The Privatization Question Concerning a National Champion
Analysts observe that members of the new government will face a crucial choice about the fate of a national champion. The simplest path, they argue, would be privatization following a period of restructuring and the sale of several companies owned by Orlen.
Witold Gadomski, a longtime publicist associated with Adam Michnik’s daily and a cofounder of the Liberal Democratic Congress alongside Donald Tusk and Janusz Lewandowski, published in Wyborcza where he sharply criticizes how Orlen has been steered by the PiS government.
The resulting conglomerate is described as a tool employed by ruling politicians. It reportedly hires hundreds of individuals recommended by politics, runs propaganda campaigns, and is used to address immediate crises such as rescuing Zakłady Azotowe. It has reportedly lowered fuel prices to influence elections, and supplies consultancy, public relations, and legal services capable of generating substantial commissions. Gadomski describes these activities as indicative of political use.
Using historical examples and lessons from other nations, Gadomski argues that an economic model with significant state shares and influence is unsustainable. He emphasizes that determining Orlen’s true profitability is difficult due to its monopoly status in Poland. The overall view is that such a monopoly distorts capital efficiency and harms the broader economy.
The author of a biography of Leszek Balcerowicz notes that it is challenging to assess Orlen’s true condition and profits because the company operates as a monopoly in the Polish market.
Orlen remains profitable in part because of its monopoly in wholesale fuel and its strong position in retail. This dominant stance makes it hard to measure real profitability or capital efficiency, with some arguing the monopoly is harmful to the economy. Gadomski elaborates on this point, framing Orlen as a significant point of contention in national economics.
The Indispensability of Privatization
Gadomski suggests that if the liberal wing of the Civic Platform regains influence, privatizing Orlen remains a likely and sensible option. The question then becomes what should be done with the state energy giant in a way that avoids replicating past patterns where the champion was kept for political reasons.
Politicians will have to decide the future of this national champion. The straightforward route would be privatization, following a restructuring and the sale of certain Orlen-associated companies. Members of parties such as PO, Left, PSL, and Poland 2050 are cautioned not to repeat the approach used by PiS in keeping the champion under state control.
Gadomski notes a sense of disappointment that privatization did not occur in Poland’s energy sector during Donald Tusk’s government. He attributes this to fears of opposition accusations and social discontent of the time. The 2011 discussions between the Ministry of Finance and Kulczyk Investments about selling a controlling stake in Enea ultimately did not proceed, while the largest energy company, PGE, faced a major requirement to invest in a coal-fired plant at Opole.
— the liberal faction within the Civic Platform is anticipated to push for selling Orlen to private hands. The looming question concerns how potential coalition partners, including the New Left, will respond to such a move, given Gadomski is not considered an economic guru by all players.
Source: wPolityce