Polish Steelworks privatization to be canceled?

The privatization of Polish Steelworks (PHS), the largest steel producer in Poland, was discussed recently by the Polish Parliament, Dziennik Polski reported.
The sale of Polish Steelworks PHS to the Indian-based LNM Group was completed in March 2004, after the new owners reached an agreement with trade unions over a ?social package? to protect the interests of the company?s 16,000 employees.
Representatives of the coalition parties demanded appointing a special commission to investigate if all sale procedures were carried out properly and if the privatization transaction violated any laws. Some politicians believe that the Democratic Left Alliance (SLD) (?Sojusz Lewicy Demokratycznej?) sold these companies too easily and the country lost as much as two bln zloty in the transaction. Had the government waited another 6 months they could have received much more money.
According to State Treasury representatives, the total value of the PHS privatization transaction amounted to almost one bln euro. It was also the most complicated and longest transaction in the history of the State Treasury.
PHS was the major Polish steel producer with an annual output of 6 mln tons, accounting for approximately 70 percent of Polish steel production. The company consisted of four steel plants: ?Sendzimir? in Krakow in the Nowa Huta district, ?Katowice? in Dabrowa Gornicza, ?Florian? in Swietochlowice and ?Cedler? in Sosnowiec (cities located in the south of Poland, in the Silesian Voivodeship, a province).
Trade unions representatives have a different perspective on the sale.
?The investor (LNM) bought the companies at a price which was negotiated. It was not their fault that the Polish government was the weaker link. Why do we want to punish [LNM] because of the government?s mistake?? asked Jerzy Goinski, the leader of the trade union at Katowice factory.
The condition of the Polish iron and steel industry was very bad. LNM guaranteed present employment status until July 31, 2009. Other provisions included employment, social and healthcare guarantees as well as occupational health, safe working conditions and cooperation with trade unions. The privatization saved the Polish ironworks from collapse and tens of thousands of workers from losing their jobs. For most employees it makes little difference who owns the company. The most important constant is work and wage stability. When the steelworks were state-owned, work and wage stability were often at a bad or even disastrously low level.

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