Railway Age

Burkhardt group ready to seek big stake in Polish Railways – Rail Polska

Burkhardt group ready to seek big stake in Polish Railways – Rail Polska – Brief Article

Privatization of Poland’s 14,400-mile rail system is expected to begin in about a year, and Rail Polska, a subsidiary of Chicago-based Rail World, Inc., will be bidding on much of it. Rail World was formed last year by Ed Burkhardt after he was forced Out as head of Wisconsin Central Transportation Corp., where he led that company into profitable equity and management positions in the privatized railways of New Zealand and Britain.

The Polish parliament is expected to pass privatization legislation soon, splitting Polish State Railways (PKP) into passenger, freight, and infrastructure divisions, according to International Railway Journal, a sister publication of Railway Age. First to be privatized will be the freight unit, in which both the German and the French national railway systems as well as Rail Polska have expressed interest.

Richard Cottrell, a Rail Polska officer based in Warsaw, says that when the company was known as Wisconsin Polska, a subsidiary of Wisconsin Central, it planned “to concentrate only on bidding for the freight business of PKP.” But that has changed, he said: “We are not just cherry-pickers. We are prepared to take a stake in the PKP infrastructure company, probably with partners, and we are also prepared to get involved in providing passenger services, again with partners.”

PKP puts its official loss last year at slightly more than $400 million; Cottrell believes the actual loss was more than $700 million.

Though it needs enormous investments in capital improvements–around $3.4 billion just to bring it up to UIC (International Railway Union) standards, according to Cottrell–the railway system’s potential is believed to be great once it is moved into the private sector. Now, for example, it employs around 196,000 people, more than all U.S. Class I railroads.

“Private investors are in a better position than us because they can come in and introduce new and more efficient methods,” PKP Chairman and Director General Krzystof Celinski told IRJ. “We have to deal with the burden of our existing labor relations.”

PKP has accumulated debt of $3.76 billion, but this will not be transferred to new owners.

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