PKP Cargo (former Project Tamarind)

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 45507

Status Complete

Location

Poland

Business Sector

Transport

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 45507

Status Complete

Location

Poland

Business Sector

Transport

Notice Type

Private

Environmental Category

Approval Date

01 Oct 2013

Disclosure date

09 Oct 2013

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The project involves an equity investment by the Bank in the Initial Public Offering (“IPO”) of PKP Cargo S.A. (the “company”) and its listing on the Warsaw Stock Exchange (“WSE”) through the subscription to existing shares offered by the current sole shareholder (PKP S.A.) in the company’s partial privatisation process (PKP S.A. is owned by the Polish State). Up to 50 per cent minus one share in the company will be privatised in a public offering (with all company’s shares to be listed on the WSE) while 50 per cent plus one share will be retained by PKP S.A.

The IPO of PKP Cargo is the introduction of private ownership in the company, which will be achieved by this partial privatisation. The Bank’s participation is expected to improve the company’s corporate governance, support the restructuring and improvement of performance standards. The IPO is a landmark transaction in the rail sector in Central and Eastern Europe.

Transition Impact

The main transition impact of the project will derive from:

(i) More widespread private ownership
The project will bring more widespread private ownership in Poland in the sector, which has to date been the exclusive remit of the Polish State. The partial privatisation of PKP Cargo will be the first company of the PKP Group to undergo an IPO, and may pave the way for other subsidiaries of the Group to follow suit.

(ii) Setting of standards for corporate governance and business conduct
The project will contribute to a substantial improvement of ther corporate governance standards at PKP Cargo. The company is committed to complying with the full Warsaw Stock Exchange corporate governance code. In addition, a change in the Articles of Association and the by-laws will reinforce the autonomy of the process by which any new management board members would be recruited and ensure that this is done through a competitive and transparent selection process in accordance with the nomination procedure to be introduced to the company’s charter prior to the IPO (the registration of such changes to take place after the IPO).

(iii) Demonstration of new and replicable behaviour and activities
The project will be the first example of a partial privatisation by means of an IPO to be carried out in the rail sector in the region. The success may encourage other government to privatise their cargo and/or freight businesses.

The Client

PKP Cargo is the national provider of rail freight services in Poland and the second largest freight operator in Europe. The company’s only current shareholder is PKP S.A., a railway holding company entirely owned by the Polish State Treasury which holds 100 per cent of PKP Cargo’s shares.

EBRD Finance

Equity investment of up to 7.5% of the total number of shares in the share capital of the company, the exact number to be determined on subscription and subject to acceptable level of the share price and fulfilment of certain conditions precedent.

Project Cost

The total project value amount will be determined at the time of the stock market listing.

Environmental Impact

Categorised B.

An independent environmental audit assessment of the company was completed as part of the pre-privatisation study on request of PKP S.A. in 2010. As part of the current project, the Bank undertook additional Environmental and Social Due Diligence (“ESDD”), this included a corporate review and a series of site visits by the Bank.

The ESDD identified that some additional resources and procedures are needed to achieve compliance with the EBRD’s Performance Requirements.

An Environmental and Social Action Plan (“ESAP”) has been developed to address environmental and social issues identified during the ESDD. A Corporate Stakeholder Engagement Plan will be developed under the ESAP and publicly disclosed. Thecompany will provide to EBRD annual reports on the implementation of the ESAP and environmental and social performance. The Bank will monitor the company’s compliance with the agreed environmental and social commitments through reviewing these reports and periodic monitoring visits.

Technical Cooperation

None.

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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