current projects. PKP PLK is forced to perform more and more projects in as 'develop and build' project. That way it is the contractor who has to find a skilled rail infrastryucture engineer.

— There is a problem, that is a fact. To solve it we have to train more and more people, otherwise we'll have to seek skilled men abroad — says Andrzej Wach, CEO of the PKP Group.

— We plan to employ twice as much people responsible for investment projects at PKP PLK - says Jerzy Polaczek, minister responsible for transport.

What is more there is also the VAT problem. The EU does not allow PKP PLK to return the 22% VAT stake to the contractors from the EU money. And the company does not have its own resources to cover this cost.

— We'll try to make these procedures easier — says Mr Polaczek.

Andrzej Wach says that PKP should balance the current accounts to get rid of the VAT problem. But to achieve that the regions should provide more money to PKP Regional Railways, which hast the biggest debt to PKP PLK. This year PLN 550m (EUR 137m) is needed.

This week PKP PLK signed a deal for modernising the first section of Warsaw - Lodz line. The contractors are Profil and Koltech Inwestor. The contract is worth PLN 12.7m (EUR 3.2m). The consortium received a retainer with VAT included. Meanwhile PKP PLK will apply for commercial credit.
Source: railway-market.pl

QXL does not see Polish settlement affected by regulatory internet auction probe

QXL Ricardo PLC, the online auctioneer, said it does not expect the settlement proposed for its Polish unit to be affected by the inquiry into the internet auctions market by Poland's competition authority.

QXL announced on June 29 that it had regained control of its former subsidiary QXL Poland after reaching a conditional agreement with Wouwer Investeringen and Tomasz Dudziak.

The internet auction probe started on June 21, and is therefore not related to the settlement, QXL said.

The group lost control of QXL Poland following a disputed issue of new shares representing 92 pct of QXL Poland in December 2002. QXL claimed the share issue was invalid since it was undertaken without the consent of the company.

Under the settlement, QXL will issue shares representing around 24 pct of the company over a period of three years in exchange for the entire share capital and undisputed control of QXL Poland.

QXL's shareholders are voting on the proposed settlement

at the company's EGM on July 24.

The Polish internet auction probe is expected to include QXL Poland, QXL said. It said it is seeking clarification about the implications of the inquiry.
Source:

Stada now searching for possible acquisitions in Poland

Stada Arzneimittel AG is currently searching for possible acquisitions in Poland, chief executive Hartmut Retzlaff said in an interview with Financial Times Deutschland.

Retzlaff said Stada will use Serbian generics manufacturer Hemofarm as a platform to expand in eastern Europe.

Last Friday, Stada announced it is making a public offer for Hemofarm for around 485 mln eur.
Source: forbes.com

Railway Industry in Poland: Two Rolling Stock Suppliers to Cooperate?

Two major Polish passenger rolling stock manufacturers, PESA of Bydgoszcz and FPS H. Cegielski want to cooperate on tram construction. The two companies have been competing for a long time. FPS already started to think ahead of possible new orders and decided to increase employment.

PESA won the contract to supply trams for Warsaw. H.Cegielski, who lost the battle for this order, appealed and it was decided that the each of the two competitors will supply a different kind units. Now the two companies want to create a consortium and conduct the production together.

The negotiations are in progress and their outcome is still uncertain as there is another rolling stock supplier who wants to cooperate with H.Cegielski - ZNTK Poznan.

ZNTK won an order from Wielkopolskie voivodship to supply DMUs and now, because of financial difficulties, has troubles with fullfilling the supplies. The company hopes that FPS might be of some help.

In December 2005 H.Cegielski signed a contract worth EUR 17m with PKP Regional Railways for modernizing 72 passenger coaches. PESA is currently manufacturing trams for Warsaw, DMUs for Ferrovie del Sud Est, DMUs for Wielkopolska region.
Source:railway-market.pl

Hel to become Poland's Miami

The army, which has 95% possession of 2,000ha area of the Hel peninsula, is going to give away a large part of the area and just reserve itself a small base by the end of the year.

This opens almost numerous development possibilities and the local authorities have already been overwhelmed by enquires from investors about dates of tenders. Hel's assets are outstanding natural beauty and the area is littered with numerous monuments, both relating to the military and fishing history of the area. A square metre of land costs around zł.300 and close to the harbor the price rise to zł.1,000. In 2015 a scientific and education center with an aquarium for whales will be built near the harbor. At present the peninsula can accommodate 25,000 tourists.
Source:

Poland's Netia cuts sales forecast for 2006

Poland's Netia on Friday cut the forecast for sales from its telecoms operations this year and confirmed the company was heading for a loss.

"The board cuts its forecast for revenues from operational activity to 850 million to 870 million zlotys ($273.2 million)," the telecoms group said in a statement.

"That constitutes a fall of 4.1 to 6.3 percent from 2005. Netia will probably note a consolidated loss this year," it added.

Second-quarter sales will be down by 9 to 10 percent, it said. It had earlier said sales would rise by several percent this year.

The operator said doubts over sales of new products and lower overall tariffs for calls due to regulatory changes were weighing on its results.

Netia posted a surprise first-quarter net loss in May and said its planned investments in the local market would probably keep it in the red for the full year.

Poland's biggest phone operator after dominant phone group TPSA, Netia is investing in a joint venture with Icelandic private equity fund Novator to create the country's fourth mobile operator, P4.

It said it should get a substantial boost from sales of the P4 network next year.

Source:

Poland to receive 60 bn euro in EU subsidies

Poland is to receive almost €60bn of regional support over the next seven years, overtaking Spain as by far the biggest recipient of EU funding, the Financial Times reports. Danuta Hubner, EU regional policy commissioner tells the newspaper she wants Europe's poorest regions to focus on raising competitiveness, with less emphasis on prestigious political projects such as new roads and railways and more on laboratories and high-tech clusters.
Source:Radio Polonia

Polish oil, gas firms start joint venture

Two Polish oil and gas firms agreed Friday to pursue a joint prospecting mission for fuel and gas exploration.

Fuel firm PKN Olren and PGNiG gas company signed a letter of intent for cooperation in fuel and gas prospecting and extraction, Polish PAP news agency reported.

The two companies are going to prospect for gas and oil in Kazakhstan, Azerbaijan , the Middle East and North Africa. Cooperation in gas prospecting in Poland is also planned. PKN and PGNIiG are considering participating in the creation and utilization of an liquified natural gas terminal.

Source: news.monstersandcritics.com

EU Calls on Poland and Finland to Change Legislation

The European Commission is calling on Poland and Finland to modify their respective legislation with regard to heavy goods vehicles.

In Poland, second hand vehicles imported from other Member States are taxed at a higher rate than those from within the country. The Commission says this infringes on Article 90 of the EEC treaty.

In the case of Finland, an equally discriminatory 'permission tax' is applied to imported vehicles and leased vehicles from other Member States.

Source:tnn.co.uk

Railway industry in Poland: Kamax delivers buffers for Qinghai-Tibet Line Trains

Qingdao KAMAX Buffer Equipment Co., Ltd.- joint venture company founded by CNR Sifang Rolling Stock Research Institute and Polish KAMAX Mechanical Equipment Plant Joint Stock Company delivered buffers for Qinghai-Tibet Line Trains.

The company's objective is to design, produce and sell the elastomeric buffers for railway passenger cars and freight wagons. The introduction of elastomeric buffers into Chinese market will improve the technology level of Chinese railway locomotive, rolling stock and equipment and the elastomeric technology is especially important to the transportation of dangerous goods. The Joint Venture is equipped with advanced production line of buffer and masters the advanced producing methods of KX-CHP passenger car buffer, KX-CHL locomotive buffer and KX-CHT wagon buffer. The annual output is about 36,000 sets of buffers of different types.

KAMAX Mechanical Equipment Plant Joint Stock Company. is a leading Polish manufacturer of draw gear equipment for railway stock (i.e. shock absorbers, buffers and shock absorbing appliances) based on elastomer technology.

The Qinghai-Tibet railway was opened two week ago. It's 1,956 kilometers long, with 960 km of the track located 4,000 meters above sea level and the highest point at 5,072 meters.
Source:railway-market.pl

Top Polish telecom operator to appeal regulator moves that undermine revenue

Poland's dominant telecommunications operator, Telekomunikacja Polska SA (TPS.WA), will appeal recent decisions of the telecommunications market regulator that would cut the company's revenue base, an executive said Thursday.

Within the past two weeks, the regulator issued two crucial decisions forcing TPSA to cut its interconnection fees and offer wholesale line rental services at discount prices.

Analysts estimate the regulator's decrees could cut TPSA's 2007 revenue by an estimated 300 million zloty ($1=PLN3.1865).

TPSA director for regulatory issues Grażyna Piotrowska-Oliwa told reporters that TPSA was not "ready to sponsor the regulator's moves favorable only to its competitors."

She declined to specify how the tougher regulatory setup would impact TPSA's financial performance but said analysts' estimates were relevant.

In its Wednesday research note, BZ WBK brokerage said that in the worst-case scenario over the long-term, the decisions of the regulator could cut TPSA revenues even by 3% to 4%. BZ WBK said that to cope with falling revenues the company would have to cut its workforce by some 5,000 from the current 33,600.

On July 5, the regulator published a decree on reference interconnect offer, or RIO, obliging TPSA to cut fees for access to its network for other competitors by 35%.

Earlier Thursday, the regulator issued a decision on rules and fees for wholesale line rental, or WLR, of the TPSA infrastructure to its fierce competitor Tele2.

TPSA will now have to offer WLR services to Tele2 with a 47% discount.

The measure allows the alternative operator to rent fixed lines at wholesale prices and then collect subscription fees from clients instead of passing it on to TPSA.

Piotrowska-Oliwa said that to meet technical requirements stemming from the decrees TPSA would have to invest some PLN160 million this year but the planned level of capital expenditure could not be changed.

TPSA capex for 2006 is planned at PLN3.3 billion, while revenues are forecast at PLN18 billion, down from PLN18.3 billion in 2005.
Source:marketwatch.com