WBJ #12 2011

A host of firms have released their 2010 results, including the Warsaw Stock Exchange

Software producer Asseco has aggressive international ambitions

There are fewer than 100 days until Poland’s EU presidency. Is it ready?

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WWW.WBJ.PL

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VOLUME 17, NUMBER 12 • MARCH 28 – APRIL 3, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

REAL ESTATE

Since 1994 . Poland’s only business weekly in English

Rising strength

COURTESY OF ECHO INVESTMENT

Lokale Immobilia

Poland still depends on NATO for its security, but it has become a force to be reckoned with in its own right 12-13

• Rezydencje LeÊne • Property restitution • Ghelamco’s Synergy 15-19

Judging the system Justice Minister Krzysztof Kwiatkowski talks the pros and cons of Poland’s justice system 6-7

A guide to Polish business and industry

Przewodnik po polskim biznesie i gospodarce

Commercial banks 20-21

Called to account

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Industry News . . . . . . . . . . . . . . . . .5 Business Environment . . . . . . . . . .6 Listed Firms . . . . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion . . . . . . . . . . . . . . . . . . . . . .11 Cover Story . . . . . . . . . . . . . . . .12-13 Markets . . . . . . . . . . . . . . . . . . . . . .14 Lokale Immobilia . . . . . . . . . . .15-19 The List . . . . . . . . . . . . . . . . . . .20-21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Errors in Poland’s national accounting could spell major trouble for the economy

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SHUTTERSTOCK

PKO for sale?

The Treasury is to decide on the future of its stake in leading bank PKO BP this week 5

A GUIDE TO POLISH EXPORT will h it sh elves in April 2 0 1 1 !

For advertising and promotion opportunities contact: Agnieszka Brejwo: abrejwo@wbj.pl; (+48) 639-85-68, ext. 226

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NEWS

www.wbj.pl

Obama coming to Poland

Polish parliament passes pension reform The government’s pension reform plan has been green-lit by members of parliament.

Two hundred and thirtyseven MPs voted for the bill, 154 were against it and 40 abstained. The bill will now go to the Senate for approval.

The reform will reduce monthly salary contributions to private pension funds from 7.3 percent to 2.3 percent. By 2017, the amount going to the OFEs is supposed to increase to 3.5 percent. The government wants the reform to come into effect by May 1.

IN THE SPOTLIGHT

€275 million

Jaros∏aw Kaczyƒski

was the trade surplus reported by the central bank in January 2011

€10-15 billion is how much Polish import figures for 2010 might be off by, due to an accounting error

z∏.16.5 billion is Rzeczpospolita's projection for total 2011 dividend payments by WSE-listed firms

58% of Poland's university students are female

Quote of the Week

Grzegorz Schetyna, a top member of the ruling Civic Platform (PO) party as well as the speaker of the Sejm, has stated his intention to vote to strip Jaros∏aw Kaczyƒski, leader of Law and Justice (PiS), Poland’s largest opposition party, of parliamentary immunity.

A vote on the matter will be held this week, Mr Schetyna told Radio Zet. An absolute majority is needed to pass such a resolution.

The timing is a little curious. If the motion were to pass, Mr Kaczyƒski’s immunity would be withdrawn just days before the first anniversary of the Smolensk catastrophe in which his twin and sister-inlaw, President Lech Kaczyƒski and First Lady Maria Kaczyƒs-

ka, perished along with 94 others. With the spotlight naturally on the PiS leader on this occasion, he would be assured of abundant media coverage and given a chance to make a case against his opponents.

The motion to waive his immunity was requested by Roman Giertych, a former deputy prime minister (20062007) in the PiS-led government, which Mr Kaczyƒski headed. In a 2010 interview with the daily Rzeczpospolita, Mr Giertych said that, as PM, Mr Kaczyƒski had “gathered dirt” on political opponents in order to discredit them during election campaigns.

In response, Mr Kaczyƒski sued Mr Giertych for spreading “lies.”

Roman Giertych, a lawyer

by profession, then filed civil and criminal counter-suits, accusing Mr Kaczyƒski of slander. However, due to Mr Kaczyƒski’s parliamentary immunity, the proceedings have been suspended.

Mr Giertych claims to have witnesses willing to confirm his accusations against the former PM, such as former Interior Minister Janusz Kaczmarek and former Deputy Prime Minister Andrzej Lepper. If Mr Kaczyƒski were found guilty, he could face up to two years in prison.

As WBJ went to press, Jaros∏aw Kaczyƒski had yet to respond to Mr Schetyna’s statements. A co-founder of Law and Justice, he has led the party since 2003.

“The gas terminal is not a monument to anyone. It’s just a terminal to supply people with gas” Prime Minister Donald Tusk responds to Law and Justice’s calls for the ÂwinoujÊcie LNG terminal to be named after late President Lech Kaczyƒski

Figures in focus In times of freight crisis Volume of road and rail freight in selected EU countries, annual change 2008-2009

Road

Rail

20 10 0 -10 -20 -30 -40 -50

EU27

France Hungary

Latvia

Poland Romania United Kingdom

Remi Adekoya Source: Central Statistical Office

On WBJ.pl

Kaczyƒski goes shopping Jaros∏aw Kaczyƒski, head of Law and Justice (PiS), Poland’s main opposition party, put on a show at a local grocery store in Warsaw last Tuesday. His goal was to illustrate how prices have risen under the current government. Mr Kaczyƒski bought sugar, chicken, potatoes, vegetables and apples and presented the receipt at a press conference. The total came to z∏.55.60. The PiS leader stated that in 2007, when his party led the nation, he would have paid around z∏.24.

Former Finance Minister Leszek Balcerowicz later disagreed with him, noting that shops set prices, not governments. ●

Numbers in the News

COURTESY OF EUROPEAN COMMISSION

US President Barack Obama is scheduled to visit Poland on May 27.

During his first official visit in the country, he will meet with President Bronis∏aw Komorowski and Prime Minister Donald Tusk, among others. According to the White House, President Komorowski extended an invitation to his American counterpart during his visit to Washington in December of last year.

The US Embassy has confirmed that Mr Obama will visit Poland as part of a May 23-28 trip to Europe, during which he will also visit Ireland, the United Kingdom and France.

MARCH 28 – APRIL 3, 2011

Company index Abantia ......................................17 Ghelamco ..................................15 Polimex-Mostostal ....................14

Watching Wajda Oscar-winning Polish filmmaker Andrzej Wajda was recently awarded the Order of the White Eagle, Poland’s oldest and highest state distinction, by President Bronis∏aw Komorowski. Log on to WBJ.pl for a retrospective of Mr Wajda’s work.

Action..........................................18 Globe Trade Centre..............14, 15 Polkomtel ..............................7, 17 AIG Bank Polska ........................20 Hachette ....................................17 PolRest ......................................14 AIG Lincoln ................................19 Helio ..........................................14 Alior Bank ..................................21 HSBC Bank Polska ....................21 AMC-Andrzej M. Cho∏dzyƒski....17 Impel ..........................................14 Asseco Poland........................5, 14 ING Bank Âlàski ........................20 Azora Europe..............................17 Invest-Bank ................................21

Polska Grupa Energetyczna ......14 Pronox Technology ....................14 Rabobank Polska ......................21 RADWAR ....................................13

Bank BG˚ ..................................20 Ipopema Securities......................5 Raiffeisen Bank Polska ............20 Bank BPH ..................................20 ISource ......................................17 Rainbow Tours ..........................14 Bank DnB NORD Polska ..........21 Jaspers-Eyers & Partners ........15 Rubicon Partners ......................14 Bank Gospodarstwa Krajowego ..5 Jones Lang LaSalle ..................15 Santander Consumer Bank ......21 Bank Handlowy w Warszawie....20 KGHM ........................................14 SAP ..............................................5 Bank Millennium........................20 Konica Minolta ..........................18

DATELINE

Bank Ochrony Ârodowiska ........21 Kredyt Bank ..............................20 Bank Pekao ..........................14, 20 LHI ..............................................19 Bank Pocztowy ..........................21 Lukas Bank ................................21 Bank Polskiej Spó∏dzielczoÊci ..21 MBDA ........................................13

March/April

SC Johnson ................................16 Segro ..........................................18 Société Générale........................21 Sonitus Medical ........................23

Bank Zachodni WBK..................20 MediaCom ..................................17 Sony Ericsson ............................23 BRE Bank ..................................20 Mermaid Properties ..................18 StoMM Architektura ..................15 Bumar ..................................12, 13 Military Property Agency ..........16 Tauron ....................................5, 14

MARCH 29-30 CEE BANKING SUMMIT Event:

The 4th edition of the CEE Banking Summit.

Location: Hotel Polonia Palace, Warsaw. www.tcct.pl

APRIL 4 RPP MEETING Event:

The National Bank of Poland's Monetary Policy Council (RPP) rate-setting body begins its two-day meeting.

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RPP MEETING

Event:

The National Bank of Poland's Monetary Policy Council (RPP) rate-setting body ends its two-day meeting and announces its decision on interest rates.

Business Solution ......................18 Miller Canfield, W. Babicki, A.

Telecommunications Research CB Richard Ellis ..................18, 19 Chelchowski & Partners ....13, 19 Institute in Warsaw ....................13 CEZ ............................................14 Montagu Private Equity ..............9 Telepizza ....................................17 Coca-Cola ..................................16 Mostostal Warszawa..................18 Colliers International ................18 MOT ............................................16 Cushman & Wakefield ..............16 NFI Midas ..................................14 Danske Bank..........................3, 11 NFI Octava..................................14

Event:

TOURISM TRADE SHOW 3rd edition of the International Tourism Trade Show – MTT Wroc∏aw. Location: Orbita Hall, 34 Wejherowska Street, Wroclaw. www.mttwroclaw.pl

Trust Properties ........................18 TVN ............................................18

Deutsche Bahn ............................5 Nordea Bank ..............................21 UBS ............................................17 DI BRE ..........................................7 Novaservis....................................5 Vattenfall ......................................7 Dom Towarowy Bracia

8-10

TP............................................9, 14

OHL ............................................18 VF Polska Distribution ..............17

Jab∏kowscy ................................19 One-2-One..................................14 Volkswagen Bank Polska ..........21 DZ BANK Polska........................21 Onet.pl ........................................18 Wars ............................................9 Emitel ..........................................9 OnStar ........................................23 Warsaw Stock Exchange ............7 Exatel............................................7 PBG ......................................14, 18 Ferro ............................................5 PGE ..............................................7 Formula Systems ........................5 PGNiG ..........................................7 Fortis Bank Polska ....................20 PKO Bank Polski....................5, 20

W∏odarzewska............................16 X-Trade Brokers ..........................3 Zetkama ....................................14

Gazprom ......................................7 PKP Intercity ................................9 ZEW Nidzica ................................7 General Motors ..........................23 Polbank EFG ..............................21 ZUMI ..........................................18

NEWS

MARCH 28 – APRIL 3, 2011

www.wbj.pl

3

Macroeconomics

Poland headed for an accounting disaster?

There's cause for concern, but no need to panic yet, experts say

Bad news

Reports of major discrepancies in Poland’s official economic data have raised questions about the true picture of its economic health.

The issue came to light during a Reuters interview with Miros∏aw Gronicki, advisor to the president of the National Bank of Poland.

“We have a problem. In the balance of payments, in the errors and omissions category, a huge number appeared, reaching four percent of GDP. If this is caused by underestimated imports, the trade and services deficit is bigger and therefore the current account deficit is also bigger,” Mr Gronicki said.

“Such a situation would cause financial investors to change how they view Polish instruments, and secondly, would impact GDP estimates.

Underestimated imports means GDP is overestimated, with all the consequences

An analysis issued by Danske Bank predicts that imports could have been underestimated by as much as €10-15 billion in 2010 alone. This would mean overestimated GDP growth and a much worse macroeconomic picture for Poland: the debt-to-GDP ratio in such a case would probably have breached the threshold of 55 percent, at which point austerity measures must be implemented.

“This is bad news as it basically calls into question the quality of the entire Polish national accounts since EU accession in 2004 – this is when the problem with increased [errors and omissions] apparently started,” stated the report.

For example, Poland’s Central Statistical Office (GUS) shows the country having a €2 billion surplus with Germany.

On the other hand, German data shows Germany having the surplus in trade with Poland.

TUCHLI¡SKI/REPORTER

related,” he added.

Former Finance Minister Gronicki was at a loss to explain the statistical disparity The difference is around €11.7 billion for 2010.

Possible consequences If it is confirmed that the trade deficit figures have indeed suffered from poor accounting and the figures are revised significantly, one of the main concerns will be public debt. The Finance Ministry has previously stated that preliminary data

indicates a debt-to-GDP level of 53.5 percent in 2010.

For example, if GDP is revised downward it would push the debt ratio beyond 55 percent of GDP, and the government would be legally bound to tighten fiscal policy. The next budget would have to be drafted without a deficit.

The government’s pledge to reduce the budget deficit to

below three percent of GDP in 2012, as part of the European Commission’s requirements for joining the euro zone, would also be out of the question.

“This is definitely not a healthy situation, because, as economists, we shouldn’t have to be digging deep into the data methodology and worrying about its quality, as is the case today,” said Przemys∏aw

Kwiecieƒ, chief economist at XTrade Brokers.

It’s difficult to make a proper assessment of the situation just yet, he noted, but in his opinion the discrepancies are unlikely to be attributable to imports to the extent that they will significantly affect GDP figures.

In response to the situation, GUS said that the reason for the difference in the Polish and German data is a result of a difference in what the Germans qualify as exports to Poland and what Poland qualifies as imports from Germany.

They say many goods brought in from Germany are in fact from some other countries of origin, such as China.

“Comparing exports from Germany to imports to Poland (showing on the import side all goods sent from Germany to Poland, irrespective of their origin) you can see a big similarity in the data,” Ewa AdachStankiewicz from GUS told Reuters.

Remi Adekoya

Nuclear power

Poland and the EU

Government to hold referendum on Poland’s nuclear future?

Major decisions at summit

Chernobyl still lingers in the minds of many Poles In terms of Polish public opinion, however, the picture is mixed. According to a survey by SMG/KRC conducted after the first explosion at the Fukushima Daiichi plant, 47 percent of Poles approved of Poland’s plan to develop nuclear power, while 46 percent opposed it.

An online survey conducted last week by Money.pl, in which over 13,000 people participated, found that 65 percent of respondents were in favor of building a nuclear plant in Poland, while 30 percent opposed the idea.

Mr Tusk alluded to the possibility of employing a referendum to decide the matter while on a visit to northern Poland. He was there to lay the first stone of an LNG terminal in ÂwinoujÊcie which is scheduled for completion in 2014.

Both the LNG terminal and the project to build two nuclear power plants, the first of which should come online in 2020, are part of Poland’s strategy to end its dependence on Russian gas and on coal, from which it derives over 90 percent of its energy.

Alice Trudelle

EU leaders gathered in Brussels last week to discuss a number of hot-button issues: the euro zone’s economic woes, the situation in Libya and the future of nuclear power following the crisis in Japan.

Amidst worries that Portugal would soon become the third EU country to need a bailout, leaders reached an agreement on a €700 billion permanent crisis-relief mechanism. From 2013 the European Stability Mechanism will replace the temporary European Financial Stability Facility, which is already being used to lend money to Greece and Ireland. An EU-wide stress test to be carried out between March and June has also been agreed upon.

The 17 euro zone countries plus six others, including Poland, also agreed to adopt a global package of measures to preserve financial stability and boost growth called the Euro Plus Pact. Polish Prime Minister Donald Tusk had previously expressed his approval of such an agreement, noting that including non-euro countries would prevent the creation of a “two-speed” union.

EU leaders also decided to adopt further sanctions on Libya, “including measures to ensure that oil and gas revenues do not reach the Gaddafi

regime.” France pushed for sending humanitarian aid and for the recognition of the rebelled National Council, but several countries, including Poland, opposed.

On the second day of the summit, the leaders’ attention turned to nuclear power. They agreed on nonbinding safety rules and optional, nation-led stress tests for Europe’s 143 nuclear power plants. They have also requested that nonEU countries, particularly neighboring nations, conduct similar tests.

In response, the European Atomic Forum, a Brusselsbased trade association for the European nuclear energy industry, issued a communiqué to EU leaders, echoing PM Tusk’s domestic stance on nuclear power since the Japan disaster.

“It is premature to draw conclusions from the tragedy in Japan with regard to the European nuclear energy program … the combination of events in Japan is extremely unlikely to occur in Europe.”

Alice Trudelle

COURTESY OF KPRM

In a surprising about-face, Prime Minister Donald Tusk has said he has not excluded the possibility of holding a referendum on whether Poland should build nuclear power plants.

At a press conference last week, the PM said that without the support of the population, building a nuclear power plant would make little sense.

However, he expressed confidence that Poles are keen to have a modern and safe nuclear plant.

The prime minister said he believed the Polish public is, above all, interested in cheap, safe and clean energy.

“We can not give way to panic,” Mr Tusk was quoted by TVN24 as saying, referring to renewed uneasiness about nuclear energy in the wake of the crisis at Japan’s Fukushima Daiichi nuclear power plant.

Japan’s nuclear woes have sparked a crisis of confidence in Europe, but Poland initially seemed immune to it. Immediately after the Fukushima situation began to unfold, Mr Tusk’s statements made clear that he intended to move the country’s nuclear energy plan ahead as scheduled.

SHUTTERSTOCK

Prime Minister Donald Tusk raised eyebrows by mooting the idea last week

Poland OKs the Euro Plus Pact, European Stability Mechanism

Mr Tusk wants to avoid a “two-speed” European Union

NEWS

www.wbj.pl

Lost Chopin letters found A collection of letters written by Polish composer Fryderyk Chopin have been donated to the Fryderyk Chopin Museum in Warsaw. The letters were believed lost in 1939. The collection was donated by Marek Keller, an emigrant Polish art dealer. Mr Keller hasn’t revealed from whom he obtained the documents.

‘Golden Harvest’ backlash “Anti-Polish books sold here,” is a poster familiar to Gdaƒsk booksellers stocking the controversial new book “Golden Harvest” by Jan Tomasz Gross and Irena Grudziƒska-Gross. The authors accuse Poles of having taken part in the Holocaust and looting Jewish estates. “The aim of our project is to discourage booksellers from selling the book, to let them know that by selling it, they’re taking part in something shameful,” said an unidentified person interviewed by Rzeczpospolita. ●

MARCH 28 – APRIL 3, 2011

Presidency of the EU Council

Poland ‘prepared’ for its presidency Reports of chaos amid preparations are “rubbish,” according to the government With fewer than 100 days before the start of its presidency of the EU Council, Poland lags well behind. At least that’s how Gazeta Prawna told the story last week, citing, among other things, the country’s tardiness in finding interpreters and liaison officers, and in arranging transport solutions and accommodation for the thousands of EU officials traveling to and from Poland.

“That’s rubbish,” countered Miko∏aj Dowgielewicz, the government’s plenipotentiary in charge of preparations for the event. Speaking at a special forum last week, he assured attendees that Poland is on track to effectively discharge its duties during the presidency.

Many priorities The priorities for the Polish presidency, officially approved by the government in midMarch, focus on three main areas: further EU integration as a source of growth, European security and bettering ties with non-member states, particularly (but not limited to) the six

nations covered by the Eastern Partnership plan.

The “openness” which the Polish presidency seeks extends to the nations of North Africa and the Middle East. Poland aspires to be at the helm of the EU Council when accession talks with Croatia are finalized and, despite resistance from other bloc members, it remains keen on talks with Turkey.

More specifically, Mr Dowgielewicz said Poland wanted to use the presidency as an opportunity to promote itself internationally and to work on a post-crisis strategy to guarantee the stability of the euro, promote pro-growth policies and find ways to modernize the EU’s common agricultural policy.

He also spelled out worries concerning the situation in North Africa and EU security.

“The current events in North Africa and elsewhere have shown us that security and stability are not something we can take for granted here in Europe.

The events should give us added impetus to try and strengthen these two spheres,” he said, adding that Poland wanted Egypt and Tunisia to get a clear signal from the EU that it supported the democratic changes

COURTESY OF UKIE

4

Mr Dowgielewicz sees the presidency as a chance to promote Poland on the world stage in those countries and was ready to help. And how exactly does Poland plan to help?

“There are elections planned in Tunisia in July and in September in Egypt. After this, in the second half of the Polish presidency, we plan to organize a summit in Poland of highranking EU representatives and representatives from North Africa where we will offer our

cooperation in concrete terms,” he said. “What we must definitely avoid is the financing of dictatorships as has unfortunately happened in the past.”

Talking Turkey Mr Dowgielewicz also reaffirmed Poland’s strong support for the EU candidatures of Croatia, Serbia and Montenegro. “I hope that Croatia will

sign an accession treaty with the EU during the Polish presidency, while Serbia gains candidate status and Montenegro comes closer to accession,” Mr Dowgielewicz said.

Challenged on the conspicuous absence of Turkey from his comments, as opposed to those of Foreign Minister Rados∏aw Sikorski, who had recently stressed Poland’s support for that country’s accession, Mr Dowgielewicz downplayed the matter.

“That should in no way be regarded as a political statement. There are several countries aspiring for EU membership right now and I simply did not mention all of them,” he told WBJ. “Poland’s foreign policy has not changed on this matter. We are still very much in support of Turkey joining the EU and will work with our Turkish as well as EU partners during our presidency to work towards this goal.”

Generating enthusiasm for Turkish membership among other EU countries will be an uphill battle. But if Poland can prove the critics wrong and run its presidency efficiently, its political capital will assuredly grow.

Remi Adekoya

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INDUSTRY NEWS

MARCH 28 – APRIL 3, 2011

www.wbj.pl

Software

Treasury favors public sale of PKO BP shares

Asseco sets sights on rivaling SAP in Europe

COURTESY OF PKO BP

Banks

First in line for shares of PKO BP?

A decision on the matter is expected this week The Treasury Ministry is due to decide on the future of its majority stake in Poland’s largest lender, state-owned PKO Bank Polski, this week.

According to recent comments from officials, it appears to favor selling shares in the bank via a public offering.

The Treasury owns a 40.99 percent stake in PKO BP and will sell an undisclosed portion of its holding alongside stateowned Bank Gospodarstwa Krajowego, which currently holds 10.25 percent.

“I am leaning towards a decision to sell shares in PKO

BP [through] a public offering,” Treasury Minister Aleksander Grad told reporters.

Mr Grad did not reveal how many shares would be sold, nor when the sale would take place.

Treasury Ministry spokesperson Piotr Koszewski declined to comment on the issues.

Nevertheless, the sale will likely occur some time during autumn 2011, as BGK has previously said it would be ready to sell in Q3 of this year.

For its part, the government has previously stated that it might slash its stake in PKO to 25 percent by 2013. And Poland wants to generate z∏.15 billion from asset sales this year to help fund the budget deficit and curb debt.

In 2010, Jan Krzysztof Bielecki, the prime minister’s top economic advisor, even suggested Poland could sell its entire stake in the bank within the next couple of years. This appears unlikely at present, however, as the government seems keen on retaining control of the bank.

In mid-April, PKO shareholders will meet to vote on a proposal to limit the voting rights of all shareholders (besides the Treasury and BGK) to 10 percent. A vote in favor would allow the government to reduce its stake but retain control of the lender.

PKO shares were up 2.07 percent on the week.

Gareth Price

Polish State Railways PKP has announced a tender for a stake of 50 percent plus one share in PKP Cargo, Europe’s secondlargest rail freight operator.

PKP Cargo is the leader on the Polish rail freight market, with a 55.4 percent share of the sector according to its own numbers.

Media estimates put the value of the company at z∏.3 billion.

This will be “the largest privatization project in the railway industry in Europe,” said Maria Wasiak, chairman of the board of PKP, in a statement.

Initial offers must be submitted before May 12, after which PKP will invite selected companies to perform due diligence on PKP Cargo.

Officials close to PKP told Reuters that Deutsche Bahn, Europe’s largest rail freight carrier, was unlikely to bid for PKP Cargo, because EU competition regulators would be loath to agree to such a tie-up.

COURTESY OF PKP CARGO

PKP Cargo privatization on track for z∏.3 billion

PKP Cargo is estimated to be worth z∏.3 billion PKP Cargo has hit a difficult patch over the last few years, reporting losses of close to z∏.200 million in 2008 and a further z∏.498 million in losses in 2009. Since 2008, the company has been carrying out an intensive restructuring program, which included reducing

its then-44,000 strong workforce by 39 percent, mainly through a voluntary departure program.

It seems the company’s efforts have brought some results, as it posted a €60 million net profit in 2010.

Alice Trudelle

The software producer wants to be Europe’s second-biggest software provider Software producer Asseco Poland earned a z∏.415 million net profit on sales revenues of z∏.3.24 billion in 2010. The results were up 11 and six percent y/y, respectively.

The company has bold growth aspirations – CEO Adam Góral told Parkiet last week that Asseco aims to become the second-largest software provider in Europe, just behind Germany’s SAP. Its strategy calls for growth through M&A transactions.

Asseco purchased Israeli group Formula Systems for $145 million late last year and is already preparing to make another acquisition.

“In buying Formula Systems, we proved that we can do complex transactions,” Adam Góral told Parkiet. He continued, “In the medium term, we want to become the secondlargest software producer in Europe, with strong expansion on the American market.”

Achieving this goal, according to Asseco’s strategy, will require annual revenues of €1

billion from the sale of its own products and services. Based on its 2010 sales revenues, the firm is about halfway there.

According to Waldemar Stachowiak, an analyst at brokerage Ipopema Securities, €1 billion in sales is easily doable if the company devotes sufficient resources to aggressive expansion. He added, however, that strong acquisition activity might not meet with the approval of shareholders.

Mr Góral noted that Asseco is engaged in nonbinding talks regarding possible acquisitions, and he noted that it takes time to prepare for transactions.

Nevertheless, he admitted, “geographic expansion is a priority. If we come across a smaller company with a product that would complement our offer, we won’t say no.”

Asseco Poland, listed on the Warsaw Stock Exchange, had also been weighing a Nasdaq debut. However, due to the amount of effort going into its acquisition strategy and shareholder concerns, the firm does not expect to list on the American bourse in the foreseeable future.

Natalia Kazik

5

Tauron stake sold for z∏.1.3 billion The Polish government has sold a 11.9% stake in Tauron, the country’s number two utility, last week. The shares were sold at z∏.6.15 apiece through an accelerated book-building process, and the final transaction amounted to nearly z∏.1.3 billion. The price was a 3.8% discount on Tauron’s closing price on last Monday, prior to the launch of book building.

The deal signaled the end of the company’s privatization process. The Treasury has retained a 30% stake in the company.

Ferro to buy Czech peer Novaservis Ferro, one of Poland’s largest bathroom and heating appliance firms, has signed a contract to purchase a 100% stake in Novaservis, one of the Czech Republic’s leading bathroom accessories companies. The takeover will cost Ferro CZK1.17 billion, equivalent to z∏.191 million. ●

BUSINESS ENVIRONMENT

MARCH 28 – APRIL 3, 2011

Pension reform

Pension debate underwhelms No new arguments in the debate over pension reform, but plenty of minor controversy A televised debate held last week between current Finance Minister Jacek Rostowski and Leszek Balcerowicz, a former finance minister and former head of the National Bank of Poland, was supposed to help Poles understand the government’s planned changes to the open pension fund (OFE) system, but offered nothing new in terms of substance.

The debate lacked structure, and its participants used complicated economic terminology that likely confused many of the three million viewers who watched. In the end, the two economists largely repeated the same arguments they had been making since the government proposed the changes last year.

The government plans to reduce workers’ monthly wage contributions to private pension funds from 7.3 to 2.3 percent, transferring the difference to the state-controlled social security fund, ZUS. The government wants to avoid borrowing up to z∏.190 billion by 2020 in order to cover cur-

COURTESY OF THE WOLRD ECONOMIC FORUM

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Finance Minister Rostowski’s informality caused a stir rent pension obligations. It argues that the changes will help it improve its balance sheet while giving greater security to future pensions.

In the debate Mr Balcerowicz maintained that market solutions and transparency are the only guarantors of higher pensions. Mr Rostowski countered that investing in deficit reduction is a good investment for future retirees.

‘Leszkugate’ But while observers agree the debate offered no new information, the odd decorum of the participants certainly attracted attention. Mr Rostowski continually referred to

Mr Balcerowicz as “Leszku,” the familiar form of the former finance minister’s first name. Mr Balcerowicz, on the other hand, referred to Mr Rostowski as “Mr Minister.”

The odd situation has since been dubbed “Leszkugate.”

The next day, Mr Balcerowicz complained that Mr Rostowski had broken an agreement by which they would address each other formally. Mr Rostowski denied any such agreement had been brokered.

Mr Rostowski was an advisor to Mr Balcerowicz when he was finance minister in the early 1990s, and also while Mr Balcerowicz was the head of Remi Adekoya the NBP.

Innovation

Long-term uncertainty A gap in innovation and a looming demographic crisis could stifle Poland’s economy Poland needs to work harder, especially when it comes to innovation and employment, if it wants to maintain high GDP growth and thereby catch up with its European peers, according to a report by the World Bank.

“Poland weathered the recent crisis very well, but there is uncertainty about whether it will be able to return to high growth rates,” said Marcin Piatkowski, a senior economist at the World Bank and one of the authors of the report.

The World Bank argues that failure to raise employment levels, improve skills and increase technology absorption could cause a potential decline in GDP growth of one percentage point per year by 2012.

Polish public spending on R&D is not only low (a mere 0.6 percent of GDP), but also inefficient, according to the World Bank.

“One solution to improve this is to complete the reform of R&D institutes, including enabling insider privatization and giving financial incentives for applied research delivered to the enterprise sector,” said Natasha Kapil, an innovation specialist at the World Bank and a member of the team that prepared the report.

The report also warns that due to a shrinking labor force and an aging population, Poland’s demographic dependency ratio (the ratio of population over 65 to people between

16 and 64) will double in the next 25 years from about 30 percent to 60 percent.

The World Bank estimates that if older Poles, and especially women, were as professionally active as they are in Germany, Poland’s GDP would be up to six percent higher.

Given that women also have a greater life expectancy than men, maintaining a lower retirement age for women will become increasingly difficult to argue for, said Nina Arnhold, head of the team that AT prepared the report.

Playing catch-up Dates when Poland could achieve an income level on par with the EU15, and average GDP growth rate necessary to do so

5 4.5 GDP growth rate, in %

6

4

2028 2031 2035

3.5

2041 2051

3 2 2010

2132

2038

2066

2094

2122

2150

Source: World Bank

LISTED FIRMS

MARCH 28 – APRIL 3, 2011

Fuel production

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7

Energy

PGNiG sees record Analysts unimpressed profit, plans acquisitions with PGE’s 2010 results

Poland’s natural gas leader had a good 2010 and plans to use its earnings on acquisitions

Gas monopoly PGNiG recorded a profit of z∏.2.46 billion in 2010, z∏.1.22 billion higher than in 2009.

The higher result was the product of a record increase in domestic demand for gas, a more efficient use of infrastructure and a release of reserves.

Though the full-year profit was higher, the company ended Q4 2010 with a net profit of z∏.1.118 billion, 15 percent lower y/y, despite the fact that its quarterly revenues increased by 17 percent to z∏.6.63 billion.

Part of the profit generated in 2010 has been set aside for three potential acquisitions in 2011: Swedish utility Vattenfall’s Polish assets, Warsaw’s heating-network operator SPEC, and stateowned hydropower plant ZEW Nidzica.

In a report published last week, PGNiG valued Vattenfall’s Polish assets at between z∏.2.8-3.2 billion, SPEC at up to z∏.1 billion, and Nidzica at z∏.300-400 million. That would give it as z∏.4.6 billion in acquisition expenditures for this year.

The company has said that investment in 2011 would form its largest capital expenditure in the 2011-2020 period.

This year, analysts don’t expect the gas firm to post

such high numbers. In 2011 PGNiG will likely incur higher costs in comparison to last year, because of the rising price of oil. It also has little chance of negotiating a better price with Russia’s Gazprom.

The company’s board has argued that customers should share in the rising costs involved in the import of the commodity. PGNiG, which failed to secure permission to raise gas prices from April 1, 2011, is preparing to lodge another motion to this effect for the period starting on June 1.

The previous proposition would have seen prices rise by five percent, while the new proposal is said to include a higher increase.

The power provider’s annual results were bolstered by one-offs PGE, Poland’s largest utility, recorded a consolidated net profit of z∏.3.63 billion in 2010, down z∏.0.71 billion from 2009.

Consolidated sales revenues amounted to z∏.20.47 billion, marking a z∏.1.15 billion drop from 2009.

The results were roughly in line with market expectations, although some analysts found them dissatisfying “The results disappoint,” Kamil Kliszcz, an analyst at brokerage DI BRE, stated flatly.

“They are in line with expectations, but the structure of the results is worse. There was a release of the balance reserves and, without the support of those one-time factors, the results would have been around 15 percent worse than our estimates on the operational level,” Mr Kliszcz explained.

The company attributed its weaker sales revenues to compensation for the termination of long-term power purchase agreements (PPAs), which

NK, AT

Warsaw Stock Exchange

WSE net profit disappoints

dropped by 78 percent y/y.

“As we expected, excluding the impact of PPA compensation, our consolidated 2010 financial results are a little better than those achieved in 2009,” Tomasz Zadroga, president of PGE, said in a statement.

Evaluating the 2010 financial results, Mr Zadroga said, “With respect to the financial results, 2010 was a year of stabilization, in which we managed to prepare the Group for the expected growth in subsequent periods.”

PGE also revealed plans to restart the sale of its telecom unit, Exatel. It will take a more open approach than during its previous attempt, called off in January, the firm’s president announced last week. The process will start after the sale of Polkomtel – the mobile phone services operator in which PGE holds a minority stake – which is expected in the second quarter, Mr Zadroga added. PGE canceled the previous sale process of Exatel because it received no binding offers.

Natalia Kazik

Electric results PGE’s net profit and sales revenues (in z∏. billions), 2007-2010

Sales revenues

Net profit

30 25 20 15 10 5 zł.bln

2007

2008

2009

2010 Source: PGE

Legal News

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Contact: Miros∏aw Stefanik ms@pnplaw.pl

The WSE was hit by costs associated with its debut last year

Revenues are up, however, and many constituent firms plan dividends The Warsaw Stock Exchange booked a net profit of z∏.94.8 million for full year 2010, marking a 5.8 percent drop from its 2009 figure. The average forecast among analysts polled by Parkiet, meanwhile, amounted to z∏.97.5 (€23.7) million.

“The financial results of the Warsaw Stock Exchange Group reflect the market conditions, macroeconomic situation, current stage in the Group’s strategic development and, in large part, the remarkable events of historic importance to the growth of the WSE and the Polish capital market ... the privatization and IPO of the WSE, concluded in November 2010,” the company said in a statement.

The bourse attributed the net profit result to costs related to its privatization last year and a dividend paid out on profits from 2009 and earlier years. Speaking during the presentation of the results, Lidia Adamska, a member of the WSE’s board, noted that the total dividend had amounted to almost z∏.600 million.

Despite its disappointing net profit figure, the bourse saw sales revenues rise to z∏.225.6 (€56.5) million, a 13 percent y/y increase. Operating profit amounted to z∏.91.8 (€23) million and EBITDA stood at z∏.122.6 (€30.7) million, up 15.4 percent and 16.7 percent y/y, respectively.

Unlike the WSE itself, a large number of the bourse’s constituent companies saw significant y/y net profit growth in 2010 – a fact which will allow many to pay out mammoth

dividends this year.

Daily Rzeczpospolita reported that firms listed on the WSE could easily smash the collective z∏.13.3 billion dividend payment record set in 2007. Indeed, experts contacted by the newspaper say shareholders could receive a total of z∏.16.5 billion this year.

This is very good news for the Treasury. Although ongoing privatization efforts are reducing the state’s hold on WSE-listed companies, the state budget could be bolstered by more than z∏.3.9 billion from dividend payouts this year.

Among firms controlled by the Treasury, energy giant PGE plans the largest dividend. Some z∏.1.2 billion will flow to shareholders – z∏.607 million of which will go into the state budget.

Natalia Kazik

Bank books not official documents In its judgement of March 15, 2011, the Constitutional Tribunal found unconstitutional the provisions of the Act on Banking Law which give the same legal status to excerpts taken from banks’ accounting books as they do to official documents.

This is because the former affect consumers’ rights in court proceedings.

The provisions in question forced the consumer to prove that he/she was not in debt to a bank rather than placing the burden of proof on the bank. In the opinion of the Tribunal, banks’ privileged position in this regard is unjustified and in breach of the rule of equal status of parties in proceedings as well as of the constitutional rule of social justice.

The judgement may make it somewhat more difficult for banks to pursue claims against consumers.

Multi-million z∏oty penalty for Polkomtel In the opinion of the president of the Office of Competition and Consumer Protection (UOKiK), at the end of 2009 Polkomtel (operator of the Plus mobile phone network) made it impossible for the office to effectively conduct an inspection.

Specifically, the company did not release data, it delayed inspectors and provided

only partial documentation, chosen at its discretion.

As a result, the president of UOKiK has imposed a financial penalty of over z∏.130 million on Polkomtel for its lack of cooperation. The decision is not binding. In a press release published on its website, Polkomtel declared that the decision was groundless, stating that the firm had cooperated fully with UOKiK during the inspection. The mobile telecom plans to appeal to the Court of Competition and Consumer Protection.

Wage subsidies made easier The Act of October 29, 2010, has just come into force. This legislation amends the Act on Mitigating the Consequences of Economic Crisis for Employees and Entrepreneurs and is designed to facilitate entrepreneurs’ access to wage subsidies.

An enterprise which desires to obtain such aid will have to prove a fall in its business turnover of at least 15 percent during any consecutive three-month period after July 1, 2008. The aid under these rules will be paid only after the European Commission issues an opinion that such support is compliant with the rules of the common market.

Prior to the amendment, a fall in turnover of least 25 percent needed to be proven.

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INTERVIEW

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The Polish justice system

Sales, unemployment up Retail sales for February showed an increase of 12% y/y, exceeding market expectations of around seven percent and surpassing even December’s especially high figures.

Consumption was up in spite of consumer climate surveys, which were generally negative.

Meanwhile the unemployment rate rose to an annual high of 13.2%.

The data reflects the seasonal unemployment curve, which is higher in the winter months.

Inflation lower than forecast The main base inflation rate, or inflation excluding food and energy prices, amounted to 1.7% in February, as reported by the National Bank of Poland (NBP). This is less than the 2.1% predicted by analysts. The NBP also reported that the base inflation rate for January was 1.6%, the same as in December of last year. The Polish Monetary Policy Council’s official inflation rate target at 2.5% +/- one percentage point. ●

A guide to Polish business and industry

MARCH 28 – APRIL 3, 2011

Kwiatkowski’s full-court press Polish Justice Minister Krzysztof Kwiatkowski talks with WBJ about the state of the justice system and his plans to rebalance its scales Ewa Boniecka: Many Poles are unsatisfied by the way the Polish judicial system functions, and the length of court procedures is a common cause of complaints lodged with the European Court of Human Rights in Strasbourg. What is your ministry doing to improve the situation?

Krzysztof Kwiatkowski: I am fully aware that the Polish judicial system needs to undergo changes and my ministry is undertaking them.

Change is especially needed given the enormous growth in the number of cases filed with our common courts.

Between 2000 and 2010 the number of cases lodged with the common courts rose from 9.5 million to over 12 million. Our justice system cannot cope efficiently with such an enormous number of cases, so we are undertaking various measures to reform it.

What’s behind the growth in court cases?

Przewodnik po polskim biznesie i gospodarce

Poles put great confidence in independent courts in order to settle disputes. They resort much less often than other nations to alternative means of resolving legal problems, like arbitration and counseling with lawyers, which could result in a settlement before the case gets to court.

And I would say – half jokingly – that maybe we have a tendency in our national temperament to go to court even with minor disputes between neighbors.

The length of court cases isn’t the only reason Poles turn to the Court in Strasbourg...

The Court in Strasbourg is particularly concerned with complaints in two areas: firstly, the conditions of people held in prisons; and secondly, the abuse of temporary detention orders. And in both cases the situation in Poland has radically improved.

For the first time in years we have increased the num-

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8

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Mr Kwiatkowski wants to make “fundamental changes” to the court system ber of places in prisons. This is the result of certain investments and other measures leading to a reduction of overcrowded conditions in these institutions.

The number of temporary detention orders – and I am talking about cases involving

the unjustified use of such measures – has dropped significantly. This has been made possible because we have changed the legislative regulations.

In the last two years we have developed a large program for the rehabilitation of

prisoners by organizing public work for them outside prison grounds. The cost of these activities are covered by the State Treasury, and the program is bringing very good results for the detainees and is useful for society.

We have also introduced a

INTERVIEW

MARCH 28 – APRIL 3, 2011

And what are you doing to improve the courts themselves?

We have already taken some organizational and technical steps to improve the functioning of the common courts.

Since January 2010, Poland has been one of a few countries in Europe to have an “electronic court” system.

In other words, in certain c a s e s involving financial claims, a citizen can

file a motion to the court online and the court transmits its verdict the same way. And, in order to encourage citizens to use the e-court option, court fees in those cases are three to four times lower than for the traditional route.

Last year we set up a land register to be displayed online. It is very convenient for citizens and thousands of Poles are making use of it.

This year we are installing a system to record court hearings in an audio format which will eliminate troublesome and costly on-paper registration. After choosing which firm will install the technical equipment, this method will be introduced in the first courts by the end of this year.

In Spain, where such a system has been introduced, it has shortened the length of court hearings by about a third.

Why weren’t such improvements introduced earlier?

Well, I have been serving as justice minister for 14 months and many of my colleagues say that we have carried out a technological revolution in our courts during that time. Yet to improve our justice system we need to do more than just implement

modern technological measures, we also need to make fundamental changes to the way our courts function.

We have presented a bill to parliament on the reform of the common court system, which introduces – among other things – a periodic assessment of judges’ work.

At present the assessment of the courts’ work is confined to an overview of departments, but now we would assess the work of each judge.

We also want to introduce professional management in the courts, so the position of court director would be filled via an open process. This would relieve judges of the burden of management work and

case. I believe this will shorten the length of court proceedings and reduce the number of complaints filed with the Court in Strasbourg.

I have set up within my ministry a new codification commission for criminal law, and the new commission works under the chairmanship of prominent law profes-

away from politics and are based on strict laws. There are proper institutions to fight corruption, such as the police, and in cases linked with state interests, special services may be involved, including the Central Anticorruption Bureau.

It is only when those crimes are identified that the role of the prosecutors begins, and they turn the cases over to the courts. If someone is found guilty by the court, he will be convicted and meted the proper punishment.

I have the deep conviction that state organs should decisively pursue corruption offenses, yet should not try to provoke people to commit them. And unfortunately I have the impression – as many Poles do – that some operations conducted under the previous government aimed not only to pursue corruption, but also to cause deliberate provo-

“There is no possibility of legalizing same-sex marriages in Poland”

help them to concentrate on their important duties, based on the sacred principle of judicial independence.

I consider this bill to be very important, because it will create instruments to assess each judge’s work, to be carried out by visiting judges from higher courts, and it will help individual judges with less experience to improve their work. We have 10,000 judges in Poland and a decisive majority of them perform their duties excellently, but there are also some who do not and this reflects negatively on the justice system.

Do Poland’s civil and criminal laws need to be amended, in your opinion?

Yes, and we are already introducing some [amendments] as well as preparing a draft bill dealing with fundamental changes to criminal and civil law.

One of the legislative changes introduced last year is that courts are obliged to pay compensation when a citizen makes a legitimate claim about a gross delay in his

sor Andrzej Zoll. The commission has already come up with a proposal to extend the institution of plea bargaining, recently

SHUTTERSTOCK

system for carrying out sentences under electronic supervision, via the “electronic bracelet.” This is new in Poland and technical implementation of the system is just getting under way, so only around 1,000 prisoners are serving sentences under the system right now. But we intend to expand it and to implement it nationwide from January 2012.

introduced in Poland, to serious felonies.

The commission will also propose other changes to Polish criminal law, and I hope that these will be included in the government’s draft bill. We are also preparing a draft bill to improve civil law procedures and the execution of civil law.

All together my ministry is working on 10 bills involving various domains of the justice system, which needs to be made more effective and responsive to changes taking place in Poland.

What about corruption offenses – what’s your role in that area?

As justice minister, a member of government and a politician, I obviously have no direct role in fighting corruption or any other crimes.

Those matters are kept far

cation in this area. I hope that the era when some state institutions functioned this way is definitely behind us.

Parliament has bitterly debated an amendment to the law which governs the harmonization of national and supranational laws, with many opposition MPs expressing concern that this could open the way to the legalization of same-sex marriages in Poland. What is your take on the issue?

That law – which has been accepted by parliament and is now awaiting the president’s signature – is very precise on the question of marriage and includes provisions which state that a foreign law cannot be applied in our country if it will bring consequences contradicting the principles of law and order in Poland.

And Article 18 of our

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constitution states that marriage is a union between a man and a woman. So there is no possibility of legalizing same-sex marriages in Poland.

The whole debate over the amendment completely omitted its crucial relevance to private international law, which is important for Polish entrepreneurs because it states how disputes with foreign businessmen are to be resolved in situations involving operations in different countries.

So the act regulates not only individual disputes, but first and foremost the question of economic litigation.

And the regulations regarding private international law which are currently in force in our country were accepted in 1965, so they are completely unsuitable to today’s Poland.

The government, despite strong opposition from the Law and Justice party, pushed legislation through parliament which separated the roles of justice minister and attorney general. How do you rate the results?

This fundamentally changes the whole structure of our justice system. In previous years there were long public debates about whether the position of attorney general was exposed to political pressure if he was also the minister of justice.

Now, after the separation of those functions, there is not a shadow of doubt that the attorney general, who is appointed for a five-year term by the president [the present attorney general, Andrzej Seremet was appointed by late President Lech Kaczyƒski] is removed from politics and is fully independent from everybody and everything in performing his duties. ...

Let’s imagine for a moment that there were no such separation and the investigation into the [April 10, 2010] catastrophe in Smolensk was being supervised by an attorney general who was also the justice minister. There would be enormous suspicion and accusations that he was being politically manipulated by government.

So I consider the separation of the two roles as not only beneficial for our justice system, but also as a means strengthening Poland’s democratic order. ●

9

Wage hikes expected The government estimates that wages will rise on average by 3.7% this year. However, economists and employers say the increase may be as high as five or even six percent. Such dynamic growth will result from the expected economic upturn, the opening of the German labor market, and rising inflation.

Card payments expensive When customers make a purchase with a payment card, Polish businesses pay up to 1.6% of the transaction value to banks and payment organizations. These socalled interchange rates are the highest in the EU, according to research conducted by Dziennik – Gazeta Prawna. In the EU, rates are generally one percent or lower, according to Andrzej Maria Faliƒski, head of the Polish Organization for Trade and Distribution.

Wars for sale Shares of Wars, a company providing catering on trains operated by PKP Intercity, will go on sale on April 20, the Treasury has announced. The state wants to sell shares amounting to 42% of the company’s capital. The asking price for the company is z∏.11.7 million and the required security deposit has been set at z∏.1 million. The Treasury now has a 49% stake in Wars. This is the latest attempt to sell Wars’ shares, after no investors showed interest on March 8.

TP to sell Emitel for z∏.1.7 billion Polish telecoms provider TP Group has struck a deal to sell radio and TV broadcast infrastructure operator TP Emitel for z∏.1.7 billion to Montagu Private Equity, Rzeczpospolita reports.

So far, the two sides have come to a preliminary agreement. TP expects the sale of the subsidiary to boost its 2011 gross profits by some z∏.1.2 billion. TP Group says the sale is part of a strategy to sell off assets not connected to its primary activity, Rzeczpospolita writes. ●

Warsaw Business Journal Group and the Polish Chamber of Commerce, under the patronage of the Economy Ministry, have undertaken a new initiative called the Polish Export Promotion Program, aimed at promoting Polish exporters and their products abroad. Through this project we will shine a spotlight on Poland's export market, as well as the companies and products that it comprises, and draw attention to their achievements.

The project will include: • Made in Poland – A guide to Polish export • Mister and Junior of Exports, a competition to award Poland’s best exporting companies and export products – those which distinguish themselves by a high level of quality and innovation • A gala, on June 14th 2011, at which the awards will be given out

The entry form and competition rules are available on pages 79-82 To get more information about the project, please contact Sales Director Agnieszka Brejwo at abrejwo@wbj.pl

OPINION

MARCH 28 – APRIL 3, 2011

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11

Lies, damn lies and statistics A

side from the tragedy in Smolensk last year, the biggest story in Poland since its EU accession has arguably been the country’s remarkable economic performance.

“Poland’s budget deficit and debt figures could be higher than initially thought” Despite its relative poverty compared to the EU15 and much greater structural difficulties than most of its neighbors, Poland, the refrain goes, was the only EU country to have seen economic growth during the crisis year of 2009.

But what if that wasn’t exactly true? What if Poland

had been “cooking the books,” Greece-style, while the EU fretted about its many other problems? What if its account-keeping were simply inept? In today’s environment, with economies on Europe’s periphery succumbing to financial meltdown one after another, investors are hyper-sensitive to even a whiff of accounting misconduct.

Omissions and errors The fact that the National Bank of Poland has found an anomaly in its balance of payments sheet – amounting to some €15 billion, or four percent of GDP – is therefore extremely dangerous. The anomaly has been growing in the bank’s “omissions and errors” section, and finally reached such proportions that this month the central bank delayed the release of currentaccount figures by a week as it

searched for explanations.

The anomaly involves missing funds, not a surplus, and indicates that statisticians had either been overestimating the amount of investment pumped into the country or underestimating the amount it had been importing, with experts suspecting the latter. Indeed, preliminary investigations seem to indicate that most of the shortfall may have come from underestimating imports from Germany.

If this turns out to be the case, Danske Bank believes it could lead to a revision of Poland’s macroeconomic statistics as far back as its entry into the European Union in 2004. It would certainly mean Poland’s economic growth has not been nearly as strong as initially thought, casting doubt on its miraculous performance in 2009.

It would also mean that

Poland’s budget deficit and debt figures are higher than initially thought. Thus – even with the government’s ill-conceived pension “reform” plan – drastic budget cuts would be needed to bring the deficit down to three percent of GDP by 2012, as the European Commission is demanding.

(The deficit was at eight percent of GDP in 2010 and is expected to come in at some 6.5 percent this year.)

More troublingly, it would likely mean that Poland has already crossed the 55 percent debt-to-GDP ratio threshold, meaning legally required spending curbs would have to be implemented. There is some debate as to how much these would actually hurt ordinary Poles – many of the measures required by the law have already been implemented to a certain degree by the government. Nevertheless, it would

certainly prove an embarrassment and give the ruling Civic Platform a huge, indefensible weakness going into this autumn’s parliamentary elections. The party of fiscal responsibility would be the first in Poland’s history to trigger measures meant to constrain fiscal irresponsibility.

‘We told you so’ That’s bad news for the government, and likely bad news for the business community, which, for lack of a better alternative, would have liked to have seen Civic Platform strengthen its hold on power to push through significant economic reform. Minority coalition partner the Polish People’s Party has held Civic Platform back from certain reforms, such as dismantling KRUS, the alternative pension system for farmers.

Civic Platform has been

timid in its reform efforts, but at least it has made some attempts. Above all, it has governed competently. The same cannot be said for some of Poland’s previous governments.

It is therefore difficult to resist a “we told you so” here, as this newspaper has for years been arguing that the Civic Platform-led government must be bold in enacting economic reform. Now it may be forced to implement these reforms as a result of Polish law and, to add insult to injury, it may have to work hard to convince jittery and incredulous markets that Poland is not the next Portugal.

Poland has come far to distinguish itself from its neighbors as a safe haven for investment. It would be a shame to see that thrown away as a result of some shoddy accounting and the cowardice of reform-shy politicians. ●

The journey from Dawn to dusk

I

am jealous of those people who can discuss the subject of military intervention in Libya without evincing a shade of doubt. “In Libya, the civilian population, which is demanding

“The intervention in Libya has shown that the ‘protection of the people’ is rather selectively meted out” nothing more than the right to choose their own destiny, is in mortal danger” (Nicolas Sarkozy), “the people of Libya must be protected” (Barack Obama) and “the [UN] resolution is defective and flawed …

It resembles medieval calls for crusades” (Vladimir Putin).

Meanwhile, in Poland, Professor Roman Kuêniar, an advisor to President Komorowski, was less equivocal in his assessment of the international military involvement in Libya. But he hit the nail on the head: “The aims of the states participating in the operation are not known, nor is it known how this will turn out.”

Selective humanism The intervention in Libya has shown that the “protection of the people” is rather selectively meted out. There are many countries in the world whose leaders are decidedly crueler to their citizens than Colonel Gaddafi, but the repressed citizens of North Korea or Myanmar cannot count on “the right to choose their own destiny.”

Even more disconcerting is the fact that the military coalition has taken action not in defense of the Libyan people, who are deeply divided, but in defense of the armed insurgents. Concrete proof that Gaddafi’s supporters have murdered unarmed women and children is hard to come by.

It should also be remembered that the very leaders who are today condemning Gaddafi were good friends with him not long ago. In 2007, Gaddafi pitched his Bedouin tent for five days near the Louvre in Paris and then went on to stay in Spain and in Italy. Just one year ago Italian Prime Minister Silvio Berlusconi effusively kissed Gaddafi’s hand at the Arab League summit.

Who, then, is the “madman?”

An Odyssey indeed The only thing that I can describe as unarguable in this military operation is its name: Odyssey Dawn. The original “Odyssey,” Homer’s epic poem, takes place over a period of 20 years and it is not clear until the very end if the hero will finally make it back to his home port.

The Libyan version of the epic has barely gotten started, but the fates of its central characters are equally unclear.

What comes next?

The actors themselves have little idea. However, the experience of other military interventions conducted in recent years shows that none of these odysseys have ended satisfactorily.

Since the 1991 war and subsequent international intervention, Bosnia and Herzegovina has failed to

develop as a fully democratic, peaceful or affluent state. The operations in Kosovo were successful to a degree, creating a puppet mini state beset by corruption and clan warfare. And, the international community has failed to either reunify Cyprus or to offer a permanent solution to its civil conflict.

It is worth adding at this point that all of these countries are much smaller than Libya and have significantly more in common with Europe’s traditions and history.

would sit on the rebels’ side of the table if peace talks were to be held, how many there would be and what views they would hold.

Even a brilliant storyteller like Homer would be unable to weave all the threads of such a complicated story into a comprehensible narrative, let alone one with a satisfactory conclusion.

For now, the international coalition engaged in Libya knows at least one thing for sure: it has but begun the first chapter of the saga. ●

A satisfactory end?

Odysseus was in a better situation, because at least he knew what he wanted and what he was aiming for. The many actors in the Libyan epic, meanwhile, all seem to have different goals. And we still have little idea who

Joanna Wóycicka is the former head of the foreign sections of the ˚ycie Warszawy and ˚ycie newspapers and the former head of the foreign department at the Polish Press Agency (PAP). j.woycicka@hotmail.com

Unless otherwise noted, the opinions here are those of Warsaw Business Journal.

Readers’ comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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COVER STORY

www.wbj.pl

Bumar wins India contract It was reported that Bumar, a Polish consortium producing military equipment, has won a large contract in India. Valued at more than $300 million, this would be the biggest contract in the Polish military industry for years. India is looking to buy a number of armored recovery vehicles. Bumar, however, refused to confirm the reports. In April, Bumar also intends to finalize a different, $60 million contract with Vietnam.

Poland grounds last Tupolev For the time being VIPs will not be allowed to fly on the government’s remaining Tupolev TU154M aircraft. “I’ve forbidden VIPs to fly on the [Soviet-made] Polish TU-154M,” Defense Minister Bogdan Klich told RMF FM, as quoted

by PAP. The decision was made after Russia’s Federal Air Transport Agency suspended aircraft of this type. Mr Klich’s decision will remain in force until it is clear whether or not the Russian agency’s reservations also apply to the plane owned by Poland. The government’s other TU154M was destroyed in the Smolensk tragedy last year.

LNG terminal won’t hit prices The State Treasury says it will ensure that the costs of constructing and operating the LNG terminal at ÂwinoujÊcie will not be passed on to gas customers, Rzeczpospolita reports.

Previously authorities had studied plans to introduce a special levy to offset the costs of construction at the gas terminal. Similar fixed-rate levies are currently in place in other countries, such as Spain. ●

MARCH 28 – APRIL 3, 2011

National defense

Poland’s axis of allies

Anthony Casey

Though it is now a ‘security provider rather than a security consumer,’ Poland remains dependent on the EU and especially NATO for its defense As Poland prepares to take over the presidency of the European Union in July, the Polish government has deliberately shone the spotlight on defense.

Speaking in early March at the National Defense University in Warsaw, Defense Minister Bogdan Klich said priorities for the presidency would include the improvement of military capability and resource sharing, the development of the EU’s battlegroups (agreements between EU nations which enable a rapid reaction to security issues) and an increase of EU co-operation with both NATO and eastern neighbors, such as Russia. He added that the intention of the Polish presidency was to focus debate on these issues, and to “shape the Common Security and Defense Policy [of the EU] in the future.”

For Poland, both NATO and the Common Security and Defense Policy are key, so balancing the two is of prime importance – even if that balance is skewed towards the former.

Indeed, speaking on the eve of the NATO summit in Lisbon last November, Mr Klich told Polish Radio that the organization’s strategic development reflected “the interests of Poland.” At the summit, plans for a permanent US Air Force unit and missile defense system in Poland were discussed, and final confirmation of these plans was announced in early March during a meeting between the US Secretary of State Hillary Clinton and the Polish Foreign Minister Rados∏aw Sikorski in Washington.

At that meeting, Mr Sikorski stressed that both the EU and the US must play a role in ensuring the security of

Europe and its neighbors. He highlighted Poland’s commitment to this partnership by citing the US-Polish condemnation of rigged elections in Belarus.

For her part, Ms Clinton said the aim of the meeting in Washington was to “build mutual security, expand prosperity and promote democracy.” She added that both military and economic ties between America and Poland were growing, and stressed the “absolutely unbreakable friendship and alliance between the United States and Poland,” before thanking Mr Sikorski for Poland’s “very strong” military contributions in Afghanistan.

Shifting (in)security Diplomatic niceties aside, the fact that Poland has any voice at all on this issue marks a sea change. Not so long ago the country was deeply insecure about its own independence and concerned about its own military shortcomings.

According to Marcin Zaborowski, director of the Polish Institute of International Affairs (PISM), Poland is now “a security provider rather than a security consumer.” The country is also, he noted, committed to a number of international operations.

NATO is both the “main pillar of Poland’s security policy,” according to the Polish Ministry of Defense, and the primary framework for the country’s participation in international military operations.

Indeed, Poland was called upon to contribute to the international peacekeeping effort in Kosovo only a few months after it joined NATO. At present it has over 2,000 soldiers in Afghanistan and is a participant in the NTM-I training mission in Iraq and in

COURTESY OF NATO

12

NATO Secretary-General Anders Rasmussen was in Warsaw in March Operation Active Endeavour, which monitors shipping in the Mediterranean Sea. There is a NATO joint forces training center in Bydgoszcz.

The EU and its Common Security and Defense Policy is also important, but is generally seen as subordinate to NATO membership in terms of national security.

“The fact that Poland has any voice at all on this issue marks a sea change” Poland is currently involved in the creation of a “battlegroup” unit in co-operation with the Weimar Triangle (France and Germany) and Visegrad Group (Czech Republic, Hungary and Slovakia) nations. A representative of the Defense Ministry

noted that Poland is part of the European Union Force Althea in Bosnia and Herzegovina and that Polish military police comprised the fourth-largest contingent during EU operations in the Democratic Republic of Congo.

“Poland takes its alliances very seriously,” stated PISM’s Marcin Zaborowski. “We demonstrate that they are important to us, that we support the notion of a strong alliance, and we are proving ourselves to be a strong ally.”

That said, Poland has made it clear that it will not follow its allies into Libya’s civil war. As WBJ went to press, an international coalition was engaged in air strikes against the Gaddafi regime. NATO announced last Thursday that it would enforce a no-fly zone over Libya, but had made no decision regarding a possible take over of the military command of Operation Odyssey Dawn. Prime

Minister Tusk has said that Poland will limit its role to logistical and humanitarian activities.

Speaking to an assembly of Civic Platform party members in mid-March, he said: “I want to make it clear that Polish soldiers will take part in actions to safeguard the interests of Poland and of NATO’s security only when they are in immediate danger.”

Spending and sentiment When it comes to defense spending, Poland is willing to put its money where its mouth is. According to the Defense Ministry, Poland’s defense budget for 2011 amounts to z∏.27.5 (€6.84) billion. Of this, some z∏.1.22 billion is earmarked for foreign operations.

Moreover, NATO figures indicate that Polish defense spending rose by 30 percent between 2005 and 2010. In comparison, Hungary’s spend-

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COVER STORY

MARCH 28 – APRIL 3, 2011

US troops in Poland Paul Fogo is senior counsel with Miller Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com

Polish forces have been involved in training Afghani security forces To the east, Russia remains more of a concern. “We are addressing difficult historical questions,” Mr Zaborowski said.

“It will take them longer to come to terms with the end of the Cold War,” he added.

“There is some doubt over relations between Russia and the West, but over the past two years we have observed a movement towards reciprocation, mainly in relations between Russia and the EU, but also in other areas.”

Dependent on NATO The first NATO Secretary General, Lord Ismay, famously stated the organization’s primary goal was to keep “the Americans in, the Russians out and the Germans down.” The position may have changed with the new political climate, particularly regarding Germany and Russia – but America is still the prime mover in NATO. “That’s still very relevant,” Mr Zaborowski said.

“We are reliant on the US. NATO couldn’t possibly exist without it.”

Nevertheless, a NATO official told WBJ that as well as contributing troops in other actions, Poland played an “important role” in issues relating to partnerships and relations with Russia, Ukraine and Georgia, and to matters such as missile defense.

“Poland’s voice and input are critical,” the NATO representative added. ●

Armed for growth

The bullet business

Defense expenditures as a percentage of gross domestic product (based on current prices), 2010*

Polish defense expenditures (based on current prices, in z∏oty billions, 2000, 2005-2010

6 5

25,000

*estimated

*estimated 4

20,000

3

15,000

2

10,000

1

5,000

0 Germany

Poland

France

UK

Greece

NATO United States total

0

2000

2005

2006

Source: NATO

2007

2008

2009

2010

Source: NATO

In search of a “Polish Shield” The development of the Polish defense industry falls under the remit of the ministries of the economy, national defense and the Treasury. It is guided by the Strategy of Consolidation and Support of the Development of the Polish Defense Industry, which came into force on August 31, 2007.

The Strategy has seen the nation’s arms industry consolidate around the Bumar Group, which today consists of over 20 companies which manufacture and sell arms in the domestic and international markets.

According to Bumar’s te-

chnical advisers, Poland’s current air defense system – largely left over from the communist era – may be effective in an attack by piloted aircraft. More worrying would be a situation involving missiles, drones and other unmanned equipment.

To address those worries, Bumar has worked with the Scientific-Industrial Centre of Professional Electronics (RADWAR), missile firm MBDA and the Telecommunications Research Institute in Warsaw (PIT) to develop the “Polish Shield” system.

This is a multi-layered, medium-to-long–range air

defense system. The first layer consists of a detection and location station, a command center, and up to six launchers capable of firing eight ASTER 30 missiles. One unit of this system could protect up to 6,500 square kilometers and target threats flying at an altitude of up to 21 kilometers. The missiles, according to Bumar, have a speed of 1.4 km/s.

A second, short-range layer would bring MBDA’s MICA VL missiles into play with Polish radar and command systems, theoretically protecting an area of 2,500 square kilometers. These missiles could hit a target flying at

On December 11, 2009 the Polish and US governments signed a bilateral Status of Forces Agreement, commonly referred to as a “SOFA,” in anticipation of the stationing of US military personnel in Poland as part of the installation of an SM3 missile defense system in the country. The SOFA spells out the legal status of US military personnel, contractors and their dependents while stationed in Poland. In particular, the SOFA defines which country has jurisdiction over US personnel with respect to all things criminal. The Polish government negotiated hard on this last point, and succeeded in general to preserve its jurisdiction over US military personnel, contractors and their dependents assigned to Poland. As with most treaties, however, the devil is in the details. Below is a brief review of the most salient provisions.

US military bases In recognition of the common defense benefits to be realized by the location of US forces on Polish soil, the Polish government has agreed to provide the US military with land and facilities free of charge. Moreover, the US is free to construct necessary improvements without having to abide by Poland’s construction and permitting regulations. Instead, permission to build is granted by Poland’s Defense Ministry. The only exception to this broad exception regards the environment. Construction on a US military base is still subject to Poland’s environmental regulations.

Ownership of all improvements made by the US will transfer to the Polish government if and when the US vacates the base.

And finally, the policing of a US military installation will rest with the US military itself.

Criminal & civil liability

30,000

Spain

13

Legal Eye

COURTESY OF MON

ing dropped by 6.2 percent over that period, while France’s fell by 7.8 percent.

Among EU members of NATO, only the UK, Greece and France spent more on defense as a percentage of GDP than Poland in 2010.

“To compare with other EU states, investment in defense and security is considerable,” said Mr Zaborowski.

He noted that there is a widely held belief in Poland that defense spending should not necessarily face the first or heaviest cuts in times of economic turmoil.

This sentiment is likely related to the country’s dark history as a battleground for its neighbors. Although the threat of military aggression is now extremely remote, Poles are still keenly aware of historical wrongs.

That said, Poland’s relationship with Germany, an aggressor in the past, is today quite strong. And it has achieved a rocky rapprochement with Russia as well.

“Poland’s position geographically is the same as it has been for centuries, between Germany and Russia. However, the geopolitics are different,” Mr Zaborowski commented, stressing that the former nation has changed greatly. It is, he stated, “a fully democratic state with a strong culture of pacifism.”

www.wbj.pl

an altitude of up to nine kilometers, and fly at 750 metersa-second after 2.5 seconds.

These first two layers would be backed up by a very short-range system, consisting of artillery and artillery-missile systems effective for targets flying at altitudes of up to four kilometers. Bumar already makes a system called KOBRA which serves a similar purpose.

Whether this or another system is finally installed in Poland, time is short. The Defense Ministry said last November that the current system will be useless within five years. ●

The primary rule specified in the SOFA is that all US military personnel, contractors and their families are subject to and governed by Polish law with respect to the commission of a criminal or civil offense. With this said, however, Art. 13 obliges the Polish government to give a “sympathetic” ear to any request from the US side to waive its jurisdiction on a case by case basis.

Moreover, the Polish government is obliged to honor such a request except in the cases of particular importance to the Polish government. The wording leaves enough wiggle room for each side to assert jurisdiction, but at least in respect to egregious criminal conduct the text of the SOFA preserves Polish jurisdiction. Physical custody of US personnel facing trial will normally be exercised by the US military throughout the adjudication of the case, including the appeals process. US authorities are, however, obliged to enforce any conditions for detention imposed by a Polish court.

Once a final verdict of guilty has been entered by the court, the defendant will be remanded to the custody of the Polish authorities for imposition of the sentence.

Driver’s licenses The issuance of Polish driver’s licenses to US military personnel, contractors and family members is a notable exception to the general rule that Polish law governs.

True, US personnel are required to obey Poland’s traffic laws, but not necessarily to obtain a Polish driver’s license.

In lieu of a Polish driver’s license, US military personnel and contractors may drive in Poland based upon a US-issued driver’s license without the need to obtain additional permission. Family members of US military personnel may also drive without a Polish driver’s license; however, the right comes with three conditions: (i) valid US driving license; (ii) proven knowledge of Poland’s traffic laws; and (iii) additional permission to drive from US military.

Taxes Unlike criminal law, in the case of taxes the Polish government does not have jurisdiction over US personnel.

Income paid by the US government to military personnel, non-Polish contractors and their dependents is exempt from taxation in Poland. ●

14

MARKETS

www.wbj.pl

MARCH 28 – APRIL 3, 2011

Stocks report

world stock indices DJIA

NASDAQ

12,164.54 (March 24 close)

S&P500

2,734.64 (March 24 close)

3.31 (for the week)

FTSE100

1,309.51 (March 24 close)

3.74 (for the week)

DAX

5,885.21 (March 24 close)

2.81 (for the week)

3.32 (for the week)

Portugal ignored

NIKKEI225 6,939.89 (March 24 close)

9,451.44 (March 24 close)

4.25 (for the week)

5.45% (for the week)

CHANGE: 5.07%

CHANGE: 2.17%

CHANGE: 4.13%

CHANGE: -0.25%

CHANGE: -0.48%

CHANGE: -8.70%

(year to March 24)

(year to March 24)

(year to March 24)

(year to March 24)

(year to March 24)

(year to March 24)

52-week high: 12,418.00

52-week high: 2,840.51

52-week high: 1,344.07

52-week high: 6,105.80

52-week high: 7,441.82

52-week high: 11,408.17

52-week low: 9,596.04

52-week low: 2,061.14

52-week low: 1,010.91

52-week low: 4,790.00

52-week low: 5,607.68

52-week low: 8,227.63

Tomasz Jerzyk, technical analyst DM BZ WBK SA Polish stocks went up last week, as key global markets regained lost ground. The blue-chip WIG20 and the main WIG both inched up by over one percent. But even more important this time was that small and medium caps also grew. Stocks traded sideways on most days, although a Friday surge caused both the WIG and the WIG20 to nearly reach their multi-month highs.

Investors in Warsaw totally ignored the situation in Portugal and rushed to buy stocks. Some macroeconomic data was revealed in Poland, with the most important showing that retail sales rose by 12 percent – well above expectations. Moreover, CPI inflation rose by less than expected, which was of course positive news for stocks.

Major indices WIG

48,168.95 (March 24 closure)

WIG20

2,781.98 (March 24 closure)

24.03

23.03

22.03

21.03

18.03

17.03

16.03

15.03

14.03

11.03

10.03

09.03

08.03

24.03

23.03

22.03

21.03

18.03

17.03

16.03

15.03

14.03

2,600

11.03

46,000

10.03

2,640

09.03

46,600

08.03

2,680

07.03

47,200

04.03

2,720

03.03

47,800

02.03

2,760

01.03

48,400

28.02

2,800

25.02

49,000

07.03

52-week low: 2,270.13

04.03

Change year to March 24: 0.99%

03.03

52-week low: 39,109.37

02.03

52-week high: 2,794.73

Change year to March 24: 1.09%

01.03

Change for the week: 0.89%

28.02

52-week high: 48,421.80

25.02

Change for the week: 0.92%

Top 5 POLREST ZETKAMA HELIO RUBICON IMPEL

Closing 0.65 17.94 16.75 1.22 37.90

% change (week) 52-week high 38.30 1.06 23.30 17.94 15.92 26.25 15.09 1.25 14.88 37.90

52-week low 0.24 11.60 13.74 0.74 25.00

Top 5 KGHM GTC ASSECOPOL CEZ TPSA

Closing 183.90 20.80 52.40 140.70 17.05

% change (week) 4.61 4.00 2.85 2.70 2.46

52-week high 188.90 25.00 59.80 148.80 18.65

52-week low 88.20 19.58 49.02 118.70 14.10

Bottom 5 MIDAS RAINBOW ONE2ONE PRONOX 08OCTAVA

Closing 1.77 6.39 4.54 1.35 2.43

% change (week) -56.30 -11.25 -9.92 -8.78 -7.95

52-week low 1.77 6.07 4.54 0.58 1.81

Bottom 5 PBG POLIMEXMS PGE PEKAO TAURONPE

Closing 183.70 3.45 22.20 165.80 6.22

% change (week) -7.69 -4.17 -3.56 -1.25 -1.11

52-week high 252.00 5.29 23.97 196.50 6.89

52-week low 183.70 3.33 19.70 153.00 5.04

52-week high 8.12 9.39 11.15 2.32 2.71

Currency report

The calm after the storm

Other indices mWIG40

2,872.75 (March 24 closure)

sWIG80

12,668.93 (March 24 closure)

NewConnect

58.29 (March 24 closure)

WIG-Banki

6,916.63 (March 24 closure)

SOURCE: WSE

24.03

23.03

22.03

21.03

18.03

17.03

16.03

15.03

14.03

11.03

10.03

09.03

25.02

24.03

23.03

22.03

21.03

18.03

17.03

16.03

15.03

14.03

11.03

6,600 10.03

57.0

09.03

6,700

08.03

57.6

07.03

6,800

04.03

58.2

03.03

6,900

02.03

58.8

01.03

7,000

28.02

59.4

25.02

7,100

08.03

52-week low: 5,751.39

07.03

Change year to March 24: -0.65%

04.03

52-week low: 54.58

03.03

52-week high: 7,262.73

Change year to March 24: -8.07%

02.03

Change for the week: 0.93%

01.03

52-week high: 64.04

28.02

Change for the week: -0.78%

60.0

Kamil Cisowski, X-Trade Brokers Dom Maklerski SA

24.03

23.03

22.03

21.03

18.03

17.03

16.03

15.03

14.03

11.03

10.03

09.03

08.03

24.03

23.03

22.03

21.03

18.03

17.03

16.03

15.03

14.03

12,300 11.03

2,800

10.03

12,420

09.03

2,820

08.03

12,540

07.03

2,840

04.03

12,660

03.03

2,860

02.03

12,780

01.03

2,880

28.02

12,900

25.02

2,900

07.03

52-week low: 10,980.45

04.03

Change year to March 24: 3.43%

03.03

52-week low: 2,361.69

02.03

52-week high: 12,855.31

Change year to March 24: 2.32%

01.03

Change for the week: 0.99%

28.02

52-week high: 2,904.35

25.02

Change for the week: 0.97%

Raw materials firms and miners led the way, with KGHM contributing the most by soaring six percent. The metal miner’s performance was linked to strong gains in metals prices. Dividend expectations also helped to lift the stock. Telecom TP was also strong, as investors awaited a big dividend payout of z∏.1.5 per share.

Food companies and construction stocks, however, ended in the red. Kernel, which weights heavily on the food index, retreated after some earlier gains. PBG stock lost eight percent after Goldman Sachs gave it a lower evaluation last week.

This had a negative impact on the construction index.

Generally it was a good week for investors and it looks like more gains will be seen in the near future. ●

Last week the major currency pairs were not governed by as much volatility as they had been in the previous week. The market as a whole proved calmer regarding events in Japan and Libya.

Unsurprisingly, the Japanese yen showed the most volatility. After the intervention of G7 countries, it moved sideways in a very narrow range against major currencies. However, volatility over the whole week was lower than single-day volatility in the previous week.

Meanwhile, it looks like the euro’s long-term appreciation against the US dollar, the British pound and most other currencies has finally come to an end. Technical analysis shows that the resistance at the $1.4280 level is likely to mean the end of growth on the EUR/USD.

Moreover the euro seems rather overbought.

Interest rate markets expect three euro zone rate hikes this year and a total of six over the course of the next two years. A situation in which the European Central Bank decides to be even more hawkish is extremely unlikely. On the other hand, it’s quite possible that the US Federal Reserve could change its radically loose policy, a move that would support the dollar.

Growing problems concerning Portugal may also weaken the euro. The collapse of that country’s government last week and a lack of evidence to suggest it is overcoming its financial problems could soon result in other European countries being forced to provide it with financial aid. ●

currency rates 3.4966

3.5164

3.5218

22.03

23.03

24.03

25.03

3.5193 21.03

SOURCE: NBP

3.5414

3.0

18.03

0.1005 25.03

0.1005

3.5

3.4959

PLN-100JPY

4.0

24.03

0.1007 23.03

0.1007 22.03

21.03

0.1014 18.03

3.1311

3.1073 25.03

0.100

0.1009

PLN-RUB

0.102

24.03

3.1599 23.03

3.1424 22.03

21.03

3.1933 18.03

4.6097

4.5699 25.03

3.0

3.1567

PLN-CHF

3.5

24.03

4.6367 23.03

4.6435 22.03

21.03

4.6407 18.03

2.8516

2.8425 25.03

4

4.6427

PLN-GBP

5

24.03

2.8446 23.03

2.8358 22.03

21.03

2.8850 18.03

4.0270

4.0240 25.03

2.5

2.8588

PLN-USD

3.0

24.03

4.0353 23.03

4.0345 22.03

21.03

4.0615 18.03

4.02

4.0477

PLN-EUR

4.10

Poland has shelved its latest property restitution law, earning criticism

UBS is weighing the idea of demolishing the Ilmet building in Warsaw 19

17

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

GTC reports 2010 growth Developer Globe Trade Centre had €169 million in revenues and a net profit of almost €29 million in 2010, compared to over €156 million in revenues and a net loss of more than €139 million a year earlier. The company saw 30 percent growth in rental income, which was, however, partially offset by lower revenues from residential sales. Net profit from portfolio revaluation amounted to €43 million. ●

In this issue Echo’s Rezydencje Leśne . . . . .15 Synergy Business Park . . . . . . .15 Military Property Agency . . . . .16 Property-related stocks . . . . . .16 Ilmet tower to fall? . . . . . . . . . .17 Mokotów Plaza lease . . . . . . . .17 PBG’s results . . . . . . . . . . . . . . . .18 CEE investment . . . . . . . . . . . . .18 Restitution concerns . . . . . . . .19

Single-family residences

Echo touts Rezydencje LeÊne The project revisits the idea of “garden cities” in Poland Developer Echo Investment has started the realization of Rezydencje LeÊne, a singlefamily residential project in Warsaw. Located on ul. Wóycickiego and ul. Dankowickiej in the capital’s Bielany district, the estate will comprise over 30 homes sized from 300-700 sqm.

Echo Investment is touting the development as a natural heir to 19th century British urban planner Ebenezer Howard’s “garden city” concept, which, in loose terms, aims to combine the benefits of home-life in green areas with work-life in the city center.

In Rezydencje LeÊne, the developer is offering plots with

The Rezydencje LeÊne scheme will comprise more than 30 single-family residences building permits and full infrastructure, including roads, pavement, lighting and con-

nections with utilities; these will have been provided by the end of Q1 2012. Buyers will

then be able to start construction on houses which have been designed by StoMM

Architektura.

Located in a wooded area, the plots are sized from 1,5092,210 sqm, with prices ranging from z∏.850-1,280 per sqm.

“They are competitive compared to prices of plots offered in the M∏ociny area.

Even more so if we take into account the additional infrastructure which we offer to our clients,” stated Sylwia Pajdo, manager of Echo Investment’s sales office in Warsaw.

Kielce-based Echo Investment has already developed a number of residential projects in Warsaw, with its best known realizations including Mondrian House, Osiedle Inflancka and Babka Tower. The company is selling luxury apartments in its Klimt House scheme, located in the capital’s Mokotów district.

Adam Zdrodowski

Office

Ghelamco developing Synergy Work on new office complex to start in April Developer Ghelamco will launch construction on a new office project in Wroc∏aw in April. The company’s Synergy Business Park complex will comprise five buildings, ranging from five to 14 storeys in height, with a total of approximately 60,000 sqm of class-A space.

First to be developed will be a 25,000 sqm building which is scheduled for completion in H2 2012.

“Wroc∏aw is undoubtedly one of the fastest developing cities in Poland. I am convinced that the Synergy Business Park project, which is being realized by Ghelamco in accordance with the highest standards, will meet the expectations of even the most

demanding tenants and will contribute to further development of Lower Silesia,” stated Jaros∏aw Zagórski, business and development director at Ghelamco Poland.

Synergy Business Park will be located between ul. Horbaczewskiego and ul. Na Ostatnim Groszu, near the city’s international airport.

The development, designed

by Belgium’s Jaspers-Eyers & Partners, includes a sevenstorey parking lot for more than 700 cars.

Ghelamco has delivered more than 350,000 sqm of office and warehouse space during its 20 years in Poland.

In Wroc∏aw, the company previously realized the Bema Plaza office complex which, along with its residential component, Rezydencja Tumska, was completed in 2008.

Adam Zdrodowski

COURTESY OF PARTNER OF PROMOTION

The retail market in Bia∏ystok, the capital of Podlaskie voivodship and the largest urban center in northeastern Poland, is currently relatively saturated and it will take some time before investors in the city are able to secure tenants for new projects, according to Jones Lang LaSalle. From 2007-2008, Bia∏ystok saw a development boom during which five shopping centers totaling 118,000 sqm were delivered. As a result, the city now has the second largest retail space saturation ratio among urban centers with populations of between 200,000-400,000, following Cz´stochowa.

MARCH 28 – APRIL 3, 2011, LI 16/12

COURTESY OF ECHO INVESTMENT

Bia∏ystok market saturated

•

Synergy Business Park will deliver around 60,000 sqm of GLA

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

LOKALE IMMOBILIA – REAL ESTATE

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MARCH 28 – APRIL 3, 2011

Military properties

Osiedle Sportowa phase II

Finding success with Western openness

Developer W∏odarzewska is expanding its Osiedle Sportowa residential project in Brwinów near Warsaw. Construction will launch in April on two new buildings in the complex, which will provide a total of 38 units sized from 30.36-67.74 sqm.

Completion is scheduled for June 2012.

Search for hotel operator Developer MOT has appointed Cushman & Wakefield as the exclusive agent responsible for the selection of an operator for its Rialto hotel project in Wroc∏aw. The four-star facility, which will be located in the city’s Ostrów Tumski historical district, will offer 187 rooms as well as a conference area able to accommodate 600 people. MOT is best known in Poland for its five-star Rialto boutique hotel, located at the intersection of ul. Wilcza and ul. Emilii Plater in central Warsaw. ●

The Military Property Agency is working to become more visible and more investorfriendly Krzysztof Michalski, president of the Military Property Agency (AMW), is an imposing figure. Tall, broad and sturdy, Mr Michalski looks every bit the military man.

It comes as some surprise then to learn that his background is in boardroom, not battlefield, clashes. His smile and friendly demeanor are backed by experience hardwon during a career which includes stints in multinationals. Indeed, prior to joining the agency, Mr Michalski worked for Coca-Cola and SC Johnson, two firms that he says taught him a lot about how business is done in the West.

Over the last two years as president of the AMW, he has been trying to bring the same ethic to the organization, which sells disused properties owned by the Polish military.

‘Be here or lose out’ Part of that means bringing the AMW’s offer to MIPIM, the annual real estate mega-expo

COURTESY OF AMW

16

Modlin Citadel is one of a number of prime properties which the AMW has on offer out,” said Mr Michalski, adding that this year the agency had invested in a stand at MIPIM for the first time, and that the effort had already borne fruit. Investors that had long been in contact with the agency but rarely had time to meet were finally able to sit down for serious discussions. Even investors based in Warsaw had somehow never had time to talk, face-to-face, before attending MIPIM 2011.

Not that the agency has only had inquiries from Polandbased investors. “We’ve also seen interest from the US and all over Europe,” said Mr Michalski, naming Germany and Belgium as two European countries from which potential investors hailed.

held in Cannes, France, which took place in mid-March.

“You have to be active. If you’re not here, you lose

Security

Closing price on Mar 24

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏.mln)

BUDIMEX

98.25

4.52

84.55

106.10

4.30

25,530,098

2,508.33

CELTIC

20.55

-2.14

17.43

60.55

N/A

34,068,252

700.10

DOMDEV

47.15

0.34

38.52

61.00

-13.33

24,560,222

1,158.01

ECHO

4.86

-1.02

3.95

5.40

9.46

420,000,000

2,041.20

ELBUDOWA

157.00

3.29

152.00

188.40

-9.77

4,747,608

745.37

ENERGOPLD

3.91

2.62

3.57

4.45

-10.53

70,972,001

277.50

ERBUD

41.00

1.74

40.00

61.00

-25.32

12,602,711

516.71

GANT

13.62

3.18

12.98

26.00

-42.41

20,499,953

279.21

GTC

20.80

4.00

19.58

25.00

-11.26

219,372,990

4,562.96

HBPOLSKA

2.55

-2.30

2.50

3.90

-28.77

210,558,445

536.92

JWCONSTR

14.24

2.08

13.50

18.69

5.48

54,073,280

770.00

LCCORP

1.56

0.00

1.41

1.73

-3.11

447,558,311

698.19

MARVIPOL

9.00

0.00

8.83

20.29

-51.97

36,923,400

332.31

MIRBUD

4.50

-0.44

2.71

4.75

55.17

75,000,000

337.50

MOSTALWAR

43.00

-4.44

43.00

77.00

-38.13

20,000,000

860.00

MOSTALZAB

2.76

-2.82

2.63

4.84

-39.61

149,130,538

411.60

ORCOGROUP

37.00

7.53

19.00

37.00

21.55

14,053,866

519.99

PBG

183.70

-7.69

183.70

252.00

-15.58

14,295,000

2,625.99

PLAZACNTR

4.19

10.26

3.70

6.39

-31.09

292,647,720

1,226.19

POLAQUA

16.50

-1.20

16.00

22.50

-15.38

27,500,100

453.75

POLIMEXMS

3.45

-4.17

3.33

5.29

-25.81

521,035,327

1,797.57

POLNORD

31.54

0.10

30.50

44.00

-18.06

22,242,031

701.51

RANKPROGR

10.84

0.00

9.59

10.96

N/A

37,145,050

402.65

ROBYG

1.97

6.49

1.70

1.97

N/A

257,390,000

507.06

RONSON

1.38

-2.82

1.36

2.10

-21.14

272,360,000

375.86

TRAKCJA

3.51

1.45

3.32

4.97

-19.68

160,105,480

561.97

ULMA

82.50

0.98

70.00

86.20

7.35

5,255,632

433.59

UNIBEP

8.00

0.00

7.30

10.30

-5.66

33,927,184

271.42

WARIMPEX

10.50

3.14

7.64

10.85

27.43

54,000,000

567.00

ZUE

13.78

-0.86

13.50

15.14

N/A

22,000,000

303.16

It’s not hard to understand why the agency has investors’ attention. It owns some highly attractive property for investment, 40 percent of which is located within large cities, and much of which is already connected to basic utilities. Buildings – 2,700 of them – stand on much of the 7,000 ha of land the agency has on offer. And among those buildings is a particularly impressive piece of architecture – Modlin Citadel.

Construction of Modlin Citadel began with Napoleon in 1806 and it was greatly expanded by Russian forces in the 19th century. The building is some 2.5 km long, making it, according to the AMW, the longest building in Europe.

“Russian soldiers used to

COURTESY OF AMW

Property-related stocks

Selling citadels

Mr Michalski learned how to deal with businesspeople during his time in multinationals

ride horses inside it to get from one end to the other,” said Mr Michalski.

With its proximity to Warsaw – it’s situated about 30 km away – and its unique history and character, Modlin Citadel is particularly attractive for a conference center development, Mr Michalski said, something that Warsaw has needed for a long time. He pointed out that Modlin Airport, only three kilometers away, is nearing completion. It is scheduled to begin operations in 2012.

Mr Michalski also emphasized the variety and attractiveness of his agency’s numerous other properties, mentioning in particular the opportunity to build marinas on the Hel Peninsula on the Baltic Sea, and office/hotel development opportunities on K´pa Mieszczaƒska, an island in the middle of the Oder River in Wroc∏aw. “This is a unique opportunity in Europe,” boomed Mr Michalski, touting that city’s well-educated workforce and its proximity to the German border.

But to fulfill its mission of selling disused Polish military property, Mr Michalski knows that going to MIPIM once a year isn’t enough. The AMW will also be present at the International Property Show in Dubai from May 10-12, and is considering a presence at Expo Real in Munich in October.

Positives in the crisis Asked if the crisis had negatively affected the agency, Mr Michalski responded that there had been an upside to it in the sense that it had changed investors’ attitudes.

“The crisis has changed behavior in a positive way,” he said.

“Investors now require more from sellers. Previously they were more willing to take risks, they weren’t careful.”

Mr Michalski added that big pieces of land no longer sell as well as they once did, and that the agency has had to divide up some of its larger plots in order to find buyers.

More than anything, the crisis forced the agency to focus on finding ways it can incentivize investment in its properties. “We are working hard to prepare zoning plans [for our properties],” said Mr Michalski. “More and more [of the agency’s] properties have them.”

The AMW has also moved to emphasize transparency, so that investors know what to expect. “It is important that we sell in a clear way,” said Mr Michalski.

And it looks as if the agency will have plenty of opportunities to do just that.

Andrew Kureth

MARCH 28 – APRIL 3, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

17

Skyscrapers

The building is from a “previous era” Swiss bank UBS is considering the demolition of its Ilmet building, located at Rondo ONZ in Warsaw’s Wola district. The reason? It’s not tall or modern enough.

Ilmet, delivered in 1997, stands about 83 meters from ground floor to roof (103 meters in total). It ranks among the 20 tallest buildings in the capital, but is dwarfed

Mokotów Plaza fully leased out, sold Celtic Property Developments (CPD) has leased out the final vacant space in the Mokotów Plaza office building in Warsaw.

This lease transaction also marks the official completion of the sale of the building. In August 2010, CPD sold Mokotów Plaza to Spanish investment fund Azora Europe for €33 million, but the agreement called for the developer to fully commercialize the scheme.

Located on ul. Post´pu in the capital’s S∏u˝ewiec area, Mokotów Plaza is a five-storey facility offering 15,290 sqm of GLA. Tenants include MediaCom, Polkomtel, Hachette, VF Polska Distribution, ISource, Abantia and Telepizza.

The project is the third office building which Celtic Property Developments has developed in Warsaw’s S∏u˝ewiec district. The company also built the Helion and Luminar buildings, which form a complex called Cybernetyki Office Park, in the same neighborhood.

Another office investment within that complex is currently part of Celtic’s pipeline.

Construction is scheduled to start by the end of H1.

Warsaw Stock Exchangelisted Celtic Property Developments has a land bank of some 75 ha in Warsaw. Apart from office projects, the company is planning a major residential scheme in the capital’s Ursus district. The firm also provides asset management services for external institutional investors – it currently controls approximately 1.9 million sqm of income producing property.

Adam Zdrodowski

by the neighboring Rondo 1, which stands around 160 meters to its roof (and 192 meters in total).

According to Tomasz Andryszczyk, a spokesperson for Warsaw City Hall, representatives of UBS and city officials met at the recent MIPIM real estate fair in Cannes, France, to discuss the matter.

“Representatives of UBS informed us of plans concerning the demolition of the building and the construction

of an edifice which is twice as high,” he said.

Asked whether UBS’s plans would be accepted by City Hall, Mr Andryszczyk said, “General regulations allow for the construction of taller buildings in this area and there are no indications of opposition to this plan.”

Nevertheless, UBS is apparently just weighing the idea for now, and not committed to it.

The firm could choose to simply renovate the building rather

than start anew.

Commenting on the possibility of the Ilmet building being replaced, Andrzej Cho∏dzyƒski, head of the AMC-Andrzej M. Cho∏dzyƒski architectural studio, said that the emergence of taller buildings in the vicinity and plans to build a new subway stop at Rondo ONZ had changed the character of the locale. It is becoming less of a fringe area of the city.

“From the urban point of

WIKIMEDIA COMMONS

Ilmet not tall enough?

Ilmet could be replaced by a much taller structure view, the loss of the building wouldn’t change Warsaw’s landscape for the worse.”

Mr Cho∏dzyƒski also

explained that, in terms of the technologies applied in highrise buildings today, Ilmet is a relic of “a previous era.” NK

18

www.wbj.pl

New Cross Point tenants Developer Mermaid Properties has leased over 900 sqm of space at its Cross Point office building in ¸ódê since the beginning of this year, bringing commercialization to almost 80 percent. New tenants at the facility include TVN, Onet.pl, ZUMI, Konica Minolta Business Solution, Mostostal Warszawa and Trust Properties. Cross Point is a class-A development offering more than 12,500 sqm of office space on nine floors.

Action in Tulipan Park Segro has leased over 8,100 sqm of warehouse space at its Tulipan Park Warszawa logistics center in Nadarzyn to IT distributor and computer hardware manufacturer Action. Colliers International represented the developer in the transaction. Tulipan Park Warszawa sits on a 32 ha plot located on national road No 8. The complex offers 140,000 sqm of warehouse and light industrial space. ●

LOKALE IMMOBILIA – REAL ESTATE Property investment

Teutonic bias

CEE second most attractive But Germany takes top spot for another year Germany and CEE are the two most attractive European markets in which to purchase real estate in 2011, according to a new study by CB Richard Ellis.

In a survey of almost 350 European real estate investors, 32 percent and 24 percent of those polled named the two locations as their top investment targets, respectively, up from 18 percent and 16 percent last year. The majority of investors are currently

MARCH 28 – APRIL 3, 2011

"In Europe, which country/region do you believe to be the most attractive for making investment purchases this year?"

2010

interested in core assets, with over 70 percent of those polled expecting the historically wide gap in yields between prime and secondary properties to persist or become even wider in 2011, and 61 percent not planning to invest in secondary property at all this year.

“Whilst the majority of demand is focusing on core assets in 2011, we expect an increasing number of investors will start turning to more secondary assets in the second half of the year and into 2012 as a result of the intense competition for core assets,”

Patrick O’Gorman, CEE capital markets director at CBRE, said in a statement.

The survey found that the retail and office sectors are now the two most attractive real estate sectors for investors, with 43 percent and 35 percent of respondents, respectively, having named it their primary targets. Within the retail market, shopping centers are considered the most attractive retail sub-market.

In the global perspective, meanwhile, Western Europe was clearly preferred by investors in both 2010 and

2011

40 30 20 10 0

Germany CEE

UK

France Spain Nordics

Italy

Other

Source: CB Richard Ellis

2011, with Asia the secondmost favored destination, albeit with just half as much interest. CEE stood in third place both years, followed by

North America, with marginal interest in South America, Africa/Middle East and, in 2011 only, the Pacific region.

Adam Zdrodowski

PBG’s 2010 revenues and profit up seven percent PBG, one of Poland’s largest construction groups, saw its sales revenues and net profit grow to over z∏.2.74 billion and z∏.224 million, respectively, marking seven percent annual growth in both cases. As of January 1, 2011, the group’s orders book was valued at z∏.5.2 billion, of which z∏.2.8 billion worth of contracts were scheduled for realization this year.

“This is a comfortable situation for us, since it ensures revenues for the next few years

and, in the case of the contract for the construction of the LNG terminal, the portfolio takes us even to the year 2014,” Jerzy WiÊniewski, president of PBG’s management board, wrote in a letter to shareholders.

He added that the group is waiting to learn the results of a number of tenders in the next few months, the combined value of which amounts to more than z∏.30 billion. PBG now sees the energy sector as a chance to boost revenues as

well as increase its scope of operations.

Last year the firm began negotiations with Spanish construction group OHL concerning a strategic partnership in Poland and abroad. The two entities are already trying to secure contracts together.

“Our ambition is to expand internationally. Countries such as Ukraine, Russia, Romania, Bulgaria and Brazil come across as very interesting and promising markets,” Mr WiÊniewski Adam Zdrodowski said.

Falling since autumn PBG's stock price, March 2010 - March 2011*

250

225

200 *Price on 23rd of each month or nearest trading day

175

Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar 2010 2011 Source: Warsaw Stock Exchange

MARCH 28 – APRIL 3, 2011

LOKALE IMMOBILIA – REAL ESTATE

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19

Property restitution

No resolution in sight E Blake Berry, Adam Zdrodowski The government has shelved its latest attempt at restitution legislation, meaning property investment isn’t getting any easier

Legacy of the past Poland was unusual among Soviet Bloc nations in that much of its land remained privately owned, with nationalization confined to the big cities and former German territory ceded to Poland at the end of World War II. Nevertheless, restitution is a major issue.

“Poland is the only member of the former Soviet Bloc and EU which never adopted a comprehensive restitution law.

So it’s left to individuals to fight it out in the courts,” said Paul Fogo, senior counsel at Miller, Canfield, W. Babicki, A. Chelchowski & Partners.

In Warsaw, the so-called “Bierut Decree” of October 1945 did away with all private land ownership, a move justified by the need to rebuild the shattered city. The inhabitants of the capital were to apply for “temporary ownership” of their properties.

In theory, officials could reject such applications only in situations when the use of the property was no longer possible because of development plans.

But, in practice, many rejections were given for purely ideological reasons. Some applications were simply never processed.

As a result, since 1989 War-

saw has had to address the property rights of the legal heirs of those whose property was expropriated. Since then the city has been reviewing the original applications and invalidating groundless refusals.

“In 1945-1949, some 17,000 applications for establishing temporary ownership were made. Currently only the applications made at that time are being verified, there is no possibility to file new claims concerning the restitution of the decree-related properties,” said Magdalena JadziewiczKasak from the Warsaw City Hall’s press office.

She added that as far as the duration of the restitution process is concerned, there is no rule and each of the cases is different. “The procedure lasts from several months to more than 10 years,” Ms JadziewiczKasak said.

Complicated claims

SHUTTERSTOCK

Almost seven decades after the end of World War II, Poland still bears plenty of scars.

Among the most visible are the “ruins,” as locals often refer to them – empty, dangerously dilapidated buildings, often surrounded by housing estates or tucked behind modern businesses. Then there are areas accurately described as “noman’s land,” plots of land standing curiously unoccupied in prime office areas or adjacent popular residential developments.

These are, in a very real sense, wounds left over from the war and subsequent communist rule. And they are slow to heal.

In some places this is because a claim has been made on the property, but the legal and administrative processes involved are very slow. In other cases the legal owner of the property may be known, but impossible to find. The upshot is that Polish cities are riddled with attractive yet effectively useless plots of land.

ul. Chmielna in downtown Warsaw. The investment sits on a plot which the latter company reclaimed in 2001.

In another case, the heirs of the pre-war owners of Hotel Europejski in Warsaw regained their property in 2005. The vast majority of the claimants are still waiting for a happy ending, however.

And in the meantime, land ownership disputes pose a serious obstacle to the development of new real estate projects.

A number of prime plots in central Warsaw sit vacant despite having great potential.

AIG Lincoln Polska, for example, has been planning to develop land located on the western side of the capital’s ul. Marsza∏kowska, between ul. Królewska and ul. Âwi´tokrzyska, for several years now. Apart from difficulty in securing a planning decision, the investment has been plagued by land claims.

“We are not optimistic about this project,” commented Miros∏aw Szydelski, investment director at AIG Lincoln.

Why does it take so long? In part, because Poland lacks the Poland is littered with ruins such as this abandoned office building in Silesia proper legal framework to deal can still seek limited compensa- percentage points. ment’s “disappointment” with with the issue.

“The allocation of a sum of the move.

Previous governments have tion.

To do this, the claimant must z∏.20 billion for the realization “It’s not just a matter of justried to pass restitution legislation, but the bills never made it still go through the process of of the act could thus result in tice. It also lies in the best interto the Sejm for voting. In any trying to get the property back, Poland passing the public debt- est of the Polish [people], case, these laws would have even if it’s impossible, in order to-GDP ratio permitted by the because it would remove simply facilitated the process of to get a judge to officially rule European Union,” the Treasury doubts about the titles of ownership stemming from potential compensating past owners or that the property cannot be wrote. claims to the property,” the their heirs, but would not have World Jewish Congress quoted returned the property itself.

Mr Eizenstat as saying. The And compensation would have Congress expressed similar senamounted to a fraction of the timents in a separate statement. current value of the property.

These comments had little But, for those pursuing effect, aside from riling property restitution claims, Poland’s foreign minister. flawed legislation would proba“If the United States had bly be better than no legislation reclaimed. Afterwards, ruling in at all.

Because of the lingering wanted to help Polish Jews, a Mr Fogo described the pur- hand, the claimant can pursue effects of the global financial good moment for that would suing of a restitution claim as a the State Treasury for compen- crisis as well as Poland’s current have been 1943-44, when the complicated process. First, the sation. economic situation, “the draft majority of them were still alive, Adding to the muddle is the act cannot be implemented,” and Poland was pleading for would-be claimant must prove that the property was improper- judiciary. “Restitution cases are according to the government. help … Such intervention is so complicated that it is often No further course of action is now somewhat late,” FM ly nationalized.

“If the government took the impossible to find a judge with noted in the communiqué, nor Rados∏aw Sikorski commented property at some point and the the proper expertise,” Mr Fogo is there any suggestion that the in mid-March. process followed the then-valid lamented. matter will be revisited in the regulations, the people are out future.

Few successes of luck. You can’t just get back The latest failure The decision to end work on With no legislative push to what was taken from you – you The government’s latest the restitution law met with improve the situation, land have to prove that they didn’t attempt to address restitution international criticism. Many ownership problems will confollow their own procedures,” was shelved in early March. In a restitution claimants today are tinue to play a significant role in he said. communiqué announcing the Holocaust survivors or their Polish cityscapes.

Second, in order for a suspension of work on the law, heirs, so the matter is followed There have been a few succlaimant to actually regain a the Treasury stated that, with particular interest in Israel cess stories. LHI and Dom property, it must still be in the according to estimates from the and the US. Towarowy Bracia Jab∏kowscy possession of government finance minister, enacting it Stuart Eizenstat, a special are now developing Nowy Dom (local, city or state) authorities. would have caused public debt advisor to the US secretary of Jab∏kowskich, an office and If it’s been sold off, the claimant to jump by z∏.18 billion and the state on Holocaust issues, pub- retail investment located at the can’t get it back, but he or she debt-to-GDP ratio by one to 1.1 licly expressed the US govern- intersection of ul. Bracka and

“Restitution cases are so complicated that it is often impossible to find a judge with the proper expertise”

Situation unchanged Mikolaj Martynuska, director of development consultancy at CB Richard Ellis, decried the politicians of the post-communist period for lacking the “courage” to resolve the issue and simplify the process of investment.

“With all due respect to those people who lost their properties in the dark era of communism, this situation creates a serious risk factor and a burden on the transfer of ownership in Warsaw, which consequently obstructs development of several parts of Warsaw,” he stated.

“Unfortunately this issue concerns mostly the city center of Warsaw and seriously hinders availability of land. It obviously has a very visible impact on land prices, as well as on the quality of the city landscape, which is devastated by the unequal development of our surroundings,” Mr Martynuska added. “I’m afraid this situation will not change any soon.”

Warsaw City Hall’s take on the matter? Caveat emptor.

“Every investor planning to acquire a plot in Warsaw should carefully check its legal status first,” said Ms JadziewiczKasak. “Checking the legal status of a property can be done by contacting the Real Estate Department of Warsaw City Hall.” ●

20

THE LIST

www.wbj.pl

MARCH 28 – APRIL 3, 2011

Financial Services

Commercial Banks www.bookoflists.pl

Rank

Ranked by revenue from interest and fees in 2009

Company name Address Tel./Fax E-mail Web page

Revenue from interest and fees (mln z∏)

Total revenue (mln z∏)

Net profit (mln z∏)

Gross profit on banking operations (mln z∏)

Share capital (mln z∏): Dec. 31, 2009 / June 30, 2010

Net assets (mln z∏): Dec. 31, 2009 / June 30, 2010

C/I (Costs/Income) Ratio: 1st half of 2010 / 2009 / 2008 / 2007

1st half of 2010 / 2009 / 2008 / 2007

Activities Current accounts / Savings accounts / Hard currency accounts

Commercial loans / Retail loans / Mortgages

Total employees / Year founded

Top local executive / Title

CFO

PKO Bank Polski SA ul. Pu∏awska 15, 02-515 Warsaw 1 22 521-8440/22 521-8470 prasa@pkobp.pl www.pkobp.pl

6,943.9 12,366.7 12,178.5 9,604.4

7,282.1 13,927.0 13,261.6 10,720.5

1,502.3 2,305.5 3,120.7 2,903.6

4,778.4 8,607.0 9,096.7 7,447.1

1,250.0 1,250.0

156,478.7 165,699.3

41.9% 47.9% 45.8% 52.7%

✓ ✓ ✓

✓ ✓ ✓

27,119 1919

Zbigniew Jagie∏∏o President

Bartosz Drabikowski

Bank Pekao SA ul. Grzybowska 53/57, 00-950 Warsaw 2 22 656-0000/22 656-0004 info@pekao.com.pl www.pekao.com.pl

WND 9,464.0 11,047.0 7,190.0

4,957.0 10,527.0 12,122.0 7,761.0

1,227.0 2,421.0 3,541.0 2,162.0

3,526.0 7,053.0 7,834.0 5,398.0

18,371.1 19,006.9

130,616.1 133,427.9

51.2% 52.1% 48.3% 51.1%

✓ ✓ ✓

✓ ✓ ✓

18,660 1929

Alicja Kornasiewicz

Luigi Lovaglio

Bank Zachodni WBK SA ul. Rynek 9/11, 50-950 Wroc∏aw 3 61 856-4017/61 856-4015 rzecznik.prasowy@bzwbk.pl www.bzwbk.pl

2,356.0 4,761.0 4,839.0 3,885.0

2,576.0 5,171.0 5,088.0 4,045.0

517.0 939.0 954.0 1,111.0

1,750.0 3,288.0 3,258.0 2,992.0

730.7 730,7

6,036.5 6,247.4

48.7% 50.0% 51.4% 53.4%

✓ ✓ ✓

✓ ✓ ✓

9,870 2001

Mateusz Morawiecki

BRE Bank SA ul. Senatorska 18, 00-950 Warsaw 4 22 829-0000/22 829-0033 info@brebank.pl www.brebank.pl

2,243.0 4,454.0 4,509.0 3,190.0

2,626.0 5,223.0 5,527.0 4,025.0

254.0 131.0 857.0 710.0

1,411.0 2,758.0 2,589.0 4,025.0

1,521.7 3,487.9

4,120.2 6,508.6

51.2% 54.2% 55.1% 55.5%

✓ ✓ ✓

✓ ✓ ✓

5,181 1986

1,956.0 4,137.0 4,376.0 3,501.0

2,038.0 4,276.0 4,414.0 3,584.0

369.0 595.0 445.0 631.0

1,319.0 2,480.0 2,079.0 2,029.0

130.1 130.1

4,884.4 5,280.1

59.4% 58.8% 70.5% 67.0%

✓ ✓ ✓

✓ ✓ ✓

8,525 1989

Ma∏gorzta Ko∏akowska

1,610.0 3,397.0 2,080.0 1,640.0

1,621.0 3,448.0 2,133.0 1,660.0

-224.0 53.0 234.0 421.0

1,100.0 2,269.0 1,291.0 1,660.0

383.3 383.3

4,389.5 4,165.6

WND WND 59.6% 52.3%

✓ ✓ ✓

✓ ✓ ✓

7,204 1989

Richard Gaskin

Bank Millennium SA ul. Stanis∏awa ˚aryna 2A, 02-593 Warsaw 801-331-331/22 598-2563 www.bankmillennium.pl

1,481.0 2,950.0 3,060.0 2,238.0

1,616.0 3,307.0 3,274.0 2,424.0

138.0 1.5 413.0 462.0

854.0 1,514.0 1,866.0 2,424.0

3,491.4 4,545.5

44,913.8 46,317.0

63.3% 70.4% 64.5% 61.9%

✓ ✓ ✓

✓ ✓ ✓

6,179 1989

Bogus∏aw Kott President

Julianna BoniukGorzelaƒczyk

Bank Handlowy w Warszawie SA ul. Senatorska 16, 00-923 Warsaw

1,352.0 2,759.0 3,040.0 2,848.0

1,610.0 3,325.0 3,493.0 3,462.0

349.0 504.0 600.0 824.0

1,286.0 2,418.0 2,313.0 2,447.0

523.0 523.0

6,199.0 6,132.0

52.5% 53.5% 62.3% 60.6%

✓ ✓ ✓

✓ ✓ ✓

6,155 1870

S∏awomir S. Sikora

Witold Zieliƒski

1,287.0 2,724.0 2,702.0 1,963.0

1,432.0 3,157.0 3,034.0 2,227.0

73.3 34.6 325.0 391.0

765.0 1,799.0 1,586.0 1,362.0

1,358.0 1,358.0

39,077.0 42,245.0

58.5% 54.5% 67.5% 70.1%

✓ ✓ ✓

✓ ✓ ✓

4,700 1990

Maciej Bardan

5

ING Bank Âlàski SA ul. Sokolska 34, 40-086 Katowice 32 357-7000/32 357-7507 www.ingbank.pl

Bank BPH SA Al. Pokoju 1, 31-548 Kraków 6 58 308-5557 pytanie@ge.com www.bph.pl

7

8 22 657-7200/22 692-5023

listybh@citi.com www.citihandlowy.pl

Kredyt Bank SA ul. Kasprzaka 2/8, 01-211 Warsaw 9 22 634-5400/22 634-5335 Kb24@kredytbank.pl www.kredytbank.pl

President

Paul Barry

President

Cezary Stypu∏kowski President; General Director

Karin Katerbau

Miros∏aw Boda

President

Acting President

George Newcomb

President

President

10

Bank BG˚ ul. Kasprzaka 10/16, 01-211 Warsaw 22 860-4340/22 860-5900 www.bgz.pl

817.0 1,556.0 1,698.0 1,366.0

893.0 1,862.0 1,963.0 1,630.0

21.0 101.0 213.0 272.0

460.0 933.0 1,009.0 905.0

43.1 43.1

24,433.7 26,198.4

80.2% 77.0% 70.8% 70.9%

✓ ✓ ✓

✓ ✓ ✓

5,163 1975

Jacek Bartkiewicz

11

AIG Bank Polska SA ul. Strzegomska 42C, 53-611 Wroc∏aw 71 358-2222/71 358-2361 www.aigbank.pl

WND 1,520.0 1,534.0 1,073.0

WND 1,555.0 1,562.0 1,095.0

WND 30.0 230.0 247.0

WND 1019.0 948.0 706.0

111.9 WND

1,074.0 WND

WND 24.2% 35.4% 30.2%

✓ -

✓ -

2,665 1998

Ramon Billordo

Raiffeisen Bank Polska SA ul. Pi´kna 20, 00-549 Warsaw 12 22 585-2001/22 585-2585 moje.pytania@raiffeisen.pl; www.raiffeisen.pl

599.0 1,376.0 1,526.0 1,169.0

829.0 1,407.0 1,556.0 1,271.0

119.0 118.0 315.0 301.0

559.4 989.1 1137.0 1271.0

1,168.9 1,168.9

20,998.9 21,786.4

55.7% 57.4% 52.6% 56.1%

✓ ✓ ✓

✓ ✓ ✓

2,684 1991

Piotr Czarnecki

Fortis Bank Polska SA ul. Suwak 3, 02-676 Warsaw 13 22 566-9000/22 566-9010 info@bnpparibasfortis.pl www.bnpparibasfortis.pl

561.0 1,089.0 1,196.0 WND

429.0 570.0 532.0 WND

15.0 -430.0 78.0 WND

421.0 543.0 517.0 WND

1,060.3 1,205.9

20,435.0 21,443.4

-

✓ ✓ ✓

✓ ✓ ✓

2,854 1991

Frederic Amoudru

President

President

President

President

Piotr Sztrauch

Jeroen Nijsen

Ewa Lipiƒska

Piotr Konieczny

Jan Bujak

THE LIST

Rank

MARCH 28 – APRIL 3, 2011

Company name Address Tel./Fax E-mail Web page

Revenue from interest and fees (mln z∏)

Total revenue (mln z∏)

Net profit (mln z∏)

Gross profit on banking operations (mln z∏)

www.wbj.pl

Activities

Share capital (mln z∏): Dec. 31, 2009 / June 30, 2010

Net assets (mln z∏): Dec. 31, 2009 / June 30, 2010

C/I (Costs/Income) Ratio: 1st half of 2010 / 2009 / 2008 / 2007

Current accounts / Savings accounts / Hard currency accounts

Commercial loans / Retail loans / Mortgages

Total employees / Year founded

Top local executive / Title

CFO

W∏odzimierz Kiciƒski

Bohdan Tillack

1st half of 2010 / 2009 / 2008 / 2007

Nordea Bank Polska SA ul. Kielecka 2, 81-303 Gdynia 14 58 669-1000/58 669-1110 poczta@nordea.com www.nordea.pl

414.9 803.5 827.3 494.5

526.6 975.2 957.8 589.1

121.6 145.2 136.4 70.5

367.8 593.4 487.1 328.4

1.1 1.2

20.4 21.4

56.0% 65.0% 63.0% 71.0%

✓ ✓ ✓

✓ ✓ ✓

2,143 1992

Bank Ochrony Ârodowiska SA Al. Jana Paw∏a II 12, 00-950 Warsaw 15 22 850-8720/22 850-8891 bos@bosbank.pl www.bosbank.pl

380.0 720.0 710.0 578.0

387.0 734.0 770.0 649.0

36.5 26.9 0.3 46.5

224.0 400.0 367.0 351.0

447.0 543.0

920.0 1,051.0

73.7% 83.4% 80.4% 76.9%

✓ ✓ ✓

✓ ✓ ✓

1,748 1991

Santander Consumer Bank SA Pl. Grunwaldzki 23, 50-365 Wroc∏aw 16 71 323-6210/71 330-9910 biuro@santanderconsumer.pl www.santanderconsumer.pl

309.7 716.7 719.2 532.6

328.2 795.3 879.8 599.8

14.6 24.5 105.6 87.5

177.1 405.5 357.0 329.6

364.0 364.0

1,015.3 1,029.9

35.2% 36.4% 39.9% 41.8%

-

✓ ✓ -

689 1995

Piotr ˚abski

Bank Polskiej Spó∏dzielczoÊci SA ul. P∏ocka 9/11B, 01-231 Warsaw 17 22 539-5231/22 539-5233 pr@bankbps.pl www.bankbps.pl

349.0 661.0 725.0 493.0

411.0 742.0 768.0 524.0

37.0 57.0 54.0 44.0

135.0 251.0 223.0 194.0

133.3 133.3

12,473.5 13,884.8

0,71 0,71 0,71 0,73

✓ ✓ ✓

✓ ✓ ✓

1,269 2002

Miros∏aw Potulski

Bank DnB NORD Polska SA ul. Post´pu 15C, 02-676 Warsaw 022 524-1000/022 525-1001 www.dnbnord.pl

118.8 447.0 447.1 287.7

WND WND WND WND

35.1 79.8 10.6 4.3

153.2 246.8 238.1 158.8

625.2 625.2

7,752.0 8,715.2

62.2% 90.5% 92.8% 85.9%

✓ ✓ ✓

✓ ✓ ✓

1,100 2002

Bartosz Chyt∏a

Rabobank Polska SA Al. Jana Paw∏a II 27, 00-958 Warsaw 19 22 653-5000/22 653-5004 info-waw@rabobank.com www.rabobank.pl

108.0 366.0 437.0 300.0

110.0 372.0 445.0 300.0

18.0 16.0 26.0 10.0

40.0 90.0 59.0 38.0

211.0 228.0

5,472.0 6,919.0

43.0% 39.0% 57.0% WND

✓ ✓ ✓

✓ -

50 1993

Jerzy Jacek Szugajew

Bank Pocztowy SA ul. Jagielloƒska 17, 85-959 Bydgoszcz 20 52 349-9100/52 327-0407 informacja@pocztowy.pl www.pocztowy.pl

158.0 306.0 296.0 251.0

166.0 312.0 304.0 261.0

3.0 9.0 26.0 30.0

105.0 222.0 201.0 261.0

97.3 97.3

3,914.4 3,883.3

90.6% 80.5% 80.4% 79.6%

✓ ✓ WND

✓ ✓ ✓

1,476 1990

Tomasz Bogus

Alior Bank SA Al. Jerozolimskie 94, 00-807 Warsaw 21 22 555-2222/22 555-2323 kontakt@alior.pl www.aliorbank.pl

273.0 274.0 65.0 -

375.0 349.0 65.0 -

-82.0 -269.0 -134.0 -

195.0 143.0 61.0 -

500.0 500.0

1,104.0 1,020.7

78.0% 240.0% 292.0% -

✓ ✓ ✓

✓ ✓ ✓

3,300 2008

Wojciech Sobieraj

Invest-Bank SA ul. Ostrobramska 77, 04-175 Warsaw 22 514-5107/22 514-5106 www.investbank.pl

97.0 214.0 234.0 187.0

104.0 232.0 256.0 218.0

2.0 2.0 10.0 16.0

62.0 139.0 148.0 132.0

261.9 261.9

193.6 196.9

89.0% 88.0% 89.0% 91.0%

✓ ✓ ✓

✓ ✓ ✓

1,051 1991

Gra˝yna Niewolik

Volkswagen Bank Polska SA Rondo ONZ 1, 00-124 Warsaw 23 22 538-7000/22 538-7070 info@vwbank.pl www.vwbank.pl

94.0 203.0 212.0 162.0

117.0 236.0 241.0 188.0

31.0 17.0 37.0 29.0

65.0 112.0 109.0 107.0

54.4 54.4

216.6 229.9

53.0% 62.0% 62.0% 6.0%

✓ ✓ -

✓ ✓ -

313 1997

Jaros∏aw Konieczka

DZ BANK Polska SA Pl. Pi∏sudskiego 3, 00-078 Warsaw 24 22 505-7000/22 505-7442 info@dzbank.pl www.dzbank.pl

55.0 108.0 139.0 124.0

56.0 114.0 142.0 131.0

6.0 27.0 22.0 13.0

43.0 103.0 103.0 131.0

191.4 191.4

2.3 2.6

76.0% 63.0% 57.0% 66.8%

✓ ✓ ✓

✓ -

198 1990

HSBC Bank Polska SA ul. Marsza∏kowska 89, 00-693 Warsaw NR 22 354-0500/22 354-0501 infopolska@hsbc.com www.hsbc.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND

WND WND

WND WND WND WND

✓ ✓ ✓

✓ ✓ ✓

581 2004

Janusz Dedo

Lukas Bank SA Pl. Orlàt Lwowskich 1, 53-605 Wroc∏aw NR 801-331-111/71 355-3005 info@lukas.com www.lukas.com.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND

WND WND

WND WND WND WND

WND WND WND

WND WND WND

6,091 1991

Romuald Szeliga

Polbank EFG ul. Mokotowska 19, 00-560 Warsaw NR 22 347-7000/22 347-7001 kontakt@polbankefg.pl www.polbankefg.pl

WND WND WND WND

WND WND WND WND

-74.0 -170.0 47.0 -97.0

403.0 731.0 720.0 WND

WND WND

WND WND

WND WND WND WND

✓ ✓ ✓

✓ ✓ ✓

WND 2005

Société Générale SA Oddzia∏ w Polsce ul. Marsza∏kowska 111, 00-102 Warsaw NR 22 528-4000/22 528-4444 info.poland@sgcib.com www.sgcib.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND

WND WND

WND WND WND WND

✓ ✓ ✓

✓ -

200 1992

18

22

Notes: Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in April 2010. Number of employees and ownership structure are as of March 2010.

All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

21

President

Mariusz Klimczak Mariusz Klimczak President

President

President

President

President

President

President

President

President

Jose Luis Sanchez Diaz

WND

Krzysztof G´bal

Dorota Mliczewska

Micha∏ Sobiech

Niels Lundorff

Barbara Martynowicz

Jahannes Neumaier

Rainer Fuhrmann Marcin ˚ochowski President

President

Patrick Lefloch

President

Jean-Paul Piotrowski

Kazimierz Staƒczak

Micha∏ Jarecki

General Director

Tomasz Wirth General Director

Dominique Lhuillery

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

22

ARTS & CULTURE

www.wbj.pl

MARCH 28 – APRIL 3, 2011

An animated history Theater of the insane

Paris, Tokyo, Baltimore and Berlin.

Together Baraniecki and Butenko offer two solid reasons to visit the Eryk Lipiƒski Museum of Caricature, but how about a third? Or 18,000? That’s how many works the museum touts.

Established in 1971, originally as part of the Museum of Literature, it gained independence in 1983, when it moved to its current home on ul. Kozia. Set in a townhouse designed by architect J. Ch. Kamsetzera (also credited with Warsaw’s Royal Castle), the museum is named after its founder and first director,

Erik Lipiƒski (1908-1991). He began gathering materials for the museum some 20 years before its opening, personally raising funds with which to buy works.

Among their number are both Polish and international drawings and paintings, dating from the 1700s to the present. The collection has a strong Polish focus, with works of masters past and present, but foreign artists are also well represented.

Pioneering exhibitions have included “The Tastes and Smells of PRL” and “War and Peace. Polish caricature art from 1914-1939.” ●

Much ado about kung fu “Legends of Shaolin” Palace of Culture, Congress Hall, April 3, 5 pm

monks of the Shaolin monastery and the traditions and philosophies of Zen Buddhism.

Performing in traditional costumes and accompanied by period music, this is school-his-

A journey through space and time, this two-hour show takes us to 16th century China. Once there, we’re introduced to

tory-meets-Broadway. Performers aged seven to 75 take to the stage, engaging in everything from meditation to combat, bringing the ancient Orient to the modern-day Occident. ●

A stage adaptation of the well-known novel (and film) underpinned by the radical changes of 1960s America.

Set in an oppressive psychiatric ward, the plot sees petty criminal and outsider McMurphy meet his match in Nurse Ratched.

This is a joint production by the TNT Theatre and the ADGE Group, which endeavors to promote English-language performances to audiences in the Czech Republic, Slovakia and Poland. Actors hail from London, Paris and

COURTESY OF TNT THEATRE

Just in time for April Fool’s Day, a new exhibition examines the works of Polish caricaturist, animator, illustrator and satirist Karol Baraniecki.

Commemorating 100 years since his birth, the exhibition comprises drawings and sketches spanning the artist’s career.

These include early works, dating from 1928 (and his work for the Lwów-based magazine “The Puller”) to his own 1950s bi-weekly publication “Carousel.” Not forgotten is his best-known work, namely the 1960s/70s children’s animation “The Enchanted Pencil.” The exhibition runs until June.

Baraniecki’s work is in good company. A second exhibition, also launching in April, showcases the talents of Bohdan Butenko, an illustrator, writer and satirist from Bydgoszcz. Like his contemporary, he’s also credited with numerous films and animation, and his work has been showcased as far afield as

“One Flew Over the Cuckoo’s Nest” Studio Buffo April 11, 9:30 am & 12:30 pm

COURTESY OF THE MUSEUM OF CARICATURE

Various exhibitions The Eryk Lipiƒski Museum of Caricature

the US. The play makes use of physical theater and origi-

nal musical compositions.

Runs till April 18. ●

Testosterone all a-twitter St. Petersburg’s All-Male Ballet Company Palace of Culture, Congress Hall, April 9, 7 pm “Men in tights” is how this Russian ballet is being billed,

and, indeed they are: the performers take on both male and female roles from the canons of balletic dance history. The troupe has tiptoed its way around the world, per-

forming in cities such as Tokyo, Copenhagen, Helsinki, Jerusalem, Seoul, Johannesburg, Shanghai and Beijing. Classical ballet with a sense of humor. ●

Pluckin' good music “The Most Beautiful Harp Pieces” Concert Hall, The Fryderyk Chopin University of Music April 3, 5 pm The University’s students perform a harp-heavy program that includes works by H.

Renié, G. Fauré, M. Ravel, B.

Andrés, M. Grandjany. ●

Some content provided by the Warsaw Insider. For more information on culture and entertainment in Warsaw this month, pick up the March issue.

Museums, galleries and venues in Warsaw

A celebration of Liszt

Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl

Liszt – 200th Birthday Anniversary Concert Hall, The Fryderyk Chopin University of Music, April 4, 7 pm

Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl

The program includes “Sonata in B minor,” “Etudes d’exécution tran scen dante d’aprés Paganini” and “Aprés une lecture du

Dante: Fantasia quasi Sonata.” Performers include Anna Kubicz, Paulina Dru˝biƒska and Mateusz Czech. ●

Soul and rock'n'roll American Evening in Buffo Studio Buffo April 13, 7 pm

Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl

COURTESY OF STUDIO BUFFO

Part of Studio Buffo’s National Song and Culture Evenings cycle. The theater often showcases Russian, French and Italian musical styles (as well as cultural pieces ranging from Gypsy vocals to Jewish dance), and here it takes on America’s greatest hits. It’s a two-hour energy-fest, with an on-stage band taking you from Janis Joplin to James Brown to Elvis and beyond.

Choreography, needless to say, is inspired by American dance. ●

Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl

Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul.

Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl Le Guern Gallery ul. Widok 8, www.leguern.pl Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl Pracownia Galeria ul. Emilii Plater 14 www.pracowniagaleria.pl

State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.website.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl

Rempex Art and Auction House ul. Karowa 31 www.rempex.com.pl

Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 www.milanow-palac.pl www.postermuseum.pl

Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl

Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl

Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

LAST WORD

MARCH 28 – APRIL 3, 2011

www.wbj.pl

23

Tech Eye

The sound of lamentation and despair

Toys galore

COURTESY OF ONSTAR

Long story short, we didn’t find anything to help with our hole problem, but we did come across some cool toys.

Take OnStar’s new FMV mirror, for example. If you’re not familiar with OnStar, it’s a provider of subscriptions-based, in-car services, such as hands-free calling, in-vehicle security and turn-by-turn navigation,

cause an interior decorator to despair.

Our pleas fell on deaf ears. Begging didn’t help, nor did weeping until magnificent snot bubbles began to swell and burst wetly in the air beneath our red, swollen nose. These men had come to make holes, and

among other things. It’s not yet available in Europe, but OnStar (a subsidiary of General Motors) is looking to expand across the pond in the near future.

So why is the FMV mirror exciting? Well...uh...it’s got buttons. Soft, candy-like buttons which give you

access to OnStar’s services. And there’s a microphone, which probably facilitates handsfree calling. Or lets the government/evil machines/aliens track your every breath and sneeze. One or the other.

As we said, you can’t get this thing in Europe yet. But when it finally appears, expect to drop a couple hundred of your preferred currency on it.

Then there’s something a bit more relevant to those of us who don’t own cars in America – Sony Ericsson’s new Xperia Play. Marketed as the “world’s first PlayStation-certified smartphone,” it’s got the standard amenities (like a five-megapixel camera, a four-inch multitouch screen and social networking integration), but it’s also got a 1Ghz Snapdragon processor with an imbedded Adreno GPU. Snapdragon? Adreno? What’s that? All you really need to know is that they facilitate on-the-go-entertainment, and the line-up of games will soon include The Sims 3, FIFA 10, Assassin’s Creed and Splinter

Cell, all triple-A titles (albeit unproven on a mobile platform).

The Xperia Play runs an Android OS and you should expect to pay around €649 (z∏.2,614) off-contract. Available from April 1.

Finally, something a little different – Sonitus Medical’s SoundBite.

This hearing aid is “the world’s first non-surgical, removable hearing and communication solution that is designed to imperceptibly transmit sound via the teeth.”

That’s an impressively specific “world’s first,” but not quite as cool as “world’s first waffle-baking, conventCOURTESY OF SONY ERICSSON building robot donkey-launcher.” Now that would be impressive.

Aside from the fact that it relies X

holes they were going to make. So in the end we retreated to the one quiet place in the apartment – the balcony – to trawl the internet for fancy technology to fix our walls.

AL DIC ME US NIT SO OF SY TE UR CO

Techeye always knew that men in white coats would show up at our door some day. As it turns out, that day was last Thursday.

Contrary to our expectations, however, these men had no intention of taking us to a very special place with soft walls where the heavily medicated residents spend hours drawing butterflies and unicorns. It was much worse, actually – they’d come to make giant holes in the walls of Techeye’s apartment, ostensibly to replace water pipes. In fact, they were sadists bent on destroying just enough of our years-old, impossible-to-find-nowadays bathroom and kitchen tiles to

on your bones to conduct the sound waves, the SoundBite remains something of a mystery to Techeye. Can you tune it into a local radio station?

Can you hook it up to OnStar to facilitate turn-by-turn navigation?

So far Sonitus isn’t saying.

A couple of things are clear, though – Sonitus got approval for a European roll-out in mid-March, so you can expect it to appear on the market in the nearish future at a price of several thousand <insert currency here>. Also, the SoundBite only works for people suffering from single-sided deafness, so don’t bother if you’re of the doubledeaf variety.

Unfortunately that rules out the workmen who showed up at our doorstep last week, and, after all the ruckus they created, possibly Techeye as well. ●

Ever blown snot bubbles at a stone-faced man carrying a sledgehammer? Let us know: techeye@wbj.pl

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