Poland agrees shipyard rescue plan, EU to decide

Poland's government said on Thursday it had reached a preliminary agreement with investors on plans to overhaul its historic Baltic shipyards and avert their closure.

The European Commission has given Poland a Sept. 12 deadline to present its restructuring plan for the yards, cradle of the anti-communist Solidarity trade union in the 1980s, or else repay illegal state aid that would force them into bankruptcy.

The shipyards 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.

State-owned Gdynia and Szczecin and the privatised Gdansk yards have received state aid totalling more than 2.3 billion euros ($3.34 billion) over the years, in violation of EU competition rules.

Treasury Minister Aleksander Grad said the tentative accord envisaged additional state aid for the yards, which is allowed under EU rules provided it leads to the long-term financial viability of the companies concerned.
'We reached agreement with the investors in recent days... that clearly stipulates in what respect and to what degree the treasury can participate in financing old liabilities with new state aid,' Grad told parliament.

The investors involved are Ukraine's Industrial Union of Donbass, which owns the Gdansk yard and is interested in buying Gdynia, and private Polish firm Mostostal Chojnice, which wants to buy Szczecin.

'We're ready to grant additional public help. We're ready to support these shipyards in the interim period, but we have to bear in mind that we're part of the European Union...and that the European Commission has the deciding vote (on their fate),' Grad said.

The Treasury said the additional aid amounted to 835 million zlotys ($359.1 million) for Gdansk and Gdynia and 400 million zlotys for Szczecin. Investors have pledged about 1 billion zlotys for Gdansk and Gdynia and 242 million zlotys

for Szczecin.

Successive governments have failed to deal with the problem since Poland joined the EU in 2004. The yards have not made profit on a single ship built since at least 2004 and would not have survived without subsidies, but analysts say that,

properly managed, they could still flourish.

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Source:hemscott.com