KYIV, Aug. 9 – The head of the state-owned railway company UkrZaliznytsia and perhaps the last remaining reformer in the state-controlled sector resigned on Wednesday, following 10 months of pressure from senior government officials.
Wojciech Balczun, a Polish national who turned the loss-making and corruption-prone railway company into a profitable and well-managed business, stepped down after a clash with Transportation and Infrastructure Minister Volodymyr Omelyan.
The resignation casts shadow on whether the government of President Petro Poroshenko is truly committed to reforming massive state sectors, such as railway transportation.
The resignation of Balczun opens door for senior officials to re-establish control over UkrZaliznytsia, a state company that generates massive cash flow, ahead of next presidential and parliamentary elections due in 2019.
UkrZaliznytsia reported UAH 122.5 million in profits in January through June, reversing more than UAH 3.7 billion in losses in the same period of 2016. The company paid off UAH 8.7 billion in debts in 12 months to June, also reducing the overall debt by 15% to UAH 37.3 billion as of August 1.
“We have stabilized the company, improved all economic indicators, prepared a five-year strategy, restored the reputation of the company in the international arena, returned to the investment path, launched new passenger connections,” Balczun said in a post on Facebook announcing his resignation. “It was the most difficult and most important mission in my business life.”
Balczun, who started massive reforms at UkrZaliznytsia in April 2016, had faced heavy criticism from the start, mostly from Omelyan, who complained over losing control over the state company. Omelyan claimed the company is being ‘insufficiently reformed.’
Balczun previously successfully led PKP Cargo, a Polish cargo railway company.
Prime Minister Volodymyr Groysman originally backed Balczun, but the pressure has escalated over the past several months, culminating with the resignation.
“Whoever says anything, many changes at Ukrzaliznytsia have taken place over the past year, including positive changes,” Groysman said at a government meeting accepting the resignation of Balczun. “I want to thank him for his work. I understand that he worked in rather difficult conditions, this is an extremely complex enterprise.”
Poroshenko has been increasingly reasserting control over the key sectors of the country’s economy and politics ahead of the elections. He recently stripped a pro-Western reformer and opposition leader Mikheil Saakashvili of Ukrainian citizenship. The move, which was criticized by European leaders, effectively eliminated Poroshenko’s political rival two years before the election.
Yevhen Kravtsov, the first deputy transportation and infrastructure minister and an ally of Omelyan, was Wednesday appointed by the government as acting manager of UkrZaliznytsia.
“This is not a new task for me, I was acting manager of UkrZaliznytsia before Balczun’s appointment,” Kravtsov said after the meeting. “I fully understand what this responsibility is and how difficult it is.” (nr/ez)