Balczun leaves Ukrainian Railways

Piotr Andrusieczko

Wojciech Balczun is no longer the chairman of Ukrzaliznycia – Ukrainian Railways, the third biggest railway company in terms of rail freight in Eurasia. He had rendered his resignation on 9 August. It was accepted two days later and confirmed by Ukraine’s governmental portal. Polish manager, who proved himself capable of restructuring PKP Cargo in Poland, folded in Ukraine.

Officially Balczun resigned due to ‘personal circumstances’. Volodimir Groysman, current Prime Minister of Ukraine government, assured that the decision made by Polish manager was ‘totally nondependent’. However Balczun has been engaged into political rivalry of different forces over Ukrainian Railways since the very start of his mission.

Railway War.

When Balczun became the chairman of Ukrzaliznyci on 12 April 2016 the expectations were highly positive. Foreign manager and rock musician attracted common interest. It was a total breakthrough in terms of thinking about the most important positions in Ukraine.

Ukrainian band ‘Brooklyn Plush’ along with a well-known singer Pavlo Zibrov recorded a song ‘Polish railway. Lowa – Lowa’. They sung about Balczun and proposed a kind of international exchange: Zibrov might have become a chairman of PKP – Polish Railways.

On 6 June 2016 Balczun officially became the chairman of Ukrzaliznyci. His main tasks were: fight against corruption, redevelopment of the rolling stock, better customer service and last but not least, better economical results.

His salary was considered to be pretty controversial straight from the start of his duty and it was estimated between 800.000 to 1.000000 million hryvnias per year. The lowest salary in Ukrzaliznyci is about 100 dollars per month.

On 5 July 2016 a new, fast railway connection was presented. It connected Kiev and Kherson in Ukraine. It was the first train from the new Ukrzaliznyci chairman, who visited the railway station accompanied by Volodimir Omelian, the minister of infrastructure. Then, there were no signs of future conflict between Balczun and Omelian. However, neither the minister nor the passengers were especially glad about the carriages in the new type of train.

Later Omelian started to claim that Balczun was not his favorite candidate to run Ukrzaliznyci. But the real war between them broke out at the end of 2016. Balczun realized he had the support of the Prime Minister Groysman. On the other hand Omelian was designated by Ukrainian People’s Front which was a vital part of government coalition in Ukrainian Parliament.

Minister of Infrastructure considered Balczun a ‘damaging showman’ and criticized him for leaving his duties and taking part in music concerts. Polish manager hit back fiercely.

Prime Minister engaged himself in this conflict at the end of January 2017. He took Balczun side during government session, when the chief of Ukrzaliznyci was showing his annual report and Omelian started to attack him again. Groysman pointed out, that Omelian did not have a five years’ experience of working for Polish Railways and should better take care of railway stations.

It seemed like Balczun was gaining advantage in this conflict as Ukrainian Railways were no longer under the direct management Ministry of Infrastructure.

But that did not stop Omelian who kept on criticizing polish manager and stated that Balczun should have been fired in his second month of working in Ukraine.

Minister’s deposition was then foreseen by many. Somehow everything has changed: Omelian was probably backed by his political pivot men, who also turned Prime Minister Groysman against Balczun. Balczun stood alone and finally gave up.

Any manager success?

One year of Balczun’s work for Ukrzaliznyci succeeded in new railway connections. Trends before Balczun were rather opposite. Now 650.000 residents from Izmail – the furthest south city in Odessa district – or 600.000 from Solotvyno in East Transcarpathia, can travel to the capital of Ukraine and back to their homes.

The number of railway connections also increased thanks for new Intercity trains, for example between Kiev and Przemysl or Kovel and Chelm. It was a pretty important event both for Ukrainian and Polish passengers and tourists.

Under Balczun’s reign Ukrainian Railways bought modern carriages for the first time in ages. A new, simple and really well working mobile app railway ticket booking was introduced. Although Ukrainian media does not value that project much, Polish passengers would definitely appreciate it.

Media claim that Balczun did not really handle the subject of corruption in Ukrzaliznyci. Accusations mainly concern tenders for the supply of fuel and replacement parts. The question is, was it possible to eliminate long last corruption system without proper support and during so short period of time?

There is a discrepancy in terms of financial results as well . Balczun boasted about 303 millions of hryvnias of clear profit in 2016. In comparison, in 2015 Ukrzaliznyci loss was about 16 billions hryvnias. Although according to Minister Omelian there was no profit in 2016 and the supposed gain might have been ‘achieved’ because Ukrainian Railways did not execute the plan of redevelopment of the railway rolling stock.

Balczun did not show a report on all the tasks fulfilled by Ukrzaliznyci since he started to manage the company. That is why the matter of potential profit or loss remains unclear.

Last May Balczun presented the Ukrainian Railways development strategy for years 2017-2021. He described that strategy as groundbreaking . Business model was to be based on five elements: freight transit, passengers transit, infrastructure, handling of carriages and freighters, production and service.

According to experts his strategy looked more like a simple presentation, and the strategy itself was not accepted. Experts claimed Balczun did not take under consideration a huge loss of railway infrastructure and repair and production plants in the east of Ukraine.

What is more, Balczun was criticized because of too low freight transit prices and not proper division of passengers carriages.

Actually, it is rather difficult to evaluate the activity of Wojciech Balczun as the chairman of Ukrzaliznycia. More than a year is not long enough to make a significant change in such an enormous company. Moreover, political fights in order to control this economical giant do not allow to conduct vague changes.

Aforementioned singer Pavlo Zibrov, while commenting on Balczun’s withdrawal, had warm words on him and noticed that Ukrainian system proved to be too strong for the Pole. Zibrov suggested Balczun should spend time on music rather than railway.

Minister Volodimir Omelian triumphs and promises the end of corruption and serious reforms of Ukrainian Railways. Only time will tell.

People come and go.

Meanwhile Ukrtransgaz has got a new chairman. Another Polish manager, Pavel Stanczak, formerly associated with Polish Company Treasury PGNiG.

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