The general assumptions of the program concern cost reduction and improvement of competitiveness. Furthermore, they are subordinated to adjusting the company’s resources and existing processes to actual needs, raising service quality standards and flexibility in responding to customer needs, improving organization by delegating part of the competencies and responsibilities to company plants, and increasing the efficiency of transport organization, including distributed transport.
– The implementation of the 2010 recovery program, combined with the effects of actions already taken in 2009, is intended to allow the company to achieve a minimum 1% profitability of its core business this year, as well as to generate nearly PLN 40 million in net profit. In the long term, the goal of the program is to consistently improve the competitive position and efficiently prepare for the privatization process – says Wojciech Balczun, President of PKP CARGO S.A.
Among the most important areas covered by this program are the asset, commercial, and investment areas. The most extensive actions are planned in the first of these. They include, among others, the continuation of the process of optimizing technical facilities – after ceasing operations at 37 rolling stock maintenance points in 2009, it is planned to transfer four more such points this year, along with approximately 300 employees, to existing companies within the PKP CARGO group. This is expected to contribute to reducing maintenance costs by approximately PLN 8 million per year. Further savings are to be brought by implementing changes in regulations regarding rolling stock maintenance, consisting of extending the periods between repairs for selected series of new wagons from 4 to 6 years (approx. PLN 12.7 million in 2010), as well as implementing a new inspection cycle for locomotives (approx. PLN 9.4 million per year). A significant cost reduction is also expected to be brought by better matching the actual train weight to that ordered in the timetable. The company estimates savings from this title at approximately PLN 16 million per year. In the real estate area, the Recovery Program assumes a reduction in rents paid to PKP S.A. from over PLN 125 million in 2009 to PLN 81 million this year, as well as continuing the verification of owned assets and the liquidation of unnecessary ones. The process of liquidating warehouses will continue, as well as a program aimed at reducing the company’s inventory levels in 2010 by at least 10 percent, to approximately PLN 90 million. In the commercial area, the program provides for the continuation of work related to the liquidation of unprofitable tariff points, loading points, and sidings. Out of 406 tariff and non-tariff points selected in 2009 for profitability analysis, 94 were qualified for removal from the PKP CARGO Tariff Distance List due to negative profitability, and 55 others for a change in the scope of dispatch activities.